BY BRIAN TARQUIN WE ALL WANNA GET PAID, RIGHT? WELL, THANKS TO NEW TECHNOLOGIES, today’s artists can benefit from royalty streams that did not exist a short while ago. These royalties—from satellite radio and cable TV music channels, for example—are fantastic alternative ways that artists and rights holders can see income from the new digital marketplaces. In order to efficiently collect and distribute both digital and broadcast performance royalties to featured artists, musicians and copyright holders, companies like SoundExchange, Sena and Live Television/Videotape Supplemental Markets Fund have appeared. Many artists, however, are still not aware that money could be sitting in an account, waiting to be claimed. In the following article, I’ll show, through my own experiences, how to take action to get the money that is rightfully yours. 40 November 2013 musicconnection.com
SoundExchange One of the most prominent organizations specializing in collecting digital revenue royalties is the Washington, DC-based SoundExchange, which is a non-profit performance rights organization. What does SoundExchange actually do for you? As the organization’s Marie Farrar Knowles explains, “SoundExchange represents the entire recorded music industry, including recording artists and record companies large and small. The licenses we administer enable digital music services to focus on what they do best, while ensuring that recording artists and record labels are compensated for their work.” Okay, so what is the organization's collection process? In other words, from whom does SoundExchange collect those royalties that are due to you? SoundExchange collects statutory royalties from satellite radio (such as SiriusXM), Internet radio, cable TV music channels and other outlets that stream music recordings. The organization came to prominence when a special group of copyright judges, called the Copyright Royalty Board, were appointed by the US Library of Congress to determine rates and terms for the digital performance of sound recordings. They basically named SoundExchange the sole company in the US to collect and distribute digital performance royalties on behalf of master right owners, such as record companies and recording artists. SoundExchange also represents all independent artists who control their own masters. The current rates will be in effect through Dec. 31, 2017. “Today,” Knowles explains, “there are 2,000-plus digital radio services that leverage the license we administer to access any commercially available work. While this list is too long to share in this article, a few examples are services like iHeart Radio, Spotify Radio (mobile service), Pandora and SiriusXM.” How considerable are the royalties? SoundExchange announced on its news page that in 2012 its total distribution to artists was $462 million, which was a historical moment for the organization. These royalties continue to increase for everyone; I’ve seen my own SoundExchange royalties grow dramatically over the years. This royalty money, however, will not come to you automatically. In order to get the most accurate royalties, you need to provide SoundExchange with what is known as a “metadata sheet.” Though it is time consuming on your part, it is extremely rewarding in the long run. Providing this key information has become a standard in the digital world. Either you or someone you hire will have to list all of your releases, as well as a comprehensive breakdown of each song’s writers, publishers, track description and album title, etc. (It's a simple Excel document.) 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 “Sound- Exchange has put more than $1.5 billion into music creators’ pockets.” —Marie Farrar Knowles, Sound- Exchange 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. Live Television Videotape Supplemental Markets Fund (LTVSMF) Another great royalty source that I’ve seen grow substantially in the 21st Century is LTVSMF. It collects and distributes residuals to musicians who have worked on live television/video productions. Shari Hoffman, Fund Manager of the LTVSMF, explains their exact role. “We’re a non-profit organization that works in association with the American Federation of Musicians (AFM) to ensure the collection, processing and distribution of residuals to qualifying musicians who have performed music used on live television programs, such as Saturday Night Live, The Late Show with David Letterman, The Tonight Show with Jay Leno, various award shows (GRAMMYS, Academy Awards, CMA Awards, etc.), live reality programs (American Idol, America’s Got Talent, The Voice, etc.), and the soap operas (which in the olden days were live broadcasts).” Hoffman says the basic contract provisions that generate revenue to the Fund are the result of a collective bargaining agreement negotiated between the AFM and the major television networks and television producers in the late 1980s and early 1990s. The actual responsibility to distribute these monies was transferred to the Film Musicians Secondary Markets Fund (FMSMF) in the late 1990s with an official “sub-fund” established to distribute monies collected for musicians working on these programs circa 2002, with a full-blown division formed in 2010 known today as the Live Television Videotape Supplemental Markets Fund. “The provision,” says Hoffman, “is that you had to have worked on at least one original AFM scoring session for a specific live television production. A live television/video production must generate some income or revenue as a result of exhibition in a supplemental market to trigger an obligation on the part of the producer/production company to contribute to the Fund.” How Important Is This For The Musician? Can a musician expect to be paid well beyond the original airdate of a program? Hoffman asserts that many musicians receive payments far in excess of their original session payments for a program, provided that they have worked under the AFM Television Videotape Agreement. “The payments,” she says, “can often continue for many years beyond the time when these programs were first produced, providing compensation for musicians and their heirs (beneficiaries) long after a musician has ceased being actively involved in recording and performing. Those who work non-union primarily get compensated only for their original session performance, and nothing else. Or, in other words, they work for a buyout.” For example, I get a check each year from the Live Television/ November 2013 musicconnection.com 41
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