Fair? Artists Will Start Losing Their Unclaimed Radio Royalties on Monday

Last month, we published a stunning list of high-profile artists not registered to collect streaming radio royalties from SoundExchange, including Skrillex, Fleet Foxes, Swedish House Mafia, and A$ap Rocky, among many, many others.

These artists either refuse to register, forgot to register, or have no idea that they need to register at all.  Either way, many of those artists – including many lesser-known, struggling musicians – will begin losing these royalties for good starting Monday.

According to this advisory from SoundExchange, artists that haven’t registered ‘may’ start surrendering royalties by Monday, October 15th, specifically for those collected three or more years ago.

“Register by Oct. 15 as you may risk losing any royalties collected three (3) or more years ago by SoundExchange.”

But wait: where’s all this unclaimed money ending up?  SoundExchange has grown notorious for accruing hundreds of millions in unpaid royalties, refusing straightforward questions about these holding balances, paying its executives hundreds of thousands in salaries, and spending considerable energy (and money) spinning against critics like Digital Music News.

Perhaps the bigger question is whether it makes sense to demand ever-increasing royalties from companies like Sirius XM, Pandora, and other streaming radio providers when those royalties only sometimes make it back to the proper rights holder.

After all, if substantial amounts of paid royalties aren’t going to the artists, what’s the point?

 

29 Responses

  1. Spotifycounter 0

    Congratz! Article about royalties. No reference to Spotify. Keep it up

  2. My Banana Stand

    Guess Spotify PR hacks had a meeting and decided to troll DMN. Sorry Paul.

  3. NMD

    This is simple:

    1. Soundexchange = scam

    2. Less artists register = more money in SE pockets

    3. More money in SE pockets = more interest payments

    4. More interest paymets = more salaries and job security

    5. More salaries and job security = less incentive to actually pay artists

    6. Less incentive to actually pay artists = (see 1)

  4. Bb

    I got my check this week…sign up get yours if you are due some money. It takes a little work especially if you have a large catalogue ..but once done they pay like clockwork.

  5. Amy

    I work at a rights agency, and of course people need to register. We do what we can to promote ourselves and make the registration process straightforward and accessible, but with hundreds or thousands of creators out there (depending on your service’s market), we can’t contact all of them, they need to come to us. If you’ve been getting airplay on streaming sites for three years and have made no attempt to pursue royalty collection, then yes, at a certain point the books need to be closed and the deadline set. That’s just good business. I don’t agree with all of SoundExchange’s policies, but this is one which is common to most — if not all — rights agencies in some form or another.

    • musicservices4less

      Hi Amy,

      I work with the rights agencies both national and international for a very long time. This issue has been an on-going frustration for all working in the business on the side of artists, writers, etc. It has nothing to do with digital or the new music businesses online. The reason why most agencies have a “3 year policy” is because the accountants (hey, not the lawyers this time!) claim that this is “standard” accounting practices. Really? Then why can the major labels go back many, many years when there is a claim of no payment and produce thier statements? All it takes is setting aside a reserve and keeping the digital statements that are always generated each accounting period. What, their servers will fill up with data and they may have to buy more servers?! WTF!

      Think about it.

  6. Dave

    Wouldn’t it go into Escheat so the artist would have to go to the state instead of SoundExchange? And if that is the case isn’t that just the law not Soundexchanges fault?

  7. Jeff Robinson

    Until 3rd party licensing is addressed, this will continue to be the case too.

  8. Food For Thought

    I agree with Amy above and would like to add that SoundExchange has done matching exercises and outreach messaging via every notable social network, via distributors, labels and the press to reach the unregistered. While commenters/readers here may think it’s ridiculous that SoundExchange just doesn’t send a check to Skrillex (for instance) it is absolutely reasonable for a performing rights society to require some legal representation from each performer and copyright owner to protect themselves from the hornets nest that would result if they didn’t.

    You may not like it, but it is a standard practice for all performing rights orgs to hold money for a period and then release unclaimed money to the general registered pool after that period. That you don’t mention this in your article either indicates that you aren’t aware of this or indicates that your agenda is simply to put SoundExchange in a negative light. It’d be more accurate to applaud SoundExchange for never once having done such a pool release in their 10+ year existence.

    At some point they must or do you have a better solution to suggest?

    BTW – for those misinformed commenters/readers who think that NOT paying out money benefits SoundExchange, you should know that SoundExchange funds its operation from a publicly disclosed admin fee (that is less than comparable PROs). There’s no scheme here, just bad, lazy or unqualified artist managers/representatives who aren’t doing their jobs getting their artists signed up and collecting.

  9. dhenn

    The “point” is Pandora, XM, broadcast radio and all the rest shouldn’t be allowed to use music for FREE to make millions in adverstising. If an artist can’t get their shit together enough to register then tough! It’s not like Sound Exchange is some big secret! If they’ve been given a reasonable amount of time to register and haven’t the money should go into a pool and distributed to the artists who have registered.

