Dec.30
2008
Sound Exchange: Made Of Fail...
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Within a couple days of each other in the last week, I got my 4th quarter ASCAP publisher's statement and my "Unit Of Arbitrary Time" artist statement from Sound Exchange. If you click on that picture, you can actually read the numbers. You will notice a large disparity. The ASCAP statement is 113 times the size of the Sound Exchange statement for the roughly equivalent unit of time.

I'm not necessarily pointing out the disparity in income from the two sources here, because my ASCAP checks are entirely from television, a more-or-less profitable medium, while Sound Exchange assfucks unprofitable start-ups, and businesses made of lose, so there's no real shock about that. My point is in the relative effort I expended to get those checks. When I joined ASCAP, about a week after my first album was released, the entire event largely consisted of walking in to the building across the street from Lincoln Center and saying "hey, I'd like to join up." I signed my name to a form that a members services person filled out for me, and that was that. The checks started up about a year later, and haven't stopped.

Now, with Sound Exchange, it was a somewhat different process, to put it mildly. First off, Sound Exchange doesn't collect performance royalties, which is what ASCAP, BMI et al collect. Performance royalties are split between the songwriter and the publisher of the song, are paid where music is performed (on television, in elevators, at Starbucks, etc.), and are there to ensure that the chump that wrote the song can pay his rent. Sound Exchange is entirely a child of the RIAA, and in order to justify their existence, they made up an entirely new royalty category. Inexplicably, they collect royalties from Sirius/XM (who, I might add, already have to pay MONSTER ASCAP and BMI licenses), all the interweb streaming services (ditto), that sort of thing.

The way the RIAA pulled this off was by lobbying Orin Hatch to slip this new royalty category in to the DMCA, long story short. They did it so that labels who felt they were losing money on digital transmissions (because, you know, RealAudio and Sirius are "CD Quality" and stuff) could get a little something on the back end. So entirely unlike ASCAP/BMI performance royalties, which go to the writer and his publisher, Sound Exchange royalties go to the label and the performer.

While it may not seem like such a bad deal if you're the label or performer, you obviously haven't filled out Sound Exchange's forms yet. To anyone with even a passing understanding of copyright, it was readily apparent to me from the day I started the week-long process of getting my lengthy catalog in their system that they were making it up as they went.

Now, up until Audio Damage came along, my income consisted almost entirely of royalty checks of one form or another. I'm a fairly intelligent person, I'd like to think, and I've taken the time to educate myself about what royalties I should be getting, why I get them, and how to finesse those sources of income. But Sound Exchange boggled me. I had to call them for clarification several times (and don't forget I had to do all this twice, as a label and as an artist; the above statement is the "artist" portion of the proceeds) and, as I said, I spent about a week dealing with their nonsense.

The statements they send don't actually contain any information at all. This latest one was 9 pages, and each page had the same entry, exactly as you see it in the picture: SISTER MACHINE GUN 16.47. This leads me to believe that the only performances they were able to notice were of my 90s band, even though my other two projects get equal or greater internet airplay. So there's that. I have no idea whatsoever what source this 16.47 came from, why it came, or how to make it better. I don't know what song it was for, or how to split it among the other performers. In short, the information is entirely useless, and as such isn't information at all. Since Sound Exchange sends these statements basically when they feel like it, I don't even know when the fuck this happened.

Now, I'm not the sort of person that looks a gift horse in the mouth, and as a content provider rather than a content consumer, I value all income streams that I can get my greedy little hands on. But Sound Exchange has got to be one of the dumbest rackets in the music industry, and is yet another way that the RIAA is steadily trying to turn the recording industry back in to the sharecropping of the 60s when they were happy. Leonard Chess would be proud.

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So... Is there a way to reap the same benefits ($16.47) of sound Exchange with out using them? Anyone else provide the same service or is it clearly a monopoly?

posted December 30, 2008 by elxicano
It is entirely a monopoly. They are theoretically a non-profit, although the entire point of the organization, created by record labels, is to squeeze the various entities that are trying to promote their product, so the logic fails on several levels. But they're the only federally mandated organization with the ability to do this.

