Friday, June 29, 2007

SoundExchange represents less than 10% of artists

John Simson quoted in the Hartford Courant: We [SoundExchanve] represent over 20,000 performers and over 3,000 independent labels and the four major labels.

Johnny Floater over at Live365 tells me that there are 250,000+ artists that get airplay on Live365. On SomaFM, we've played 8000 different artists this year, and we have only 11 different channels. Because SoundExchange doesn't publish a list of their member artists and labels, we can't compare our playlists to see how much of the music we play is by SoundExchange member rightsholders. But I bet we play a lot of stuff by artists and labels that aren't affiliated with SX.

There are also over 8200 artists on SoundExchange's "unpaid artists list"; artists that SoundExchange has collected statutory royalties for but hasn't distributed because you have to join SoundExchange before you can get paid. And if these people don't join within a certain point of time, they lose their royalties and SoundExchange gets to keep that money.

Bottom line: this is why we can't make a deal with SoundExchange. A deal with SoundExchange would only cover their members, and that's less than 10% of the artists out there. It would be fine if we were playing Top 40 or Big 4 label releases, those guys are all covered. But we play "long tail" stuff, and much of it is likely not going to be by SoundExchange members.

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Blogger Nufuhsus said...

Let us hope that the majority (if nnot all) of the artists on your play list are not affiliated with SX. And how stupid is it that SX collects money for artists who are not a member yet? That just doesn't make sence to me. These bastardos are complaining that "Boo-who. Our artists don't get enough." yet they [SX] is sitting on collected unpaid cash for artist who did not join the dark side of the force fast enough. Something fishy this way comes.

June 29, 2007 6:16 AM  
Anonymous dhuman said...

Hi Rusty - I want to correct some statements you've made in this most recent post, and add a few comments related to past posts of yours. I hold the small independent label seat on the Soundexchange board, have worked almost my entire career with independents and artists (and, promotionally, with many internet webcasters), and I'm not affiliated with the RIAA.

First off, SoundExchange is required by law to collect royalties for all artists with the exception of those artists (and labels) that direct license their material to a webcaster. An artist does not have to be a member of SoundExchange in order to receive royalties from SoundExchange, and SoundExchange does not withhold royalties from anyone entitled to royalties who they can find. SoundExchange has an extensive outreach program to find artists and labels who have not notified SoundExchange where to send checks, I can say that I've directly contacted as many artists on our unpaid list as I personally know in addition to working to find other artists I don't.

The only artists entitled to royalties who are not receiving them are those whom SoundExchange has been unable to find or who have not provided basic paperwork to allow the payments to be paid. So no one has to "join" SoundExchange to get paid. There's no conspiracy to keep this money out of the hands of anyone (especially artists, who Soundexchange pays DIRECTLY, not through labels) - it's clearly in SX's interest to distribute this money, as a poor distribution does not help Soundexchange or rights holders.

Under the law, webcasters must pay royalties on all music they play, you know this. As stated above, the only exception would be direct licensing deals. Direct licensing deals can become cumbersome and expensive (I suspect you would agree), which is why Congress granted webcasters the privilege of being able to play virtually any sound recording they choose so long as they comply with reporting requirements and pay the prevailing royalty rate The only way for SoundExchange to determine who is actually being played, how much and when, is for webcasters to comply with reporting requirements set by law. More than half the webcasters that participated in the Day of Silence, for example, as published in a list on SaveNetRadio, are non-compliant.

As for making a deal with SoundExchange, SoundExchange has offered a deal to representatives of small webcasters, which I am sure you are aware of, with the hope that the deal could be done in such a way to apply to all artists, copyright holders, and webcasters.

June 29, 2007 9:00 AM  
Blogger Rusty Hodge said...


I know that SX is legally required to collect royalties for all artists. I didn't meant to get distracted over the distribution of royalties; I was trying to state that there are lots of artists who are getting airplay now who aren't SoundExchange members. (I've actually been defensive of SoundExchange on this point: I know how hard it is to get the artists to fill out the bit of paperwork they need to get paid; especially when it comes to bands that are broken up, etc. But that's another topic.)

My point was simply trying to calculate how many artists have joined SoundExchange.

Being a SoundExchange member is the key point when we're talking about deals made with SoundExchange. The problem is that SoundExchange is NOT authorized by the DMCA to make deals on behalf of all artists.

The bottom line, and what I'm pointing out: SoundExchange can only make deals on behalf of its members. And since a list of members is no published, we don't know how many of the artists we play are SoundExchange members.

June 29, 2007 10:49 AM  
Blogger Fred said...


DHUMAN (aka Dick Huey) is also spreading disinformation in regard to who gets paid by SoundExchange when he says:

"The only artists entitled to royalties who are not receiving them are those whom SoundExchange has been unable to find or who have not provided basic paperwork to allow the payments to be paid."

John Simson has admitted (in direct contradiction to the SoundExchange FAQ), that they are using sampling to allocate royalties to artists. Unless the artist appears in the sample, he or she isn't getting paid anything, despite what Mr. Huey says.

Once again, we're supposed to believe what SoundExchange says, rather than believe what they actually do.

July 1, 2007 12:17 PM  

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