The following guest post comes from Ben Stauffer, Finance Director of Centricity Music in Franklin, TN.
After becoming the first Finance Director at Centricity Music last December, I took a look at our 4th Quarter 2012 SoundExchange statement and noticed one glaring omission: we weren’t being paid for our biggest radio hit of the past year! I did some digging, and what I learned quickly is that both Record Labels AND Artists need to pay attention to how their master recordings are cataloged in the SoundExchange system.
As a result of fixing data errors, we collected prior period royalties equal to three months’ worth of our usual payments. I want to help you to do the same.
In this post, I’m going to discuss three things that every Label and Artist should do to make sure that they are paid the royalties which SoundExchange collects on their behalf. But first, I want to discuss what SoundExchange is and what royalties it collects for payment to rights holders.
SoundExchange: What It Is, What It Does
SoundExchange is a non-profit organization that collects royalties from the performance of sound recordings on satellite radio (Sirius XM), internet radio stations (think Pandora but also many smaller webcasters and websites playing music), and similar streaming services in the US. SoundExchange does NOT collect for recordings played on Rdio, Spotify, and similar “on-demand” streaming services. Who does and does not pay SoundExchange is beyond the scope of this post, but you can find the most current list of entities paying SoundExchange here.
Note that these payments are for rights in sound recordings only, as other organizations like performing rights associations (ASCAP, BMI, and SESAC in the US) and the Harry Fox Agency pay songwriters and publishers for rights in compositions.
SoundExchange pays out royalties collected as follows:
5http://dmnrocks.wpengine.com/wp-admin/plugins.php0% directly to the Sound Recording Copyright Owner (usually Label, or Artist if he/she retained master rights);
45% directly to the Featured Artist;
This means that BOTH Labels AND Artists must be registered with SoundExchange to get paid. Labels are not responsible for paying SoundExchange royalties to their Artists. I encourage you to checkout SoundExchange’s FAQs for more information about the company.
If you are a master rights owner or an artist and your recording is played by any of the applicable providers, you should do 3 things to make sure that SoundExchange pays you correctly:
STEP 1: Register with SoundExchange.
Until you are properly registered, SoundExchange will continue to collect royalties due to you, but it will hold them because it doesn’t know how to pay you. Registration is an easy process — I recently registered one of our label imprints in 10-15 minutes. If you have a business manager or someone you trust with your financial information, you can always have them set it up for you.
- Whether you are an Artist or a Label, go to the Online Registration Page.
- Read the “Before You Get Started” information and have ready (if applicable) a copy of the Artist’s Photo ID, a Voided Check for the bank account being used to receive payment (SoundExchange uses direct deposit free of charge), and the Social Security Number/Federal Tax ID number of the person/company being registered.
- Complete the registration on the subsequent webpages, providing information about who/what you are registering and the pertinent contact information. Be sure to check your spelling!
STEP 2: Submit Your Song Data via a “Repertoire Form.”
SoundExchange collects the “metadata” from the service provider who plays the song, meaning that rights holders should not need to submit their repertoire to get paid (but you still have to register as noted in STEP 1). However, despite SoundExchange’s best efforts, a vast amount of the data being used to match songs to rights holders is incorrect.
- As noted on Page 1 of the Online Registration, you should submit data for your songs via the Excel “Repertoire Form.“
- On this form, both Artists and Labels list the Artist Name, Track Title, Album Title, ISRC & UPC codes (the Label knows what these are), and other important metadata for each song for which they hold a performance right.
- Artists AND Labels should separately submit repertoire forms for their specific master recordings (I confirmed this directly with SoundExchange). This is because the Repertoire Form has a section for each of the 2 main Right Claims–Artist and Master Owner. Artists should fill out the “Featured Performer Claim” section with the percentage of the performance they own (100% in most cases), and the Sound Recording Copyright Owner (Labels or Artists who retain their own Master Rights) should complete the “Master Recording Claim” section. Any section that is not applicable to you should be marked “N/A.” Consult your lawyer or manager if you have questions about these particulars.
Not only should you submit this information when you initially register, but you should also send SoundExchange an additional Repertoire Form every time you release a master recording that may be performed publicly. Submitting your own list of songs to SoundExchange’s Data Management team is the best way to ensure that your songs are properly identified from the beginning.
To submit your Repertoire Form, complete the Excel template and email it to email@example.com. My company has made this part of its process for release of every new master.
Once you have submitted your repertoire, you should check to make sure that the data in SoundExchange’s database is correct. This brings us to:
STEP 3: Research your masters in the SoundExchange “PLAYS” database and submit corrections for any errors you find.
Ok, here’s where it gets dirty. Unfortunately, the Repertoire Form that you submitted in Step 2 isn’t what SoundExchange primarily uses to match song plays to the appropriate rights holders. It really only helps the data folks to resolve discrepancies. As I mentioned, the services that pay SoundExchange submit metadata for every song that they play. SoundExchange is relying on the folks at these companies to provide the proper data, and I can tell you from personal experience, it is often submitted improperly.
For example, the big song of ours that I mentioned at the top of the post was recorded by an artist who recently came to our label, and SoundExchange had the recording listed as owned by his former label. As a result, we weren’t getting paid for this song’s performances on Pandora and other services (I haven’t confirmed if the old label WAS getting paid our money, but my guess is that they were). I found this “incorrect label” designation on a lot of our songs, while many songs had no label listed at all.
To search the SoundExchange database, you simply register as a user of PLAYS with just an email address and other basic information. Note that anyone, not just rights holders, can use this database, so if your manager or another member of your team wants to handle this task, have them register.
While the search function can be buggy (if you get kicked back out to the front page, just log in again), you can search by Artist, Song Title, Album, or Label. However, you may need to do multiple searches for the same song or artist.
In the example below, I searched for the White Stripes’s “The Denial Twist” by searching only the exact title. I got different results when searching without the “The” in the title, and another set of results if I included the artist name in the search (ugh). I’d like to see SoundExchange fix the search logic, but for now, it’s the only available tool.
SoundExchange’s PLAYS Database Search Page
Here are the results of the above search (as of 7/21/13):
The results show that this one master has multiple listings with different Artist names (w/ or w/o “The”) and 3 different labels, as well as different variations on those label names and even one without a label listing at all. You can see how a rights owner (Jack White’s Third Man Records in this case) may be shorted payments due to it.
To submit corrections via the PLAYS database:
- Check the “Sel” box next to the line item you want to correct, select “Artist,” “Label,” or “Other” from the “Item” drop-down box, and type in the corrected information in the “Correct” box on that same line.
I suggest that you add a sentence or two in the “What You Would Like Us To Correct…” box at the top of the page, especially if you need to fix multiple items. For example, for some corrections I wrote, “The correct Label for this Title is Centricity Music. The correct Album for this Title is “[Album Name.]” Then, click “Proceed” to submit the request and you will immediately receive an email from the PLAYS administrator detailing the change you have requested.
The bad news: SoundExchange won’t reply to let you know what, if any, changes it makes, so you have to go back and try the search again to see if your data has been fixed. Also, PLAYS is only updated on a quarterly basis, so you may not see new songs listed or changes made for a couple of months.
Our results: Through submission of corrections to PLAYS and updates of our Master list using the Repertoire Form in April 2013, my company was able to get payment for prior period royalties (as far back as Fall of 2011) that were as much as what we received in payments for all songs played in the current quarter.
In addition, we will be paid going forward on performances ofthose songs as well. We still have a lot of songs with bad data that need to be fixed, but I’m glad that we took these first steps to ensuring that we receive the SoundExchange royalties due to us as a rights holder.
You will be, too.