I think, in the three-odd years that I've been a member, I've netted a total of maybe a grand, combining both the label side and the artist side. I get one ASCAP check a month (and two months a year I get two) and the one in the picture above is a smallish one. They've been as high as $11K individually.

Although, comparing the two fiscally isn't really my point. I'm just pointing out how stupid Sound Exchange is by using how stupid ASCAP isn't as a benchmark.

-CR

posted December 30, 2008 by Chris Randall

This post makes me feel guilty for not being more vigilant reporting our music to BMI. I totally slack on that and I'm sure I'm missing some significant income. I admire you for how ON IT you are.

My band is on Dischord and our music is fairly unusual within the scheme of people's orthodox expectations of what that label is about. [Misperceptions of what Dischord is about is another very boring topic entirely.] One common description of our music is "filmic" (which I prefer to "dreamlike," which is better than the less flattering but equally as common "totally totally totally lame").

This "filmic" tag has resulted in a few requests for using music in various indie film-based licensing situations [the latest is this one: link [festival.sundance.org] which will use 3 or 4 beauty pill songs]. These have been handled by the band or the label in a fairly desultory fashion. As of yet, we have no policy or protocol on the matter, just kinda improvise.

We don't have any proper 21st century (read "mercenary") representation to exploit what has emerged as the New Economy (read "the Only Economy") for independent musicians. I suppose this is the next step. Representation, I mean.

So, um, all of this is a longwinded way of saying that until reading this post, I had never heard of Sound Exchange and I enjoyed the education.

I'm currently writing some music for a public radio show, so I'm gonna have to get myself some knowledge soon on this whole intellectual property topic.

- c

posted December 30, 2008 by beauty pill

It always seemed weird to me that we collect broadcast royalties for songwriters and publishers, but not for musicians.

The quality of the audio is irrelevant. Use is relevant. It used to be audio was delivered on CDs. Now, audio is delivered any number of ways, but the use is still the same, regardless of quality.

I actually prefer BMI's/Sound Exchange's online catalog management today vs. the old days of paper, pen and snail mail. In that regard, I feel matters have improved. Now if Copyright registration would just catch up.

posted December 31, 2008 by stretta

Thanks for this wonderful post!
I have always wanted to hear about this from an active band who was enrolled - my suspicions have sadly been confirmed. Although I feel any organization that pays artists should be doing something right... Have you tried contacting SoundExchange directly to register the other projects you are now in? Have you ever spoken to anyone from their organization like you did at ASCAP? I would love to know.

posted December 31, 2008 by cyberpr
Most non-USA countries do require performance royalty payments (for radio) to the owners of the sound recordings.

In the USA, the argument has been that radio is effectively promotion for the sound recording and thus should be exempt.

Radio eventually became a multi-billion dollar business. The record companies, of course, were furious that radio did so, claiming "radio built their business on our backs". (Never mind that radio is the #1 way people discovered new music, and that the labels were and are willing to repeatedly violate federal law to pay millions of dollars to guarantee airplay on it).

So when Internet "radio" and Satellite radio came along, the labels did what they thought was right - they imposed extremely high sound recording performance royalties as a condition of use.

The end result is that your little Internet radio station has to pay far more royalties per play than any "terrestrial" station. This despite the fact that you are, in all likelihood, doing a more targeted (and thus more effective) promotion of content. And you have to abide by incredibly Draconian rules around how you transmit/broadcast, while terrestrial radio can continue to say "get your tape recorders ready, we're going to play every Beatles album back-to-back with no commercial interruption!"

I work for one of the major music subscription services and know far more about this than I should.

I agree SoundExchange sucks. What would you expect from something owned/controlled/operated by the labels?

They'll be happy to give you a license to cover a song, though, at "reasonable rates". I'm sure most people use it.

posted December 31, 2008 by Jinsai

Sadly, it's not as if ClearChannel is any better for artists, listeners, or America in general :(

Why can't the recession be affecting THEM more?

posted December 31, 2008 by Chaosium

As an artist who has been a SoundExchange member since 2006, I'm demanding change by running for the position of Executive Director of SoundExchange. I sat down with both John Simson and Cary Sherman of the RIAA earlier this year and we cannot tolerate the lies for another day.

link [www.bit.ly]

I appreciate your support.

posted July 9, 2010 by thehighwaygirl

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