Among SoundExchange’s top 2012 priorities are its efforts to overhaul its royalty distribution platform, and the technology and processes from which its core business operates. In addition, SoundExchange is improving data quality reported by services and gathering repertoire data from record labels and recording artists; the result will be a single, authoritative repertoire database that will benefit the entire music industry. SoundExchange has already made headway in our continued artist and label outreach efforts. Together with partner organizations, more than 15,000 new artists and copyright holders were registered in 2011 — totaling 30,000 in the past three years alone!

Considering all these new benchmarks, there is one constant reoccurring theme: The music industry is undergoing a major digital shift, and one that has given artists and record labels new hope for the future of music. And SoundExchange is at the center of this exciting transition.

SoundExchange continues to provide a fast-expanding stream of revenue to the digital music industry. Digital music listening is expanding at a steady clip, with consumers having more free and subscription digital listening options – including consumer devices like phones, computers and even cars. And while according to International Federation of the Phonographic Industry (IFPI) digital revenues increased by eight percent to $5.2 billion worldwide, SoundExchange’s royalty payments to artists and labels have grown 17 percent to an estimated $292 million in 2011. That’s nearly triple from 2008. Overall SoundExchange distributions from inception to date now exceed $900 million.

“SoundExchange is now the number two digital revenue source behind iTunes for many record labels in the U.S. Since our first substantial distribution in 2005 of $20 million, the number of people listening to the type of music services we collect on continues to explode,” said Michael Huppe, president, SoundExchange. The organization’s work is responsible for creating new revenue streams and enabling new business models for the music community. “What excites me most is where we’ll be in the next five years, and the countless ways we can serve the music community. We’re optimistic about the industry’s future, and about the tremendous value SoundExchange promises to deliver in the years to come.”

SoundByte: Where are you from originally?

Dick Huey: I’m from Leland, MI, a very small town in Northern Michigan. Leland has a regular population of about 400, and the high school I went to only had 24 people in my graduating class. The kind of town where you know everyone.

What factors most influenced the type of music you grew up listening to?

With only two or three radio stations in Northern Michigan, we really didn’t have much in the way of new music or independent music to listen to. The only music I knew was “top 40” music. Then I went to the University of Michigan for my undergraduate work and was exposed to something different, musically, for the first time. Being located between Chicago and Detroit, Ann Arbor had a thriving music scene, so I soaked up a lot of different influences. From there, music just became a constant presence in my head — one that would never really go away. That eventually turned into me doing performance. I started playing the guitar at age 23 and played at local clubs with other musicians in Charlotte, NC where I was living at the time. And for a while, I was quite convinced that it was all I ever wanted to do.

How did you decide to pursue a career in the music industry?

Performing was actually the catalyst for what moved me into the music industry. At one of those gigs in North Carolina, I was walking out of a bar after an open mic night and I heard a girl singing. I turned around and walked back in. I couldn’t believe what I was hearing! There was this little blond girl from the Pacific Northwest who was living in Charlotte. Her name was Cheralee Dillon. Several months later, she wound up being my first management client and it started the whole thing off. I was able to sign her to an independent label called Glitterhouse Records in Germany, at the time the Sub Pop distributor for the German market. And that’s what got me interested in both the business side of music and in independent record labels. Shortly after that, my socks were knocked off again by the band June, and another band, Stella, both of whom I signed to Beggars Group — which is how I originally made the connection to that label, and with that connection, my entrée into new media.

Where did you begin your work in the music industry?

I ran new media at the Beggars Group for five years, from 1996 through 2001. At the end of that time, I discussed starting my own business with 4AD Music Publishing. My concept was a business where I’d provide the same services I was offering to the Beggars Group, but to other independent record labels as well. This was well before iTunes and well before digital music had almost any revenue attached to it whatsoever. It was a bold business to move into because there was no income really attached to it either, and so my results were judged not on generating sales but rather on generating ideas. But the head of Beggars Group agreed it was a good idea, and so I started Toolshed.

How did you first come across SoundExchange? When did you first join and what drove you to become a board member?

In 2003, former SoundExchange president John Simson reached out to me because he was looking for information about Matador Records (part of the Beggars Group), where I was still consulting. I asked him a few questions about SoundExchange to familiarize myself with what they were doing and I thought it sounded like the kind of thing labels hire me to look into for them. At the time, I had already been in new media for almost seven years — which was considered “an era,” at that point. John knew this and he suggested that I might be interested in coming onboard and working on behalf of Matador, to fill the small independent label seat on the board.

How has SoundExchange evolved since you first became involved in the organization?

