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SoundExchange Is Screwing Me Out Of Money And There’s Nothing I Can Do About It

 

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When I started my research on SoundExchange I had a very favorable view of the non-profit company – even though they could not get my repertoire catalog straight. But, I had just heard from a reader (who I encouraged to sign up for SoundExchange) that his first check was for $10,000! So there was hope.

SoundExchange is a non-profit organization setup by the government in 2000 (officially launched in 2003) to collect and distribute royalties in America earned from the sound recordings on digital (non-interactive) platforms like Pandora, Sirius/XM and any radio station that streams online.

I signed up to SoundExchange back in May of 2011. I did everything they asked me to do and was very thorough with my application. Their online registration was not fully developed and, if I remember correctly, I was only able to signup as a Featured Artist. But I do have the email confirmations to prove my application was successful.

Nowhere on the application, however, did it mention that as an independent artist (who owns 100% of the sound recording) had to ALSO sign up as a Rights Owner. I learned about that only a few months ago and signed up as a rights owner as well. I have the email confirmations for all of this to prove it.

Every song holds two copyrights:

One for the composition (the song – controlled by the songwriter or publisher) and one for the sound recording (the actual master recording, controlled by the record label or the artist). SoundExchange collects and pays out royalties ONLY for the sound recording. Performing Rights Organizations (ASCAP, BMI, SESAC) collect and pay out royalties for the composition.

For these sound recording royalties, SoundExchange pays out 45% to Featured Artists, 50% to Rights Owners and 5% to background artists.

So, if you are an independent musician who owns 100% of your sound recording, you must sign up as a Featured Artist AND as a Rights Owner. The only way to obtain the background artists’ royalties is to register with the American Federation of Musicians (AFM).

In the PLAYS database where an artist can search for songs reported to SoundExchange to submit corrections, I discovered (over a year ago) that only 8 of my songs (NOT the most popular ones) were listed. 4 of them had incorrect information listed. Some distribution company I had never heard of was listed as the Rights Owner (and theoretically getting paid by SoundExchange royalties they had no right to collect). There was a simple way to submit changes. I submitted the changes.

Over a year later those songs still have incorrect information.

In addition, SoundExchange has only been paying me for 8 songs (when I have over 70 released). Fans have taken screen shots of their Pandora when my songs come up and tweet and Facebook me the images. 9 times out of 10 the song they show me is NOT one that shows up on my royalty statement from SoundExchange. This doesn’t add up.

SoundExchange is only paying me for 8 of my 77 released songs.

When I registered as a Rights Owner back in February of this year I submitted a FULL repertoire excel document (as required). It included my entire catalog.

I got an email from the repertoire department explaining they received my catalog, but I was not signed up as a Rights Owner. I responded explaining that I did sign up as a Rights Owner (and spoke with 2 reps on the phone to confirm I did it correctly). I even attached my “Success” email.

I followed up to repertoire@soundexchange.com multiple times for confirmation. Nothing.

Well, I got one response: “customer services. 202-640-5858″

That was literally the entire message.

Fast forward to last week. I attended the SoundExchange information session lead by Marketing Manager, Lauren Danzy, at the ASCAP Expo at the Loews Hollywood Hotel. It was a very short, 30 minute information session where she took questions intermittently throughout her presentation from very confused musicians. No one seemed to have a strong handle on what SoundExchange is or how to properly register for it.

Time ran out. I grabbed her business card and left.

I emailed her and asked to setup a meeting with someone at SoundExchange to write a full report to EDUCATE musicians and rights holders on how to properly signup for SoundExchange and make sure all the money that is owed to them is claimed (and hopefully get my situation worked out).

She responded saying the VP of Communications, Marie Knowles, would like to meet with me in person the following week as she was going to be in town for the Music Biz Conference.

Knowles made it incredibly difficult for us to find a time to meet. She requested a time and then canceled. Twice. She asked me to drive to her even though she requested the in-person meeting. And then she only afforded us a short 30 minutes.

Strike 1.

I fit in as many questions as I could and explained the headache I had been dealing with concerning the SoundExchange repertoire department. Knowles seemed completely unaware of the Plays database so couldn’t address those questions and was taken aback that someone was having issues with their system.

Strike 2.

I was very confused as to why she requested to meet with me and then gave me the runaround and such a short window of time. Knowles was apologetic and offered to meet the following day for a full session where I could get every question I needed answered.

Well, that was today. An hour before our meeting I received an email from Knowles stating she couldn’t make our meeting because she woke up sick.

Strike 3.

