SoundExchange is a nonprofit organization that was established directly by the Copyright Royalty Board.
Its function is to collect and distribute royalties for recording artists, independent artists owning their material, and for masters rights owners such as record labels.
The organization has collected and distributed over $9 billion worth of royalties, to more than 570,000 different recording artists.
In addition, the organization has more than 50 global partners that also help with the collection and distribution of royalties, when artists’ music is played overseas.
Michael Huppe is the current President and CEO, and Anjula Singh serves as COO and CFO.
What niche does SoundExchange fill?
SoundExchange collects royalties that are due to artists from three primary sources, and artists who wish to collect any royalties due to them must register with the organization.
Whenever the music of a particular artist is streamed on a service like Spotify, that provider will report it to SoundExchange, so the proper royalties can be distributed to the artist.
Here are the three major sources that provide play time and royalty information to SoundExchange:
- Satellite radio services – usually only the songwriter and the publisher are entitled to performance royalties, with the performance artist being left out. On satellite radio, the songs played are monitored by SoundExchange, so that money can be directed to the actual recording artist.
- Cable and satellite television – whenever a song is played on cable or satellite television, for instance through Muzak or Music Choice, the royalties will be collected and distributed by SoundExchange.
- Non-interactive webcasters – these kinds of service providers are not on-demand services; on the contrary, they don’t allow users to select the specific type of music they want to hear. Pandora is one example of this kind of provider, whereas YouTube is an interactive webcaster that allows users to select exactly what they want to hear.
Details about SoundExchange
OK, so you’ve never heard of SoundExchange – can they really be that important?
The company was launched in 2003, for the express purpose of making the music industry simpler and fairer for all.
To do this, it would make best use of modern technology, available data, and advocacy for those who need it.
It is the lone organization which the U.S. government has designated for administering the Section 114 sound recording license, which governs Internet play of music.
With the advent of streaming services, recording artists were losing out in a major way when their music was being played, because there was no obligation for listeners to purchase the music.
SoundExchange stepped into the fray to balance out the system, and advocate for artists who would otherwise have been shortchanged.
What’s special about SoundExchange?
For one thing, SoundExchange is the only organization authorized to collect and distribute royalties to artists under Section 114 of the recording artists regulations.
They are also the only organization that directly advocates for recording artists, since other agencies represent the composers, songwriters, and publishers.
The organization is committed to ensuring that recording artists receive their due entitlements, even if their music is played on traditional radio broadcasts.
That particular achievement has not yet been realized, but the continued efforts on the part of SoundExchange make it possible that it will someday become a reality.
Where SoundExchange fits in
Ever since streaming became more popular than music downloads, royalties have increased for performers.
In the year 2015, SoundExchange had paid out more than $800 million in royalties to performers, and this represented a whopping 16% of the entire music industry’s revenue.
This is the revenue allocated to record labels and artists, and in 2021 that total soared to $4.95 billion.
These statistics alone should tell you the kind of influence carried by the organization, as well as the level of their success in collecting and distributing royalties due to performers.
Do you need SoundExchange?
If you’re a recording artist, having the SoundExchange app can make your life much simpler, and probably much more lucrative.
Using the app, you can manage your music recording business wherever you may be at the moment. You’ll be able to search for your music, claim it, track all songs in your total catalog, and monitor any royalty payments that are due you.
Assuming you have pre-registered with SoundExchange, all this information will be available to you via the app, and registration won’t cost you a dime.
The future of SoundExchange
Already credited with protecting the rights of recording artists in this country, it might seem like SoundExchange has already peaked in fulfilling its purpose.
It’s the only recording artists’ CMO that pays out royalties monthly, and more than 90% of all collected royalties are paid out within 45 days of collection.
It has become a standard for efficiency and transparency in the music industry, and much of the music industry looks to SoundExchange as a model for how the industry should operate.
The company has a newly designed state-of-the-art system that will make it even more efficient and productive.
One pet project in particular that the organization is pushing hard for is to get recording artists paid when their music is played on terrestrial radio broadcasts.
The company is determined to make this right, because it has never been fair to the artists, and they have never been properly compensated for their music.
SoundExchange is actively campaigning to raise public awareness of the issue, and it has invested strongly in Capitol Hill lobbyists who are fighting to get a fair deal for recording artists.
Frequently asked questions
A number of questions are commonly asked about SoundExchange, and some of the most popular are listed below.
Q: Does SoundExchange distribute royalties for traditional radio broadcasts?
A: Traditional radio broadcasts are not currently covered by the organization, although it has been lobbying for years to achieve this.
SoundExchange is a powerful advocate for the American Music Fairness Act and has been trying to get traditional radio broadcasts covered in that act.
Q: Do unclaimed royalties have an expiration date?
A: Yes, they do. SoundExchange is authorized to release royalties that remain unclaimed for 3 consecutive years.
Q: What is the registration process for SoundExchange?
A: All you have to do is visit this website: https://register.soundexchange.com/welcome.
Q: I’m already a member of ASCAP – do I need to register with SoundExchange also?
A: ASCAP collects royalties for the songwriter, composer, and publisher. SoundExchange collects royalties on behalf of the recording artist and copyright owner.
If you are the recording artist, you’d need to register with SoundExchange to claim your royalties.
Q: Why should I register with SoundExchange?
A: The main reason you should register with SoundExchange is that it will allow you to collect all royalties which you’re entitled to.
Since SoundExchange is the only organization authorized to collect royalties for U.S. sound recordings for the artists, that’s the only way you could collect.