SoundExchange Introduces A New Song Code Search Tool

You'd think that with so much music existing in the digital domain that it would easy to track down the usage and royalties for a song, but unfortunately that's still not the case. Despite calls for the recording industry, there's no one single search engine that can find that data, but SoundExchange recently came up with a step in the right direction.

SoundExchange now offers an online tool for looking up the ISRCs, or International Standard Recording Codes, that are related to the nearly 20 million recordings in its database.

ISRC codes have long been the standard method for identifying sound recordings, first being introduced in 1986. Each code number is comprised of a two-letter country code, a three-character code for the registrant, two numbers for the year, and five numbers assigned by the registrant. The RIAA oversees the ISRC system in the United States and its territories. The IFPI oversees ISRCs globally.

SoundExchange's search engine allows you to look up an ISRC code by artist name, song title, album, year, version and UPC/EAN. The result can be added to a cart for future reference, which can then be exported to a CSV file so the data can be inputted to a digital service's system. The IFPI also provides a lookup tool it created in conjunction with SoundExchange with identical information.

SoundExchange collects royalties for non-interactive streaming platforms like Pandora and satellite radio only.

As said before, this isn't the ultimate solution that everyone has been wanting, but it's the best solution so far in that it provides cross-check information to make sure that copyright owners are being paid at least in some areas.

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SoundExchange Becomes A Major Source Of Online Revenue

When non-profit SoundExchange first started in 2000 its royalty payouts were so small that they were only rounding errors on most copyright owner and artists income statements. Today that's all changed as the service recently announced that it sent out $1 billion in royalty payments last year alone.

This is quite an achievement since it took SoundExchange 10 years to reach the first billion in payouts but two years for the second. In fact, last year the royalties paid by the organization accounted for about 16% of the American music industry's total income.

So where does the money come from? SoundExchange collects money only from digital radio, with the bulk of it coming from SiriusXM and Pandora. As a result, the organization has now become one of the major PROs along with ASCAP, BMI, and SESAC.

After deducting about 4.6% to cover its operating expenses, the organization sends 50% to the copyright holder (usually the record label), 45% to the featured artist and performers, and 5% to a special fund for session musicians and backup singers.

What's significant here is that artists actually get paid for radio airplay, unlike terrestrial radio where only the publisher and songwriter get paid.

If you're an indie musician and you're getting airplay on digital radio, there may be some money waiting for you in escrow. Sign up at SoundExchange today.

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The Big Shake Up In Licensing On The Horizon

Everyone acknowledges that the current copyright law that we live under is outdated, but it's been really difficult getting any updates to the law passed in recent years, mostly because of special interest groups and the fact the a complete overhaul is required rather than just a few band aids.

That overhaul just got a little easer thanks to a 245 page report issued last week by the US Copyright Office officially throwing its weight behind some big time changes that would definitely benefit copyright holders.

The paper made a number of specific suggestions, many that will bring some large media corporations (like broadcasters, for instance) kicking and screaming into the 21st century. Here are some of the things proposed.

1. Everywhere in the world except the United States artists get paid when one of their songs is played on the radio (the songwriter gets paid, but not the artist). The artist gets paid when a radio station or streaming service streams online in the US, but not for traditional terrestrial airplay as it's claimed to be "publicity." The broadcasters have successfully lobbied forever about how their business would be destroyed if forced to pay artists while they've raked in billions. Now the Copyright Office finally agrees with what artists, managers, record labels and even the general public has been saying for years - let's pay the artists for airplay.

2. There's a funny loophole in copyright law where a song from before 1972 can be used by radio or streaming services without payment to the copyright holders. There's been a number of high-profile lawsuits (The Turtles successful suit being one) about the fairness of this doctrine, and the Copyright Office agrees that pre-1972 songs should be treated just like post-1972 songs.

