What Is SoundExchange?

From SoundExchange.com

"SoundExchangeŽ, Inc. is a dynamic, 501(c)(6) nonprofit performance rights organization embodying hundreds of recording companies and thousands of artists united in receiving fair compensation for the licensing of their music in the new and ever-expanding digital world. Modern technology makes all of our lives a little bit simpler and SoundExchange takes full advantage of its accuracy and efficiency to license, collect and distribute public performance revenues for sound recording copyright owners (SRCOs) and artists for noninteractive digital transmissions on cable, satellite and webcast services.

"Prior to 1995, SRCOs in the United States did not have a performance right. This meant that, unlike their counterparts in most of Europe and other nations around the world, recording companies and artists were not entitled to receive payment for the public performance of their works. Users of music, the digital music service providers, freely performed these works at will, without a dime being paid to the rightful owners of those recordings or the featured artists who performed the songs - the recordings which created the backbone of their business.

"The Digital Performance in Sound Recordings Act of 1995 and the Digital Millennium Copyright Act of 1998 changed that by granting a performance right in sound recordings. As a result, copyright law now requires that users of music pay the copyright owner of the sound recording for the public performance of that music via certain digital transmissions. The U.S. Copyright Office recognized the benefits of SoundExchange's administration of these royalties, and so has designated SoundExchange as the administrative entity for subscription services' statutory license fees...

"Members of SoundExchange include major and independent record companies from Sony BMG Music Entertainment and Warner Music Group to over 1,000 independents like Alligator Records, Beggars Group, Benson Music Group, Koch International Sonido, Inc., The Mountain Apple Company and Tommy Boy Entertainment. These companies understand the economic efficiencies and benefits of sharing the costs associated with the administration of statutory licenses...

"In summary, SoundExchange handles the following:

• collects performance royalties from the statutory licensees;
• collects and processes all data associated with the performance of the sound recordings;
• allocates royalties for the performance of the sound recording based on all of the data collected and processed;
• makes distribution of the featured artist's share directly to the artist;
• makes distribution of the SRCO's share directly to the copyright owner;
• makes distribution of the nonfeatured artist's share to AFTRA and AFM's Intellectual Property Rights Distribution Fund; and
• provides detailed reports summarizing the titles, featured artists and royalty amounts for each of the sound recordings performed by the statutory licensees."

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