SoundExchange: Don’t Let Unclaimed Royalties Fester

Imagine in this economy a recording artist or independent label turning down an offer of royalties, but that’s exactly what happens daily when SoundExchange notifies them of royalties they’ve earned from satellite or internet radio streaming. Whether because SoundExchange is relatively young, or because musicians assume they’re not entitled to get paid for these plays, SoundExchange has a lot of unclaimed royalties which belongs to musicians, and they’re anxious to get it to the people who earned it. Some of it may be yours, and all you have to do is claim it, and tell them where to send the check.

It’s tempting to think that these royalties must be owed to big names, or major-label artists. Or it must be so little that no one’s bothered to claim it yet. On the contrary – SoundExchange is currently holding nearly $40 million in unclaimed royalties, for artists and rights owners of every size and genre. SoundExchange is seeking marquee artists like She & Him, who haven’t registered for their royalties, and hundreds of smaller artists who may not even know these royalties exist. At industry events all over the country, at festivals, online, over the phones, and in publications like this one, SoundExchange staff are educating artists about how they can get paid for these plays.

Here’s how it works: when the music you recorded is played on satellite radio, Internet radio or webcasts, on digital cable or satellite TV services, these entities are required to pay two royalties for the use of that track. They pay a royalty to the songwriter/publisher (through ASCAP, BMI or SESAC), and also to the performer/copyright holder (through SoundExchange).

Before 1995, artists and master rights owners weren’t entitled to royalties for the use of their recordings. The traditional performance rights organizations (PROs), ASCAP, BMI, and SESAC have a much longer history, paying the songwriters and publishers of the underlying written work, but SoundExchange is the only organization authorized to pay the artist and owner of the sound recording. So when you hear the iconic version of “Respect” on Internet radio, ASCAP is paying the estate of Otis Redding, who wrote the song, and SoundExchange pays Aretha Franklin, who made the song famous. If you hear Otis Redding’s original, though, he gets compensated for both the underlying composition, and also for the sound recording. In short, if you perform on recordings, you should be signed up with SoundExchange in addition to a songwriting PRO. Unlike those traditional PROs, SoundExchange collects not just for their members, but for every artist played on digital services. That means if you register today, you can claim back royalties all the way back to 1996 – SoundExchange has been holding your money for you.

So, now that you know these royalties exist, and that you can claim them for free (yes, registration and membership with SoundExchange are always 100 percent free), the next question is, how can you make sure you’re getting the maximum amount of royalties you’re entitled to claim? First, register with SoundExchange and keep your registration up to date (you’ll need to let us know if you move). Secondly, make sure that every penny that comes into SoundExchange for the use of your work has your name on it. That means embedding quality metadata on your tracks, and checking up on your digital distributor to make sure they’re doing the same. SoundExchange has been fighting against an industry-wide tide of shoddy data, and now has to deal with hundreds of thousands of dollars owed to “Various Artists,” “Label unknown,” and “Self-released.” When the streaming services which use your work submit reports to SoundExchange, they generally won’t be doing any additional research on your track – they’ll report the information you give them. So they open your file or pop in your disc, and the display says “Track 1” by “Unknown Artist,” it’s unlikely the royalty which results from that play will ever make it to you. Make sure to include, at the very least, the artist name, track title, album title, and copyright holder (whether it’s you or a label) on every track you send out. Don’t abbreviate, and check your spelling – twice. Don’t let misspellings or misrouting keep you from the money that’s yours. (For lots more things you can do to help build and strengthen your career, check out SoundExchange’s New Artist Checklist).

Before I joined SoundExchange, I was a singer-songwriter myself, and spent a large part of my career managing singer-songwriters. I know how tough it can be to make a living, and I don’t want to see any artist miss out on these revenues. Singer-songwriters have always relied upon a variety of revenue streams to make their living: merchandise, live performances, CD sales, publishing royalties and “mailbox” money (checks that show up in your mailbox when your songs or performances have been publicly performed). Make sure you’re registered for all streams to which you’re entitled. Don’t leave money on the table and make sure that each of these pennies winds up in your pocket.

John L. Simson, Executive Director of SoundExchange, has been involved in the music industry since his 1971 signing with Perception Records as a singer/songwriter. His career has included a ten-year partnership in Studio One Artists, managing country superstar Mary Chapin Carpenter (1988-1995), among many others. John has practiced entertainment law since 1980, and was counsel to the firm of Berliner, Corcoran & Rowe from 1990 through 1999, before joining SoundExchange in 2000. John was one of the founders of the Washington Area Music Association and its first President (1985-1990), as well as serving, at various times, as President of the Washington, D.C. chapter of NARAS (Recording Academy), on the Recording Academy Board of Governors in 1997 for the Washington, D.C. chapter, and as a National Trustee of the Academy (1997-2000). John is currently an adjunct professor of Entertainment Law at American University’s Washington College of Law, and taught Entertainment Law for two semesters at Catholic University’s Columbus School of Law, and has lectured frequently on entertainment law and business.