3. The amount of money that performance rights organizations like ASCAP and BMI can collect is governed by a piece of anti-trust legislation called the Consent Decree. Basically what it means is that these organizations must offer licenses on equivalent terms, but those terms haven't been updated to keep up with the latest technology or the evolution of the business, so copyright holders are still bound to a rate that's decades old. It's actually a much deeper subject, but the gist is that the Copyright Office is finally agreeing that the Consent Decree should be reevaluated and updated for the Music 4.0 world we live in.

4. Producers get a royalty on units sold, but the payment can either come from the record label or directly from the artist, which means that it can be really difficult to get paid sometimes. The Copyright Office recommends that producer payments now be administered by Soundexchange as a way of freeing the label and artist the burden of accounting, but also making sure that the producer gets paid as well.

There are other recommendations in the paper, but any one of the above will bring sweeping changes to a system that badly needs it. Read the full report.

What We Can Learn From The Top 20 Streamed Artists Of 2014

One of the ways that streaming music differs from radio is that it's so democratic. You listen to what you want to, so any streaming chart or list better reflects the musical tastes of the listeners.

Soundexchange put together a list of the 20 most streamed artists in 2014 based on royalties it has collected, and it will surprise you. The list shows a variety of new and classic artists, as well as a cross-section of genres. Here it goes:

1. Drake
2. Pearl Jam
3. Rihanna
4. Katy Perry
5. Bruce Springsteen
6. Lil Wayne
7. Luke Bryan
8. Imagine Dragons
9. Eminem
10. Pink Floyd
11. Usher
12. Maroon 5
13. Jason Aldean
14. Bruno Mars
15. One Republic
16. Lorde
17. Chris Brown
18. Tim McGraw
19. Beyonce
20. Taylor Swift

And the top 5 streamed tracks of 2014?

1. "Counting Stars" - One Republic
2. "Dark Horse" - Katy Perry
3. "Demons" - Imagine Dragons
4. "Royals" - Lorde
5. "Happy" - Pharrell Williams

The Billboard charts have always been skewed towards pop music because they were based on radio airplay, which has a very limited playlist that gets even more so every year. That said, streaming is a much better way to see what people actually listen to, and the analytics are far more accurate than the surveys traditionally used to determine radio airplay.

I think you'll see a much better reflection of music consumers tastes in the coming years, which could very well influence the music available, as record labels follow the analytics.

Sony's Direct Deal With SiriusXM Could Be Bad For Musicians

Right now a lot of publishers are leaning towards doing direct deals with digital distributors rather than letting ASCAP or BMI (the performance rights organizations or PROs) take care of it as they traditionally have. The idea is that the data is easier than ever to collect since it's all digital, and the PROs can take a long time to pay and then take a piece of the revenue as well.

This might take a while to play out on the publishing side, but on the label side, Sony-owned distributor The Orchard is making a play to cut the middle man out of the picture by making a direct deal with SiriusXM. In what could be the first of many deals, this removes the collection agency Soundexchange from the revenue picture.

Remember that when it comes to digital airplay, there are actually 3 parties that get paid - the songwriter, the label, and the artist (the latter two don't get payed for traditional terrestrial broadcasts). Soundexchange is the designated PRO for collecting this revenue, but The Orchard will now bypass them.

On the surface this sounds great for artists in the it appears there will be 4.5% more money in their pockets (that's the fee that Soundexchange charges), but don't forget that this is a company owned by a record label and labels are especially good at finding ways to not pay the artist all the royalties they've earned. Also, this is just another way of recouping advances so the artists won't see any money at all in end.

Soundexchange has done a great job in collecting and distributing royalties in the past, and based on its track record to this point, seems to be much preferred to a label when it comes to paying artists. Only time will tell how this will work out. If you're not signed up with Soundexchange, you should do so now if your songs are being played online.


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Artists Get Record Payout From Soundexchange

If ever there was evidence that streaming is becoming the new music consumption paradigm, this is it. SoundExchange, the not-for-profit performing rights organization that collects non-interactive distribution royalties for copyright holders, distributed a record $267 million in the third quarter. This is up 74% over the prior year period, and almost 40% more than the previous quarter.