SoundExchange has changed a lot since I first became involved. When I started at SoundExchange, the organization was much smaller, first of all, and it used to be comprised of much more disparate parts. You had the majors operating in one corner, the independent labels operating in another corner, and the artists operating in another corner. But what’s probably the most pronounced change I’ve seen over the years is how substantially it’s grown in terms of income distributed to artists and labels — it’s quite remarkable. And while artists were not typically the owners of copyrights, they’ve now emerged as more equal partners, in the sense of being much more involved in determining rates and use conditions attached to their own recordings. In 2012, many artists choose to make their own distribution deals, to self-distribute their music or to manage their own publishing. As a result of that, you have an organization that’s now more aligned, with all its members having an aligned interest in protecting copyright and in establishing reasonable rates for the use of music. And that’s a positive development.

With the increase in digital music listenership and the drop in CD sales, it seems the music industry is at a crossroads. Do you think it will eventually adapt to the widespread switch to digital music? What are your thoughts on the future?

I’m extremely bullish about the prospects for music, and musicians. I think the music industry will undergo a lot of changes – many are already happening. But music itself has an extraordinarily bright future — as bright as it’s ever been, if not more so. There were a lot of really interesting statistics that came out at the end of 2011, which essentially showed that digital music revenues have been growing for two subsequent years in a row, the first time that’s happened since the advent of digital music. I believe there was five percent growth in 2010 and eight percent growth in 2011. There’s also really huge growth in subscribers to digital services. Americans are starting to wrap their heads around the idea of subscription music. And with digital music services and digital radio services coming into their own and becoming integrated into mobile devices and cars, the long-term prospects are bright for music.

I do think there’s a lot of well-placed concern about the decline of physical sales. But that said, at least there’s hope that things are leveling out. Looking at Billboard statistics, last year’s physical sales shrunk by only five percent, compared to almost 19.5 percent the year before. Most importantly, all of the different components of digital revenues are up. It’s getting to a point where the artists and labels of 2012 have started looking at lots of different revenue streams – digital, touring, merchandise, and international collections / neighboring rights – rather than looking at only one. And because they’re able to do that, they’re monetizing their business the way a normal business does, not just based on one revenue stream. They’re now in a position to experiment in a way that they’ve never been able to before. And they’re finding that they can not only exist, but exist comfortably.

Where do you see SoundExchange fitting into the future of the music industry? What are your hopes for the organization?

I see non-interactive webcasting royalties as a growing and crucial component of income for record labels and artists. SoundExchange distributed $292 million in 2011, which was up 17 percent from last year. It’s been on a climb for a long time in terms of revenues collected and distributed, and I think it’ll continue to climb. SoundExchange also has new management since last year. And the new management is very focused on enhancing the overall experience that artists or labels receive when they contact us. The board is also very focused on this – the whole organization is really. And I’m extremely pleased to see it happen. SoundExchange has the personnel in place to drive ahead as a premier collecting agency for growing revenue streams that will be even more vital for artists and labels going forward.

Speaking directly to artists and labels that are registered/members of SoundExchange, why should they be excited about where the organization is headed in the next year? Five years? Ten years?

First of all, they should be excited about where SoundExchange is headed because of the growing revenue stream we were just talking about. And I think they should also be excited to be associated with SoundExchange as an organization, because it has the interests of copyright owners at heart and constantly negotiates to ensure fair rates. I’m confident SoundExchange will continue to work to find a balance between setting rates that work for all parties involved, and bringing payees more closely into the fold. The board has gone to great lengths internally to make sure that individual webcaster groups are able to exist and grow. I’m very pleased to see the relationship with webcasters — who provide a means for people to access music — develop into more of a partnership.

What music are you currently listening to? What’s on your Internet radio playlist or your favorite digital/satellite radio channels?

I’m actually a pretty big Pandora fan. And if you looked at my LastFM playlist, or if you looked at my CD collection or my digital music collection, you would see that I’m very much a fan of independent music. One of the artists that I’m particularly excited about right now is Sharon Van Etten. She’s somebody who Toolshed has worked with and done digital promotion for in the earlier days of her career. Another artist who I feel very strongly about is MNDR, for whom we’re doing some social media outreach work. I’m also a big fan of the new Grimes album, I think it’s sensational. And my list goes on and on…

Do you have a favorite memory or anecdote from all your years in the music industry? Something that you are particularly proud of? Advice for people starting out?

I think everyone involved in music has a story…for me, it was probably sitting with Ani DiFranco early in her career listening to a demo of what became a song on “Not a Pretty Girl,” or perhaps being invited along to Ace Frehley’s birthday party and not being able to figure out which guy at the party was Ace.

But I think what I love most about being in the music industry is the number of shows and artists I get to see, and the fact that I still love to go out 2-3 nights a week to see live music. I’ve recently returned from the South by Southwest, and it is always very exciting to attend. I’ve had very good fortune in my business. My career in music was very much “educated luck.” I felt that I conceptually knew how to move myself to where I thought I needed to be, and so I planted myself firmly in the space that would allow me to move to the next stage. I have more humility than to say that I knew exactly what I was doing, but I believe I do have a knack for changing things up when I run into a wall and taking a new direction. A skill I learned climbing mountains when I was young.

