How important is such an organization for recording artists and record labels? Knowles states that the digital royalties SoundExchange is responsible for and the statutory license it administers is incredibly important to recording artists and record labels. “Currently,” she points out, “performers in the United States are only paid when their sound recordings are performed via digital radio—they do not enjoy a full performance right. In other words, they are not compensated when their work is broadcast on AM/FM radio.”
By registering with SoundExchange the individuals who created the sound recording are now able to collect digital royalties for their work. SoundExchange does support legislation that would provide recording artists and record labels with the right to be paid royalties when their work is played via AM/FM radio. “We encourage all recording artists and labels to learn more and join us in this effort,” she says.
I was so intrigued with their process because I had seen a significant increase in my own royalties. According to Knowles, in 2003, when SoundExchange became an independent non-profit organization, they were collecting royalty payments from approximately 400 digital radio services. Today, they collect and distribute royalties to artists and labels from more than 2,000 digital radio services, including satellite radio, Internet radio and cable TV channels.
This means that in just a decade, according to Knowles, “Sound-Exchange has put more than $1.5 billion into music creators’ pockets. In fact, the organization’s third-quarter 2013 payments of $153.7 million mark the highest quarterly payment to recording artists and record labels to date. When compared to SoundExchange’s entire 2003 distribution of $3 million, it is clear that more and more music fans are listening to their favorite artists through digital radio.”
It is important to note, as SoundExchange points out on its site, “SoundExchange is the performance rights organization (PRO) for the digital age. The royalties that SoundExchange collects and distributes are for the featured artist and the sound recording copyright owner. ASCAP, BMI and SESAC collect and distribute royalties for the songwriter, composer and publisher. Both satellite radio providers and webcasters pay SoundExchange when they stream music due to their utilization of the statutory license.”
It is still necessary, then, to join one of the three PROs: ASCAP, BMI or SESAC, to receive your publisher and writer royalties.