The good news is that at the current rate, SoundExchange distributions could reach about $800 million this year, which is what the value of digital downloads for the year is predicted to be as well. In other words, there's as nycg money being collected from just this portion of the streaming business than from all digital downloads.

SoundExchange collects for both artists and record labels (whomever owns the copyright) from non-interactive radio-like services like Pandora and iHeartRadio, satellite radio and cable music channels. Interactive streaming services like Spotify and Rdio pay the royalties directly to the copyright holder or an aggregator like CD Baby or Tunecore.

It's interesting that download sales are falling a lot more rapidly than physical product sales at this time, but the good news is that decrease is being more than offset by streaming royalties. Considering that there's only about 28 million full-price subscribers world-wide at the moment, there's plenty of room for growth, which is great news for artists and songwriters.

If you're not yet signed up with SoundExchange, you're most likely leaving money on the table if your songs are getting played on non-interactive services, so register now!

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The Court Decision That Could Alter Royalty Payments

Flo & Eddie/The Turtles

A US Federal Court has ruled that SiriusXM violated The Turtles pre-1972 copyright by playing their music without either licensing it or paying performance royalties. The is a big decision that may have far reaching consequences for both classic artists, record labels and digital music services.

Right now digital music services like Pandora and SiriusXM don't pay royalties on any song that existed before 1972 because they argue that the master copyright law didn't exist before then. Broadcasters now only pay royalties to publishers but digital services must also pay the copyright holder when a post-1972 song is played.

The payment to artists and labels is estimated to be at least $60 million before punitive damages. That said, the ruling was made in California and therefore only effects California, so this may prove to be only the first battle in a long war. Several other lawsuits by the major labels and Soundexchange against digital broadcasters are also pending.

While the result may be ominous for the affected digital services, it will have little direct effect on consumers. This may have an eventual effect on broadcast radio though, which has managed to skirt the issue of paying anyone but publishers thanks to strong lobbying on the part of the NAB. With the precedent now set, a new attempt to have radio pay artists when their songs are played might gain some traction in Congress.

The suit was brought by Flo & Eddie (Howard Kaylan and Mark Volman), the two main players of the 60s hit makers The Turtles.

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Streaming Music Primer: The Different Types Of Streams

Now that it's pretty apparent that the music world is increasingly centered around streaming music distribution, many artists, bands and managers still have no idea how streaming pays and why the royalty is frequently much less than expected. Here's an excerpt from the latest edition of Music 4.0: A Survival Guide For Making Music In The Internet Age that provides a basic primer on the two types music streams.

"What most artists and bands don’t realize is that there are two different types of streaming services, and they each operate differently, and therefore pay at a slightly different rate.

Non-Interactive Streams

The first is called a “Non-Interactive” stream and this is either from a platform that acts as an online radio station like iHeart Radio or any traditional broadcaster with an online presence (like your local radio station), or a service like Pandora where the user has a certain amount of control over what plays, but  can’t directly select a song or make it repeat. Streaming platforms in this category include services like Pandora, Last.FM, and iTunes Radio.

Radio broadcasters with terrestrial radio stations pay $0.0023 (.23 of a cent) per stream. Non-interactive platforms like Pandora pay $0.0023 per stream from a paid subscriber, and $0.0013 per stream from a non-subscriber, which increases to $0.0014 in 2015.

This money is paid directly to Soundexchange and is paid out at a rate of 50% for the owner of the copyright (which could be the record label or could be you if you’re DIY), 45% to the featured artist, and 5% to unions that represent the musicians that played on the recording.

If a services like iTunes Radio also provides advertising, it pays out at a slightly different rate as a percentage of the ad revenue is added as well (pro rated of course). In the case of iTunes Radio, that rate is 15% of ad revenue until September 2014, when it increases to 19%.

Interactive Streams

Interactive or on-demand streams are treated different from the radio-style streams in that the rate is considerably higher (between $0.005 and $0.007, depending upon how much the listener pays per month). Services that provide interactive streaming include Spotify, Rdio, Mulve, and Slacker.

