SOUND EXCHANGE: THE MYSTERY REVEALED

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This Mysterious Castle is said to house all uncollected Sound Exchange Royalties.  Enter at your own Risk!

We here at L4M often make reference to a somewhat mysterious organization known as: Sound Exchange.  However, many people are still confused as to exactly what Sound Exchange does.  We constantly receive questions regarding Sound Exchange so we thought we would give a little primer here.

Prior to 1995 artists and labels did not receive a performance royalty for sound recordings.  On L4M we have stressed the importance of receiving your publishing performance royalties from ASCAP, BMI and SESAC.  However, these organizations only deal with the underlying compositions.  Since 1995 artists and labels, in limited circumstances, are now able to receive royalties for the actual sound recordings.   This has been the norm in most of the rest of the world for a long while now.

The main areas where royalties are available for artists and labels are: 1. satellite radio (think Sirius), 2. internet streaming radio (think Pandora), and 3. cable music only channels (music with no video, think satellite radio delivered by your cable or satellite provider).  Unlike the underlying composition where you have a choice of three performance rights organizations, Sound Exchange is the only organization for your sound recording performance royalties.

So, if a song is played on terrestrial radio only the writers and publishers are entitled to a performance royalty.  If the same song is played on one of the above mentioned avenues, the writer, publisher and now, artist and label will receive a royalty. 

If you are an independent artist that owns your own master recordings it is important that you sign up as both an artist and as a sound recording copyright owner.  This is important because Sound Exchange divides the money as follows: 50% to the copyright owner (usually a label), 45% to the featured artist and 5% to background musicians.  As an independent artist where every dollar counts it is imperative to sign up correctly.  

For some reason there are a lot of artists and labels which are owed money that have not yet signed up with Sound Exchange.  There is no cost to sign up and royalties are paid quarterly.  If you think you may be one of these artists or labels you can search here and check: http://www.soundexchange.com/performer-owner/does-sx-have-money-for-you

We hope this helps clarify what Sound Exchange does.  Now, go check if you are owed money and sign up.  Good luck. 

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