It seems to be a constant battle for songwriters to economically receive what is rightfully theirs. First, fighting with labels over rights and royalties, then finding a publisher (big enough) to collect those royalties, now going after digital service providers to payout those royalties, and the government for providing an obnoxiously low rate for reproductions rights and an outdated statute that can’t seem to keep up with the technological age. Yes, it has been a rough one as these factors are often working together in perpetuating this curse more commonly known as the compulsory license.
A compulsory license for sound recordings was created by Section 115 of the Copyright Act and allows anyone to reproduce and distribute a composition that has been released to the public either by digital or physical means with the copyright owners permission. (sounds good). Most of the time an artist records the composition, the label sends the created recording to its distributor and the distributor sends it to the digital service providers or DSPs (Spotify, Amazon, Google, iHeart, you name it) who in exchange receive dollars through subscriptions, ads and downloads. It seems like DSPs should be giving songwriters a call right? (Because they are reproducing the composition and saving it to their platforms to be streamed or downloaded.) Shockingly, they don’t call. In fact, if you are an independent songwriter (not represented by a major publisher), it is unlikely that you are paid mechanical royalties from any of the DSPs. Why? Because of the compulsory license and these evil excel spreadsheets called “author unknown” NOIs.
If you want a compulsory license, Section 115(a)(2)(b) of the Copyright Act requires you to serve the copyright owner of the composition with a notice of intention (or an NOI). However, IF there is no registration or public record filed with the Copyright Office of your ownership of that composition with an address where the licensee can serve you the NOI then you are considered an “author unknown”! (insert evil laugh). Basically, did you file and pay the Copyright Office to register your copyright that you already own (even though under no law are you required to register your copyright to validate your ownership) for the purpose of getting paid a royalty that, by statute, you are rightfully entitled to? That’s some hardcore bs, right? In fact, instead we are going to give DSPs and whoever else, an out to not pay you. Just submit an “unknown author” NOI to the Copyright Office, which is basically an excel spreadsheet with the title of the song, the DSP info, and unavailable written across the columns for any type of songwriter info. It doesn’t matter if the song is registered with a PRO, if you submitted the metadata to the label to give to the DSP, it probably doesn’t even matter if you call Spotify up and say “hey I’m your missing songwriter!” Nope, after a copyright search you are done. Also to add more bad news, if you file for your copyright tomorrow Spotify, Google and Amazon are not required to back pay on any of those royalties as long as they submitted an NOI to the Copyright Office.
Although a bummer, we will end on a positive note that this curse has not gone unnoticed and some are choosing to do their part to help. Insert Sound Exchange NOI database! (Superhero sound!) A simple system that organized the unknown author NOIs submitted to the Copyright Office so that you can easily discover who is not paying you and for which song. Although its not exactly putting the money you are owed into your pocket, it is getting us a step closer considering the Copyright Office database for NOIs is next to impossible to navigate. It consists of huge excel spreadsheets submitted by DSPs that often are not even downloadable without a zip compressor. If you are able to download the excel sheets, you will see DSPs list hundreds sometimes thousands of songs in no particular order that are submitted daily! It is an absurd waste of time. So thank you Sound Exchange for making it easier for the songwriters out there. I encourage all songwriters to sign up (its free) and search for any NOIs here. We at L4M are going to do our best to keep on this fight and find best practices to get these royalties paid out for our clients. We will keep you posted, but feel free to comment with suggestions and success stories as we want to keep songwriters informed on how to avoid those unknown author NOIs!
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.