The downside here is that if you’re signed to a label, the money is paid directly to them first. You’ll then be paid based on the royalty amount negotiated in your agreement. For instance, if you’ve negotiated a 15% royalty, then you’ll be paid 15% of $0.005, or $0.00075. If you’re not with a label, the money will be collected by Soundexchange or an aggregator like Tunecore, Ditto Music or CDBaby if they’ve distributed you songs to the online streaming services.

On top of the royalty paid to the artist and label, there’s also a publishing royalty that varies yet again from the above rates, which we’ll cover in the next section.

You can see why artists, bands, musicians and even record labels can be confused about how much they’re receiving from streaming. As The Temptations once sang, it’s a “ball of confusion.”

That being said, every artist should register with SoundExchange, a service created by the US Copyright Office to collect performance fees for musicians featured on a recording and a song's copyright owners. SoundExchange collects money for the actual performers on a recording, not the songwriters. Go to soundexchange.com for more information."

To read additional excerpts from the Music 4.0 guidebook and my other books, go to the excerpt section of bobbyowsinski.com

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A Basic Music Publishing Glossary

It's unfortunate that many songwriters are so good at their craft yet don't understand the basics of protecting and controlling their work. Here's a quick basic glossary of frequently used publishing -related terms thanks to the Music Business Association.

Remember that each song has two rights attached to it. The first is for the composition itself (both lyrics and music) and the second is for the recording of that song by the artist.

Composition - The song written by the songwriter(s).

Copyright - The ownership or control of an intellectual property like a song.

Label - The record label, who sign the artist and usually control the copyright of the master recordings. They are responsible for licensing and distributing the recordings, then paying a percentage (a royalty) of the money earned to the artist.

Master - The produced sound recording of a song.

Mechanical License - The license to reproduce and distribute the master recordings in a physical or digital format. CDs, vinyl records and digital downloads all require this license from the publisher of the composition in exchange for a royalty for each sale.

Public Performance License - The license to transmit the compositions to the public via live concerts, radio, television and streaming.

Performance Rights Organization (PRO) - The entity that collects public performance royalties for the songwriter. This includes ASCAP, BMI and SESAC in the US.

Publisher - An entity that controls the copyright of a songwriter's compositions. The publisher is responsible for collecting the royalties on the artist's behalf.

Soundexchange - The entity that collects performance royalties for artists and labels for non-interactive streaming such as Pandora.

Sound Recording Performance License - The license issued by Soundexchange that provides the right to transmit masters via non-interactive streaming.

Synchronization (Sync) License - The license required to add music to moving images, including film, television, DVDs and video games.

Publishing is a deep subject and there are many more terms to become familiar with if you really want to get a handle on how it all works. That said, if you're unclear of the concept, these terms are an excellent place to begin.

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New Artist Checklist

I've posted a previous article a few months ago about SoundExchange, the company that collects and distributes royalties for online and satellite music streaming. It's something that every musician should register for if you have music that's playing online, since that's the only way you'll get paid as a performer (ASCAP, BMI and SESAC only collect for mechanical and performance royalties for songwriters, not musical performances).

They've recently posted a New Artist Checklist that's so good that it deserves reposting. Even if you've been around for a while, chances are you missed at least one of the following. Check it out.