    Let’s be real, it’s not like ASCAP has made the effort to give the royalties they collected from stations I’ve been played on hundreds of times and sent them to me. They sent them to other artists who they assumed where played based on the bigger stations play lists.

    At least I’ve received checks from Sound Exchange!

  10. Dub Gabriel

    The funny thing is, I use Sound Exchange and it was the hardest, most red tape, longest to process thiong to set up. I am not suprised they are doing this because they make it very diffacult to get set up with them in the first place, meaning, they win!

    • Mike L

      it used to be harder to sign up now they made it a lot easier. I had to find a damn blank check and since I didn’t have any around that would mean contacting my bank and ordering new checks just to wait and round and void, photocopy and upload a check to register. You know have different options to sign up and they totally redesigned the site which is 100x better than most sites. so know excuses… if you want your money it’s your responsibility. stop blaming someone else!

      • Dub Gabriel

        That’s what happened to me, I never ordered checks from my bank, because I don’t use checks, so I ended up sitting on it for 3 years til I moved to a Credit Union and they offered free checks, which is when I finally decided to finish myregistration.

        It is still the only time I have used my checks, lol!

        • Catherine Hol

          I just saw a comment on The DIY Musician regarding this:

          “The problem with Soundexchange is that they require you to send a copy of a voided cheque in order to verify the bank account you want them to pay royalties into.

          In the UK most modern bank accounts don’t use cheques anymore …”

          Indeed, as the commenter said, why can’t they just use PayPal?

          Or have a few different payment options available … after all, they do have plenty of money for admin and salaries.

  11. Rock N' Roll Buddha

    The number of artists that I know who have EVER received a penny from Sound Exchange I can count on one hand. And what they got paid I could hold in one hand with room left over.

    Stevie Wonder could have seen this coming… Its a SCAM as referenced above. Someone over at Sound Exchange is going to pocket a LOT of money… And It isn’t the artists.

    Why they haven’t been investigated by the government is beyond me.

  12. jonweisberger

    I know scores of artists, myself included, who are happy with SoundExchange; they signed up, they collect their royalties. I don’t see a problem here.

  13. sx

    if 3 years is the norm (or law) for all societies then i don’t see the problem.

    what concerns me is the accuracy of the reports. i got two statements (one chq) reporting my earnings for the same period. both were the same final amount, but the song breakdown and they licensees were quite different. my ‘top earner’ only appeared on one statement. other songs didn’t appear on both; the ones that did in every case had different royalty amounts, some differing by around 20%. the numbers were small, so i didn’t follow up, but it did feel somewhat arbitrary.

    • Artist

      Wait nevermind.. this is okay because it means more money for us artists who want money.

  14. Fistful of Dave

    Love how so many are ok with a company that collects money in your name, without permission. Then that company expects you to do all of the leg work to get the money they collected for you, without your permission. Then determine to keep the money without any attempt to contact you.

    They should be only able to collect for their members.

    This is the time that artists finally have a say in how their business is handled. It needs to be taken. Enough of these companies acting in their own interest with your artistic work. Now if you want them to handle your business fine. It should be a choice.

    • Nice Guy Eddie

      Choice is great for those who can make an educated decision. And I agree with your comment in theory. Artist who are in control of their business should have a choice.

      However, you are assuming that an artist who is too lazy to complete an online form to collect unpaid revenue is capable of collecting that revenue for themselves in the first palce.

      There are a lot of lazy and stupid artists out their and soundexchange makes it simple for those.

  15. bigeoppa

    This is the classic Black Box scam in a digital format. The arbitrary 3 year rule has been used for years to place MORE money within the coffers of the Major Labels.

    Did you forget WHO IS REALLY RUNNING Sound Exchange?

    Where did the executives come from and who are they beholding to?

    For years the pubishing business has had a Black Box where they place money that has not been “requested for collection”. after 3 years this money is divided between the major publsihers (who are the only ones at the table), strange as it may seem the major publishers are the same families that own the major labels.

    Labels, publishers, distributors, manufactuers and more can keep records for years yet we are to believe that after 3 years Sound Exchange must clean their files and KEEP the money.

    By the way Did You give Sound Exchange the right to collect your money?

  16. sasebastian

    “Black box” scam? SE pays out based on every single reported play. ASCAP/BMI on quarterly smaple periods. Virtually everyone gets paid by SE, not everyone gets paid by ASCAP & BMI. In all cases you have to be registered. How are they supposed to know who to pay, where to pay and in what splits? They don’t magically know this information.

  17. LyndaDawson

    As a small artist in a niche genre I’ve been extremely happy with the royalties received from sound exchange. Sign up. Get paid. A little bit of something is a whole lot better than a whole lot of nothing.

  18. @trumpetdude02

    Sound Exchange now wants to keep unclaimed royalties!!!! Just another big brother looking over shoulders!!!!

  19. Older music vet

    there will never be a system in place that does not draw criticism. 🙁

    There will not be a unified performance royalty system in place that everyone agrees is fair and beyond reasonable.

    I’ve been at this now for 40 years. I get my money. It’s just not that difficult.