3 posts tagged “music industry”

Earlier today I bought into some posts I was reading on how SoundExchange collects money on behalf of artists without their consent. Well, this is kind of true, but not in an extortionist kind of way. Since my post earlier, I have emailed back and forth with John Simson, the Executive Director of SoundExchange. He explained how SoundExchange works to me. for the sake of completeness (and perhaps a little laziness) I will simply include the email exchange below (with John’s kind permission).

In response to my original email, John replied:

Please give me a call so I can explain to you how this works. You don’t need to “opt out” of SoundExchange – but you are free to direct license any service you want at whatever price you want. That is and has always been your right. What you will find is that most webcasters want to make one single payment for everything they play – and we facilitate that. As the webcasters wanted to make one payment and provide data about what they were playing to one entity, we were designated by the Copyright Office to be that entity.

I responded with:

Thanks for getting back to me so quickly. I would love to speak with you about this as it’s clear there is a lot of potentially inaccurate info in the web/media on this topic. I am simply reacting to what I have read.

So, is it correct that a “flat fee” is collected from the webcaster and each artist played is entitled to a portion of that whole? If so, what happens to the portion that goes unclaimed? Is it the webcaster that would need to opt-out of the system, and play only freely available music? I’m trying to get a handle on what I can tell webcasters who come to me. I guess in order to avoid paying anything on music of ours that has been played, they would just not report airplay of our music. They would still pay the same fees, but no portion of that would come to us, via Sound Exchange. Is that accurate?

John replied:

It depends upon the service. The 40 or so blue screen channels that play music over your cable tv or directv or dishnet pay us 7.25% of the revenue they collect and provide us with complete census data on every channel. We match the money to the performances and distribute. Satellite radio (XM and Sirius) also give us census data for all performances and we match their payments to performances and pay out accordingly. Webcasters, if they are non-comms (college, religious, community) for the most part pay a $500 annual fee. They do not provide data – so there is no data to match against their payments. We have tried to work with them to create a technology solution since getting data from them is important to me – so we can pay the right artists and labels.

Large commercial webcasters (who pay in 95% of webcasting royalties) are now required to report 2 weeks per quarter. If you show up in that survey, you get paid. Those payments would be made on the basis of audience size. In 2005 the rates for large commercial webcasters was .0762 cents per stream. So, if 100 people were listening to a song, the label and artist would receive approximately 7.6 cents for that performance. If 10,000 people were listening it would be $7.60.

What happens to unclaimed money, as in every performing rights organization is that we hold it for a minimum of 3 years (Copyright Office regulations) and if we can’t locate the person and they haven’t come forward to claim, the money is redistributed to all other SoundExchange royalty recipients.

Let me know if you have any other questions.

This is all good info. John is very open to conversation on this stuff, so I encourage anyone concerned (particularly webcasters) to contact him directly with questions. You can find his contact info on the SoundExchange contact page.

The more I read about Sound Exchange (and the fact that they collect performance royalties for artists who have never asked them to) the more upset I become. It is yet another example of a totally fucked up music industry dragging down both its customers and the other people that allow it to exist (artists and broadcasters). Hungry Lucy is currently a "member" of Sound Exchange. We receive a (very) small check every quarter for money they have collected from broadcasters that play our music. With the recent performance royalty increases (links to PDF), many of the broadcasters who have helped Hungry Lucy gain exposure are faced with ridiculous costs that threaten to put them out of business. THIS CANNOT HAPPEN.

With this in mind I just sent the following email to the Executive Director, Chief Operating Officer and Licensing & Enforcement Specialist at Sound Exchange. I hope it results in us getting one more foot out of a corrupt system. Excuse my language (above) ... I'm angry! If any other artists are upset about this (and I hope you are), please let Sound Exchange know.

------------------------------

Hello,

My name is War-N Harrison. I am one half (and business manager) for the band Hungry Lucy (www.hungrylucy.com).

We currently receive statements/royalties from Sound Exchange. I joined up/registered with Sound Exchange a few years back after I received an email that Sound Exchange had collected money on our behalf for airplay of our music. So, I signed up and collected that money along with a few royalty distributions since. Since that time we have seen a significant benefit of increased exposure from podcasts and internet radio play. We see this exposure as a far greater benefit than the royalties Sound Exchange has collected on our behalf.

So, with this in mind, I would like to know how we can go about opting out of Sound Exchange, such that you no longer collect performance royalties on our behalf. We can then go to the podcasters and internet broadcasters that have helped us by assuring them they can play our music with no cost to them.

I also have a question. How is it that Sound Exchange is able to collect royalties on behalf of artists prior to the artist authorizing this?

Thanks for your help. I look forward to your response.

Regards,

War-N Harrison
---------------
Hungry Lucy / Hungry Media
www.hungrylucy.com
www.hungry-media.com

My wife (and musical partner) and I just saw a screening of the film "Before the Music Dies" last night (Mar. 30) in Covington, KY. As both music creators and music fans, we were both so moved and inspired by the film. The film explores the changing music industry and includes great interviews with Dave Matthews, Erykah Badu, and many others as well as some very moving live performances, I love the fact that performances from many genres were presented. Some of the short, solo performances (by people of whom I'd never heard before last night) were some of the most powerful I've ever experienced.

From the B4MD website:

BEFORE THE MUSIC DIES tells the story of American music at this precarious moment. Filmmakers Andrew Shapter and Joel Rasmussen traveled the country, hoping to understand why mainstream music seems so packaged and repetitive, and whether corporations really had the power to silence musical innovation. The answers they found on this journey–ultimately, the promise that the future holds–are what makes BEFORE THE MUSIC DIES both riveting and exhilarating.

The music industry is rapidly changing and B4MD does a great job of showing that this change is ultimately good for both creators and listeners. For major labels/radio ... perhaps not so much, but they've had the advantage for quite long enough!

My message to artists that are scared by the way the industry is changing ... EMBRACE IT! Give away some music, allow people to enjoy what you do, and your audience will find you. The direct connection that we (as artists) can now have with our audience is worth so much more that any advertising budget!

Thank you to Andrew and Joel (and everyone involved) for this very inspiring film!