Register your copyrights Copyrights to your original creative works exist as soon as you fix the sounds or words or notes to a medium (written down or recorded). But to secure additional legal rights, you must register your copyrights with the US Copyright Office. Electronic registrations can be processed much more quickly than mailed registrations. Also, sound recording and music composition recordings can be registered together, which, if you own both, is cheaper than doing them separately.  Draft an agreement between band members In the glow of the creative process, it’s easy to forget to put things in writing. Write out an agreement in case issues come up at a later time (and they often do). The agreement should address the rights and responsibilities of the band members including who owns what percentage of the business, what property is owned or controlled by the business (including the band name, web site, and equipment) and who funds the bands and looks after its finances. Break out the percentage of ownership rights of each track – who wrote it? How will you split royalties? Discuss what will happen if band members depart, or new members join. Again, we suggest you consult a qualified attorney, to see if and when incorporation or a formal partnership would be recommended to help protect your assets. At any stage, it’s important to have some kind of written agreement in place.  Trademark your name and logo The US Patent and Trademark Office oversees trade and service marks. Make sure no one else owns the rights to your name and/or logo and if not, be sure to register it. It may be your only way to prevent someone from claiming he or she owned the name first, or claiming to be you later. Registrations can be made in different “classes” to cover recordings, live performances, merchandise and other classes, so make sure you cover the bases. Registration costs can add up in a hurry, but a band or artist name and brand may become one of your biggest assets, so it’s well worth it to protect it early.  Form a company (or companies as necessary) for your label, songwriting/publishing, touring, merchandising, etc.) It’s important to look at your work as a small business, not just a creative hobby, and to get all your legal protections in place. Forming a company, partnership, sole proprietorship or LLC and keeping separate financial records can help ensure that you’re compliant with taxes and can protect your interests. A consultation with an entertainment attorney and/or an accountant is strongly recommended.  Pick a songwriting Performing Rights Organization and register – ASCAP, BMI or SESAC If you’re a songwriter or publisher with a song copyright, you’re entitled to collect royalties from public performances of your musical compositions (for instance, the royalties that you are entitled to receive when the songs you wrote are played on the radio). ASCAP, BMI and SESAC take care of this kind of licensing, collect fees from them and pay them to you. They all cover the same copyright, so you only need to affiliate with one. Check out their websites and see which might be best for you.  Register with SoundExchange If you performed on and/or own the masters of a sound recording, you can collect royalties from anyone who streams that track digitally (webcasters, satellite or Internet radio, etc). SoundExchange is the only organization designated by the US government to collect and distribute these royalties, so register now to claim your money. It’s totally free.  Arrange for Distribution Set up an account for digital distribution with an aggregator like IODA, INgrooves, TuneCore, The Orchard or similar companies which allow you to make your music available to the public for digital downloading at popular sites like iTunes,Amazon and others. Be sure to properly enter all metadata accurately during this process since it will propagate everywhere after that. Understand the obligations, splits and commitments you make by entering into an agreement so that you know how it may limit other opportunities.  Embed metadata about each track into each digital file. If a music service opens your file or pops in your CD, and sees ‘Track 1’ and ‘Artist Unknown,’ you could miss out on royalties. While services and webcasters are supposed to report all the tracks they play, they’re busy, and you need to make it as easy as possible. Many millions of dollars have been earmarked for “promo only,” “self-released” and “artist unknown.” Include, at the very least, the artist or group name, copyright holder or label name, and track and album titles, and the ISRC number, if available. Most mastering software includes the ability to embed this data, and online services are available.   Buy/register your website address and social network domains  Start your online marketing and fan building by registering and creating your domain names. It’s common practice for vendors to buy up domains in hopes they’ll be able to jack up the price to sell them back to you when you need them, so pin down the names as soon as you can. Also, create your band’s official profiles on the various popular social networking and sharing sites such as MySpace, Facebook,Twitter, iLike and YouTube.  Check out organizations and associations which may benefit you  There are lots of groups out there doing great things for musicians. Not all of them will be right for you, but a few of them may be. Consider unions like the American Federation of Musicians and the American Federation of Television and Radio Artists, which represent a wide variety of musicians and performers, at all stages in their careers. Check out what groups like The Recording Academy and musicFIRSTare doing to protect your work. There are also payment funds, including the Alliance of Artists and Recording Companies and the AFM & AFTRA Intellectual Property Rights Distribution Fund, which may have funds to offer for certain kinds of work you’ve done. Many regional and local organizations are also available, and many of these groups offer member benefits and discounts on services you may use. Educate yourself about all the associations which may be open to you, and find out what choices can help you advance your career.   Build your web presence Use your site and social network profiles to sell merchandise, display a photo gallery, and dispense news updates and tour events. Keep the information fresh and interesting. Cross-link and expand your social network communications to drive fans to your website. Consider periodic email or other mass-blasts to keep your audience informed. Be authentic and consistent.  Get health and equipment insurance You want to be able to rock on for years to come, so don’t take any risks. When you’re on the road or at gigs, equipment can disappear, so find affordable but adequate insurance. In addition to private companies, some labor unions and organizations, offer health plans, but do your research to find the right plan for you. Check out the Health Insurance Navigation Tool (HINT) program—a good place to start looking, and get some free advice.  Build your team and assign responsibilities (merchandising, bookings, social media, accounting, licensing, publicity, email management, etc.) Build your business by having the right helpers in place. Assign those tasks to the person or group best suited to them. Many online enhancements or replacements for hired help are available (SonicBids, CDBaby, TopSpin,ReverbNation, Rumblefish, FanBridge, Nimbit and others) which allow artists to take on many of these tasks themselves.  Create great music!  There is no substitute for creative productivity. This is what artists do. So create often and let your audience know what you’ve been up to. It’ll take a lot of work, but before you know it, you could be living the dream.  ----------------------------------- Follow me on Twitter for daily news and updates on production and the music business. Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