It’s very unfortunate that there is no alternative to SoundExchange. We have government regulated PROs in this country (ASCAP and BMI). If one of them was this disorganized and incompetent, then a member could just switch organizations. Not so with SoundExchange.

There is no alternative.

Well, the alternative is to go directly to each company and negotiate licenses on a case by case basis which is virtually impossible unless you are a powerful label with a large catalog.

I, along with thousands of other artists, are owed lots of money from SoundExchange, but SoundExchange seem more interested in lobbying congress to get better royalty rates than they do actually helping the members they are supposed to be fighting for.

I am a perfect example of a pro-active SoundExchange member who is fed up. I am an artist who cannot seem to get paid what he is owed.

SoundExchange need some help. They need to hire employees who actually care about musicians. No one I’ve spoken to, interacted with via email or met in person actually seems to give a damn about musicians. How ironic.

What is the alternative? What are we supposed to do?

Photo is by Life Mental Health from Flickr and used with the Creative Commons License

Ari Herstand is a Los Angeles based singer/songwriter and the creator of Ari’s Take. Listen to his new album, Brave Enough, on Spotify or download it on BandCamp. Follow him on Twitter: @aristake

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Comments (27)
  1. Indie dude

    I thought it was just me..I jumped through a TON of hoops to get signed up..and I mean a TON…(had to get a letter from my bank,my license wasn’t enough ID etc.etc.) I gave out a lot of important personal info – (banking etc.) and as unorganized as they seemed I couldn’t help but wonder where that info might end up…then once I was supposedly signed up I couldn’t get an email response to a simple question about registering new songs…I eventually gave up and i’m pretty sure I have a few bucks coming…not that I want anyone else to suffer but it’s comforting knowing that i’m not the only one.I was EXTREMELY unimpressed…a real waste of time :(


    Reply
  2. Anon

    Double hosed! First by congress and their absurdly low rates collected on your behalf by SoundExchange. Then hosed again by SE as they can’t seem to get their act together. i’m sure SE has a huge database of ‘suspended transactions’ with the associated revenues sitting in a bank account somewhere. just make sure they get your content assigned to you correctly before the write this off and send out a one time adjustment. they’ll probably be some decent coin in there for you.


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    1. Anonymous

      Absurdly low? If the rates where much higher they would not be collecting anything at all.


      Reply
  3. Chris H

    I imagine they enjoy their black box take at an obscene level.

    I’m having the same sort of problems with them now. They give strong mixed singles that they don’t work with administrators. But if you push them on it (i.e. how is this legal), then they play ball. Just enough for you to go away.

    Your not alone Ari. You just got to keep hammering them.


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  4. Anonymous

    Come on, can you really be unimpressed with an ultimate middle-man? Their game is smooooooth.

    Worse could be an ASCAP story where after working college radio for a band out of Oakland for 4 months, the band gets approximately 90 confirmed adds for a region. Later, after helping the band follow up about a year later with ASCAP we are told that because those markets were not Top 100 in the nation then there won’t be any money paid.

    ASCAP extorts small market college radio for annual fees, does not track spins in those markets and then uses the money to pay (major label) artists receiving airplay that is tracked in the Top 100 markets. That scam has to stop as well.


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  5. GGG

    Based on my experience with SoundExchange, I’m pretty sure the only thing anyone who talks on the phone knows is “well, sir, there are two types of copyrights…” I think I’ve heard that line more in 3-4 phone calls than any other phrase in my life.


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  6. also

    it was extraordinarily difficult to sign up, and it took 4 tries over a couple years, including multiple phone calls, which had to turn angry, and also some online vents on public forums. how an organization that handles hundreds of millions has such a bad website — even now, you can’t even log in as a member and see your statements (unlike ASCAP etc.)

    i did eventually get paid (hundreds of dollars) but i also have a repetoire that’s about 70 songs, and only 9 show up on statementsand …i also don’t see my most ‘popular’ songs.

    i used to think it was incompetence… now i wonder if it isn’t by design. who is on the board or advises this multimillion dollar company? hope it’s not tech or record label guys…


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  7. Mickey Mac

    If Soundexchange was set up by the Government to distribute royalties (ie: $$$), and such a large number of registered users/artists are experiencing this level of difficulty getting paid for content that is properly registered with Soundexchange, it sounds as if the matter/claims may be ripe for a class action lawsuit against Soundexchange – especially if it can be proven that Soundexchange is profiting from its own mismanagement of registered content. From what I’ve read in the main article and comments, it would appear that Soundexchange representatives/executives either do not know how the system works OR may be intentionally playing dumb and communicating mis-information in order to perpetuate the confusion, thus preserving Soundexchange’s golden calf. If intentional, it may constitute willful fraud, but even if unintentional, the claims, if substantiated, would certainly appear or have merit and would warrant such a class action.


