"SoundExchange" Information for the Music Composer and Songwriter

Join a PRO if you're a songwriter; this should have been done yesterday!  But also join SoundExchange.  SoundExchange, just like the PRO's (BMI, ASCAP, and SESAC), collects royalties but a few things make "SE" different.  SE is a unique organization. 

First, SoundExchange doesn't collect royalties from terrestrial radio stations. They only collect from newer media sources like satellite radio and internet music streaming services.  SE's job is to collect the performance royalties for the master recording owners.  Remember that a song produces 2 copyrights: one is the actual copyright that happens when it is written and another one when it is recorded.  This latter is known as the "master" copyright. 

SoundExchange collects royalties for the copyright holders of the "master" sound recordings.  The composer is not included here unless he or she is also the performer and/or record label involved.   Therefore to understand the concept, SE collects for usually the label and the performing artists involved.  The PRO's like ASCAP, SESAC, and BMI act on behalf of song writers and publishers and collect copyright royalties for the writers. 

Here is an example given by Garrick Chow on a curated songwriter course published at Lynda.com:

"For example, say a series satellite radio station plays the White Stripes' version of Jolene. SoundExchange will collect and distribute royalties for Meg White and Jack White, the performers, as well as the owner of the master recordings be it the White Stripes or their record label. BMI, meanwhile, will collect royalties for the song writer, Dolly Parton and her publisher for the performance of her song copyright."

The example continues stating that:

"in the case that any other musicians played on the recording, they would also be paid performance royalties from SoundExchange. While the payments for song writing and publishing through BMI, ASCAP and CSAC depend largely on the split sheets, SoundExchange has a fairly rigid royalty breakdown. From the Sound Exchange website, under the law, 45% of performance royalties are paid directly to featured artists on the recording and 5% are paid to a fund for non-featured artists, typically session musicians and background singers. The other 50% of the performance royalties are paid to the owner of the sound recording, meaning the owner of the master recording, which can also be a record label or an artist who owns their own masters."

So, featured artists, and master copyright holders are the only benefited from SE.  The composers and writers will still need to use a PRO in order to track and collect their royalties onsite and EVEN online as well from online radio stations.  It is quite easy and FREE to sign up with SE. You can sign up with SoundExchange at register.soundexchange.com.  Happy songwriting and performing!