SoundExchange Money

A few weeks ago, Billboard magazine reported on the dismal returns that artists were making from digital royalties, and we even followed up with a post about it here. Now SoundExchange, whom we've also talked about a couple of days ago, has responded with some numbers that they claim are reality, and they're quite a bit different from what was previously reported.

Here are the numbers:

• a total of 1,602 artists were paid more than $2,000 in 2009 
• 500 of those received more than $9,000
• more than 60 earned more than $50,000 
• 4 cleared $100,000

The amounts are only for royalties paid on recordings played on non-interactive digital streams in the US (Internet radio and satellite) and don't include publishing.

As I said the other day, there may be some money waiting for you, but you've got to register to get it. Do it at SoundExchange.com.

SoundExchange is currently at SXSW attempting to match an estimated $1 million in royalties to performing artists that are not yet registered.

How Bad Metadata Costs Artists $$$

If you're an artist and don't already know about SoundExchange, then you should. The company was appointed by the US Copyright Office to collect royalties for artists and performers who's music is played on any digital service, either online or satellite.

That means if you're an artist who didn't write the song you're performing, you can still get paid for your hard work. Performance royalties have been long overdue in the US (Europe has paid them for a while now), and the battle still rages regarding royalties from radio broadcasts, which will hopefully be settled this year sometime. But for anything digital, it's a done deal.

Don't confuse artist performance royalties with songwriters performance royalties; they're not the same. Songwriters have always been paid if they retained their rights, but until now, performers were never paid a dime. It's hard to believe that a group like the Righteous Brothers can have the most played song ever on the radio with "You've Lost That Lovin' Feeling" and never make a penny out of it, but that's the way it's always worked. At least on the digital side, this has now changed and performers can expect to see at least a little cash.

But a couple of roadblocks stand in the way of a payday. First of all, you've got to sign up with SoundExchange so they know that you exist and where to send the money to. But the second one is the big one; the metadata of a song hasn't been sufficiently logged.

Metadata is data about the data, so in the case of a digital song, it's everything about the song, from the artist to the label to the musicians to the year of release. Surprisingly, the copyright owners sometimes don't include that information. As a result, there's money that sits in an escrow account at SoundExchange for "Beethoven" (who never recorded anything) instead of the orchestra that recorded one of his pieces, or "Various Artists", or "Artist Unknown." You can pay money to someone if you don't know who they're supposed to credit. Gradually, the word is getting out that carefully including a song's metadata gets everyone paid, so expect to see the problem to lessen a bit as the word gets out. Just remember that if you're self-releasing songs online, be crystal clear about all the metadata.

If you're an artist, register with SoundExchange. It doesn't cost anything and you might be surprised to find out that you have some money coming. And treat your metadata seriously.

Check out this article about SoundExchange and monies owed by Laura Williams.