    Reply
  8. Willis

    You would think, after all these years, that artists would be used to this kind of typical music industry practice.


    Reply
  9. Ray

    I wish I could say Ari was a special case here, but sadly, this is a common tale with artists trying to get signed up with SoundExchange.


    Reply
  10. Anonymous

    I’m wondering whether there were any artists who registered with SoundExchange before their October 2013 cut-off for collecting from the pool release of unclaimed royalties from 2004-2008; who had the these sign-up issues and lost out on their royalties? On that note, I thought it was curious that SoundExchange didn’t seem to proactively work to locate any of the artists that hadn’t claimed royalties from that period. I recall a number of artists on their list were fairly recognizable names, that an intern probably could have sent an email along to in order to notify them about the unclaimed royalties. That was a signficant pool of uncollected money. Here’s an old article about that: http://www.billboard.com/biz/articles/news/5893782/soundexchange-finally-releases-old-unclaimed-royalties


    Reply
  11. derelict

    I’m wondering whether there were any artists who registered with SoundExchange before their October 2013 cut-off for collecting from the pool release of unclaimed royalties from 2004-2008; who had the these sign-up issues and lost out on their royalties? On that note, I thought it was curious that SoundExchange didn’t seem to proactively work to locate any of the artists that hadn’t claimed royalties from that period. I recall a number of artists on their list were fairly recognizable names, that an intern probably could have sent an email along to in order to notify them about the unclaimed royalties. That was a signficant pool of uncollected money.


    Reply
  12. Ben Stauffer

    Ari, it’s too bad you and others didn’t see my article on this very website last July about how to sign up for SoundExchange and some particulars about repertoire submission [note that DMN has long taken down the permalink, but the piece is available here: http://ow.ly/wFVpe

    I do understand that you’re having problems with getting your repertoire verified, and there is a program (albeit through SoundExchange claims) that you may be able to use to get things cleaned up. DM me at @musicbizben if interested in more info. Note I’m a music biz executive independent of SoundExchange.


    Reply
  13. ANOYMOUS

    Ari, You do realize that SXCHGE takes a small admin of 4.9% of the money.
    And if you are a label owner you should know your rights, I do, I got a $2,000 + sound exchange check. but i worked my butt off for that.

    and now i do internet radio stations that generate radio stations and guess what, I am now, this month, cutting checks TO sound exchange for the first time.

    some digital players like XM now have direct deals and thus pay less when those artists are played, and thus those artists are played more, and that’s not sound exchanges fault.

    So before you cast this stone at sound exchange i must inform you of a few things.

    1. I know many musicians that have collected thousands of dollars that have helped them pay bills and feed their families.

    2. Over the past decade, the players in the game have colluded to eliminate available airspace for people like you. and i hate to say, that people like me, also got eliminated. But i fought on.

    Direct deals with labels have meant playlists that were large and controlled by people like me, were taken over and given primarily to a few decision makers and the deals with labels secured more airtime for them.

    this is not sound exchanges fault. they are fighting for me, and musicians everywhere.


    Reply
  14. Robert von Anzen

    Ari,

    You have to ascend the S/X corporate structure to get results. I expect your cri de poche will now find your case assigned to someone a bit more competent.

    It has been my experience with S/X gained over the past 7 years that hardly anyone there knows the difference between a record label and a copyright owner. To give a simple example : if a copyright owner licences to another label for a compilation, the compilation label is by default paid.

    Then there are countless examples of certain labels and aggregators hoovering up claims. They never seem to get into trouble. UK labels love indulging in this kind of mass pick pocketing.

    I think the gold rush at S/X started around a year ago. Since then S/X has been inundated with claims and counter claims. Their historical problem was the under claiming of royalties; now it is the over claiming.

    Finally, remember that S/X has decided to base itself in Washington D.C.. Fine for lobbying but disastrous for hiring the army of competent clerical staff that they need.


    Reply
  15. arthurjowens

    SX is an operational disaster. My music was in the Plays database as well and I registered before the cut off for old royalties. I started the registration process, received one additional info request from SX and then never heard back from them, regardless of repeated requests for additional info.

    ASCAP and BMI have had automated registration systems for years. SX doesn’t have a remotely elegant registration or reporting system. That’s because SX was not built by or for independent musicians or labels. It was built by and for the major labels. You better believe they are getting paid in full.

    This week, following in the footsteps of WOXY, another pure play internet radio station will be announcing its imminent closure, with the excessive pure play rates being one of the leading financial pressures that brought it down. Stay tuned for that info. Those of you championing SX are going to find that you are left with primarily major outlets that feature major label music. Just like the industry used to have it, before the internet.


