SoundExchange, the collections group in charge of collecting and distributing money to musicians from a variety of different services (radio, satellite, webcasting, etc.), is technically a “spinoff” of the RIAA, but as many people who have dealt with SoundExchange will tell you, it’s still tied at the hip with the RIAA. In fact, I was recently talking with someone who told the story of “negotiating” with SoundExchange, and was surprised to discover at the meeting that there was an RIAA representative who did all the talking. The SoundExchange guy stayed quiet.
Why the government has granted exclusive rights to this industry group to collect and distribute money to musicians is troubling enough. But it’s made worse by the fact that if SoundExchange “can’t find” musicians to give the money to, it gets to keep the money. Thus, for years there’s been a struggle over the fact that SoundExchange seems to have incredible trouble finding musicians — including some huge rock stars, and that means that SoundExchange, officially a non-profit, is holding on to a ton of cash (currently somewhere around $200 million). There are also questions about how SoundExchange has violated the law that created it, in order to lobby for even more rights to collect money from radio stations.
Based on all this, we’ve always had trouble taking SoundExchange seriously, so consider us skeptical now that the organization claims that it’s going to be much more open and communicative and has launched a new website to help be more open. Only problem? The big list of artists that SoundExchange can’t find has gone missing. In the link above to P2Pnet, entertainment lawyer Fred Wilhelms goes through a variety of questions that SoundExchange hasn’t answered, and he asks what happened to that list (while also noting how the list almost never seemed to change):
The new website is a lot cleaner and easier to use, but there’s one thing the old site had that the new site doesn’t; the unregistered artist list.
As of now, there’s no way for anyone outside the organization to assist in the effort to locate artists that SoundExchange has been unable to register since 2006. Despite your glowing reports on how many artists SoundExchange has been finding, you and I both know that, before the list disappeared, no names had been removed from the published list in over seven months, and only a couple dozen in the last 18 months. I’ll take your subsequent assertion that the full and updated list will appear on the website at face value. Is there any schedule for that? Please don’t tell me “soon.” That’s a devalued coin in the SoundExchange treasury.
Wilhelms also notes that for all of SoundExchange’s claims to be “open” it’s also conveniently not explaining how it determines who gets paid:
There’s another thing that is missing from the new website which was repeatedly promised to me by John Simson and Neeta Ragoowansi; an explanation of how SoundExchange uses samples to determine which artists get what share of the royalty revenue when complete census data is not available. I was told two years ago that this information would be provided on the website, but I find that, not only is sampling not mentioned, SoundExchange continues to say things like “Get Paid When You Get Played.” That’s the header on the Featured Registered Artist page.
I have clients who have gotten a lot of play, but haven’t gotten paid, and they’ve been told it was because their plays were not in the sample playlists provided by the webcasters who play them. Perhaps you can explain why SoundExchange has decided not to mention sampling on the website. I come back to related problems later on in this letter, but I would like to know if SoundExchange is ever going to explain how it samples, or even that it relies on sampling at all.
This is a big issue. As we’ve seen over and over again, many of these collections societies use sampling and counting methods that greatly overvalue big stars (who need the money less) at the expense of up-and-coming artists. It’s like the poor get to pay the rich.
From there, Wilhelm’s letter goes on in great detail responding to claims from SoundExchange and debunking them one by one. SoundExchange claims that they’re now going to be much more open and respond to these types of questions. We’ll be interested to see what they have to say.
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