SoundExchange, CD Baby want to pay $1 million in royalties


SoundExchange, the non-profit performance rights organization authorized to collect royalties for the digital performance of sound recordings, and CD Baby, an online music store and digital distributor, announced an initiative to notify hundreds of recording artists owed back royalties totaling more than $1 million. To encourage artists and labels to claim these royalties, the groups matched SoundExchange’s list of yet-unregistered artists and labels to CD Baby’s database of members. The exercise identified 12,806 recording artists and 1,574 labels with unclaimed funds at SoundExchange.

In mid-September, SoundExchange announced there were some 6,126 AFTRA member artists owed a cumulative $3.6 million in back royalties which have been collected on their behalf by SoundExchange for digital streaming of their recordings.

This week, CD Baby began sending emails to all matched artists and labels, explaining the royalties and encouraging them to register with SoundExchange to get paid. The match, which the organizations want to make an annual event.

Federal copyright law allows music services that digitally stream sound recordings under the government’s blanket license, provided they pay royalties and provide playlists to SoundExchange. SoundExchange says many artists and labels don’t know about the law that entitles them to royalties, and as a result to don’t register to collect the payments from SoundExchange.

“The reason that CD Baby exists is to make it easy for independent artists to get paid for their hard work,” said Brian Felsen President of CD Baby. “That’s why we’re excited to help our artists claim their royalties through SoundExchange. Nothing makes us happier than to see new revenue streams flowing to independent musicians.”

Meanwhile, SoundExchange announced 10/25 it has distributed nearly $88 million to more than 18,300 payees designated by recording artists and labels during Q3. The quarterly distribution, SoundExchange’s largest to date, includes royalties paid by Internet radio, satellite radio and cable TV music-only channels. Total distributions made by SoundExchange in 2010 were $249.2 million, up from $155.5 million in 2009.

RBR-TVBR observation: After a certain amount of time SoundExchange actually gets to keep any money that it doesn’t distribute. The fees have to be paid regardless of whether the artist is registered—at least if the digital distributor is in the US. If an artist distributes songs themselves, then no fees have to be paid.