The Music Biz: What is "Sound Exchange" and why Artists need it.
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Category: Music

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Shane German, Artist Manager For SoundExchange

By Paige Crutcher on September 29th, 2009....

Shane German is artist manager for SoundExchange, an independent, nonprofit performance rights organization that is designated by the U.S. Copyright Office to collect and distribute digital performance royalties. A representative from the SoundExchange, one of the sponsors of Next Big Nashville, is scheduled to appear on a conference panel. The group will also have a NBN booth, where artists can sign up for the service.

What does SoundExchange do?

SoundExchange collects royalties for recording artists and copyright holders when their music is played on digital services or the Internet.  Day to day, our executive staff members appear on panels and educate the industry about SoundExchange and performance rights, and keep our whole organization running.

Our distribution operations staff processes millions of performances a year, and our membership and royalty departments ensure all artists and rights holders receive the most accurate payments possible. Our licensing professionals strive to make getting a performance license an uncomplicated task for service providers. I and my colleagues in our outreach and external affairs department, are constantly spreading the word to unregistered artists and rights holders, and getting the word out about performance rights in the music community.

Why was SoundExchange created?

In 1998, recording artists and copyright holders were granted their first-ever rights to compensation when their track is played on SIRIUS-XM, by webcasters, or digitally transmitted a bunch of other ways.  The Copyright Royalty Board, which is appointed by The U.S. Library of Congress, said SoundExchange was the best organization to take care of collecting those royalties and making sure they get to artists and rights holders. We’re big believers in the rights of people to be compensated for their creative work, and we’ve been working hard to ensure that they are.

Who does SoundExchange collect royalties on behalf of?

SoundExchange collects royalties for the people who create and own sound recordings – all kinds of music, comedy, spoken word, and more. Of the royalties we collect, half goes to recording artists, and half go to copyright holders, which can be a label, or with independent artists, might be the artist again. Right now, SoundExchange represents 5,000 registered record labels and over 42,000 registered artists. We’ve got signed and unsigned recording artists; small, medium and large independent record companies; and major label groups and artist-owned labels.

Do you feel the word is out –- that artists know who you are and the service you provide?

The music industry and the recording community have been really receptive to what we’re doing. They understand that this is a fundamental issue of fairness – of paying people for the work they do. In a lot of ways, the community has spread the word, and when artists get paid for the first time, they tell their friends, and our reputation spreads out organically. But we’re a young organization, and the performance right is still only about ten years old. A lot of people don’t know that this royalty exists, or just haven’t filled out the paperwork we need to pay them properly. We’re still putting a lot of energy into putting the word out about what we do and how to get registered.

Is SoundExchange the only organization that collects royalties on the behalf of artists and sound recording copyright owners?

Yes and no. SoundExchange is the only U.S. organization which collects performance royalties – that is, the royalties from a particular recording, rather than the underlying composition. We’re also the only organization which pays featured recording artists, sound recording copyright owners, and independent artists who record and own their masters. Composers, songwriters and publishers are paid through membership with ASCAP, BMI, or SESAC. Recording artists in other countries have their own performance right organizations, but SoundExchange works in partnership to get them paid, too.

Are the artists aware that SoundExchange collects their royalties? How do you notify artists/copyright owners of their royalties?

Getting the word out to artists and rights holders hasn’t always been easy. Some don’t know they’re entitled to these royalties, or just haven’t submitted the forms. Sometimes we contact people again and again, but they don’t register. Maybe it sounds too good to be true – someone calling to give you money. Lots of people aren’t in the industry any more, and we don’t know how to contact them. Others have moved without leaving forwarding addresses, or have passed away without instructions to their heirs. We retain full-time consultants whose job it is to track down artists, and our outreach team is always looking for new ways to contact people.

For big artists, we can sometimes go through lawyers or managers, but most of our registrants are part-time musicians with jobs and families. For them, we’ve been reaching out through social networking sites, email, and phone, and conducting matches with other organizations that may have contact information, like songwriters guilds and online music hosting sites. We’re out there, every day, looking for people to give royalties to. Isn’t that amazing in this economy? We’re out trying to track down people to give them money.

As Manager of Artist and Label Relations, can you tell us a little about your role within SoundExchange?

I wear many hats here.  In addition to membership outreach to artists and record labels who are not registered and do not know they have royalties waiting for them, I also work with foreign performance right societies to identify our members and help them get money from overseas where we have reciprocal agreements.  I speak at and attend numerous music industry conferences and events and lately have been working as a consultant for the musicFIRST Coalition.

I really like to work with the artists we represent and nurture those relationships and get them involved and be an integral part of our growth.  It’s funny, I feel I am just doing my job but am always touched and humbled when I get a Christmas or Thank You card from an artist who appreciates the royalty checks they receive thanks to our efforts.  Some of these artists have never received a royalty and it’s touching to hear their immense gratitude when they get that first check.  I have an autographed photo of Wanda Jackson on my desk that says “Let’s Rock”.  It’s the little things like that that make my job here incredible.

How have you seen SoundExchange evolve?

SoundExchange has grown a lot. In 2002, there were only a few employees, and there weren’t nearly as many webcasters or streaming services as there are now. But as digital music play has exploded, and the Copyright Board has expanded SX’s role in some ways, we’ve been taking on more and more responsibility. We’ve grown up a little, had to take on some more serious IT and accounting strategies to manage the work load. We’ve also been excited to see our registration lists of artists and rights holders grow and grow, and we hope that keeps happening. It’s a great time to be a part of this team. We’re really in it for the right reasons – no one’s at a non-profit for the money – and we believe in the great work that we’re doing for artists and rights holders. SoundExchange is dynamic, and is getting stronger as we grow.

What can we expect from SoundExchange in the future?

Like I said, it’s a growing, energetic organization. We’re going to keep doing everything we can to find artists and rights holders, make sure they know their rights, and make sure they’re getting their royalties. We also want to make the process of paying royalties smooth for services that use music. New technologies are making it easier for them to keep track of every song they play, which means we can distribute royalties more fairly based on the music that’s used.

We’re also actively supporting the efforts of the MusicFIRST Coalition, which is trying to get performance rights extended into broadcast radio. That would level the playing field, since AM and FM stations have been getting away with not paying artists for decades, while their competitors at satellite and web radio recognize that artists and rights holders should be paid when their music is used. So those are the new frontiers, and you can bet SoundExchange will be on the cutting edge.

If you have any further questions, give a yell