    Reply
  16. anonymous

    There needs to be audit rights so shit like this doesn’t happen!


    Reply
  17. RecordingArtist

    I’m sorry to hear about these troubles with SoundExchange. I’m one of the lucky ones who has been paid. But I can relate to your troubles, because I myself have never been paid by ASCAP.


    Reply
  18. Courtney

    I could have written this exact article! So frustrated. Makes me wonder what they are doing with our money.


    Reply
  19. Rammy

    I am an independent artist, owner of the copyright of all my materials in addition to being member of ASCAP. I felt the need to sign up with SoundExchange and was on the verge of doing so, but after reading Ari’s article I must say I am a little hesitant now. I am even more confused about the lack of different alternatives. I’m still going to learn more about the subject matter, meanwhile if anyone knows another option than Sound Exchange, please enlighten me.


    Reply
  20. Jay

    I received 2 calls from SoundExchange and just signed up. I helped a friend sign up and they received a $160 check after only 6 months of play on Pandora and other stations. So far my experience with them has been fair. I’m shocked to read all these horror stories. I thought it was weird for them to call me but I decided to give a a try because they are obviously paying some people. They also give half of your money to IRS.


    Reply
  21. Noah Silver

    Sound Exchange is legit. Signed up with them a couple years ago, and now that I’m starting to actually receive some streaming movement of my music, I immediately got paid via direct deposit. They pay monthly too if you sign up that way. I’m signed with BMI too, which is where I’ve been collect my quarterly statements for years, so I think it’s pretty great that S/X is allowing you to log in and see everything and get paid on a monthly basis now so long as it’s direct deposit.

    By the way, you might not want to be so quick to judge. I’ve personally met Marie, Lauren, and many other of the S/X team here in D.C. and they have a pretty good grip on what’s going on. There’s more to the eye than can first be seen. Sometimes it’s a question of figuring out with sloppy metadata where the payment should actually go to, or changed addresses, etc. They do a lot of hard work and as I took that last check from them electronically to the bank I was happy for said work. Looking forward to the next.

    And yes, it’s frustrating, but sometimes meetings get cancelled because people are human and actually get sick.


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  22. James

    I have been with Sound Exchange for about 5 Years. I had the exact opposite experience. I receive regular royalty deposits and the customer service has been very helpful. If you want to get screwed out your money try ASCAP or BMI. I have more than 200 songs in circulation and have never received a single ASCAP check. I switched over to MCPS (The UK equivalent to ASCAP) and even with the money exchange and yearly fee, I made out better. JUST MY $.02


    Reply
  23. Versus

    Ari -
    Thank you for this exposé. Since there is no viable alternative, we have to press SoundExchange to reform their system. I heard there is an update to their online system in the works. Meanwhile, publicizing this shameful mess may be the only tactic to pressure SoundExchange to get their act together and properly compensate creators and rights holders.
    Any updates on your end?

    Thank you again. Very useful info.


    Reply
  24. Oldies but goodies

    Oh boy do I have a story to share ! Someone needs to do something about Sound Exchange. They are horrible. For over 3 years someone has claimed to own music that isn’t theirs, and has been getting paid for it . In comes the rightful,owners, and they have to get a court order and prove their claims. The documentation is obvious and proven yet the bozo thief is sitting pretty , so far, without so much as a slap on the hand for many thousands of dollars of theft. SX makes it very difficult for a rightful owner to get what’s theirs, as they won’t decide who’s right and who’s Wrong, they will take anyone’s word for it and pay out all your money just by turning in bogus documentation. Very untrustworthy in my book.


    Reply
  25. Bulletproof

    Does anyone have any suggestions about whether or not to register with SoundExchange for Canada collection. I’m considering signing up with PPL to do all International collection, and have SoundExchange just do US only. But it seems like it would make more sense to have SoundExchange do US and Canada = North America, and have PPL do the UK and rest of world. Anybody with experience with this? The SoundExchange agreement kind of encourages you to use them only for US.


    Reply
  26. for Perry Lederman

    Now I’m understanding why, after a few years of being registered, I get an invitation to apply for the “rights ownership” royalties for my deceased husband’s music. They were (for the first time) quite efficient and helpful and I actually got a check for back-issued royalties in April 2014! Since I too had enrollment experiences that were administratively sketchy, I thought the company was finally working out it’s management issues. Now I’m beginning to think that they wanted to look impeccable for the scrutiny they knew they’d be getting and I’m a great one to practice doing the right thing for because the dollar amounts are small.


    Reply

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