I did make the decision early on that I was only going to work with artists that I like and that I believe in musically. And after 11 years of running my own business, I can honestly count on one hand the number of Toolshed projects that I haven’t been personally interested in. A lot of it has to do with working with great people and great music at Beggars Group and Matador Records. That inspired my all-encompassing mantra for music, which is: You have to give in order to get. In my case, my whole career has been built not only on trying to give out in a fair way, but also building a peer group around me that I like and that I respect. And you can’t ask for much more than that.

As we explain in our motion to dismiss, we believe the complaint should be tossed out of court for at least the following reasons:

1.SiriusXM sued SoundExchange due to its role in helping record labels collectively negotiate the statutory license — the very activity that Congress specifically encouraged. When it created the statutory license for licensing digital music performances, Congress provided copyright owners the ability to work together in rate negotiations for the use of their digital performances. This ability made good policy sense; otherwise the parties would have difficulty making the license work properly. Congress also decided that if the copyright owners and services didn’t reach agreement, copyright owners would not have the right to walk away as they would with traditional negotiations. Instead the rates would be set by the Copyright Royalty Board (CRB). Sirius XM is trying to prevent SoundExchange from engaging in even the most basic efforts to help educate the copyright owners and artists whose rights are at stake. In other words, Sirius XM wants the benefits of the rate court (access to all commercially released sound recordings at a low government rate), while simultaneously trying to prevent copyright owners from exercising their right to coordinate in rate court proceedings and negotiations, or even to learn about the basic facts of the case.

2.SiriusXM is complaining about rates set by the government, not by SoundExchange. While we advocate for higher rates on behalf of our members and ensure they are informed about their rights, it’s ultimately the CRB that sets the statutory rates. While SiriusXM claims that it was “harmed” by having to pay a government rate for the use of content, nothing could be further from the truth. The CRB does its due diligence to ensure the government rates meet a “fair” and “reasonable” standard. In fact, in the past the rates for the musical content from which SiriusXM benefits have actually been artificially low. The idea that SiriusXM “has been forced to deal exclusively with SoundExchange to acquire statutory licenses at higher prices” is not only absurd, it’s completely contrary to the statutory process that has helped its business thrive.

3.Sirius XM’s suggestion that SoundExchange has any ability to “choke out competition” is outrageous. SoundExchange has an obligation to the artists and labels it represents to advocate on their behalf and inform them about rate-setting proceedings in which the CRB determines the value of their recordings. SiriusXM, on the other hand, is telling record labels to take its offers – at a significantly lower rate – or risk decreased airplay of their content. SirusXM, the only satellite radio provider entrusted to use the public airwaves for its own commercial benefit, is threatening to alter its programming based upon which labels take its offer. We have to question: who is really leveraging its market power here at the expense of the record labels?

4.Simple economics drove so many record labels to turn down Sirius XM’s direct licensing offers. SiriusXM’s entire complaint depends on the notion that some record labels rejected it offers because of “pressure tactics,” but the complaint itself makes clear why many labels did just that. SiriusXM was offering the record labels a rate that was lower than the already low rate set by the CRB, and yet SiriusXM expected to receive even more rights to their sound recordings in return. In other words, they were demanding more rights for less money. The fact that so many record labels turned down this deal is hardly surprising. It’s a matter of simple economics – not a conspiracy.

SoundExchange is proud of its efforts in supporting the creative community. We have every right to advocate for and educate the constituents we serve who put their heart and soul into the music they create. We are prepared for this challenge against Sirius XM – a multi-billion-dollar business built on the backs of the recording artists and record labels that make its very existence possible. We remain committed to our mission of protecting the long-term value of music, and ensuring that recording artists and record labels continue to receive the compensation they deserve.

The full Motion to Dismiss can be found here.

View SoundExchange’s October 2011 and August 2011 statements regarding the satellite royalty proceedings.

@SoundExchange I just signed up, I heard about your excellent services at the #AscapExpo this weekend, and became a new member.

— EverGlades Boss (@EverGladesBoss) April 23, 2012

Another incredible webinar by @SoundExchange and @BandPage !! Thank you for the great insight! Greatly enjoyed the analytics explanation!

— David Izzo(@DavidIzzo) April 27, 2012

 
Check our calendar to see the latest list of places we’ll be. If you can’t come talk to us in person feel free to call us at 202-524-7839 or connect on Facebook and Twitter.

All we need these artists to do is REGISTER to collect Existing royalties and those earned in the future. Registration is free so before you Exit this page, see if you can refer an artist listed below.

The following artists are on the Extremely long of unregistered artists:

XYZ
X-Ecutioners
XL
Xplosivo
Xen Nightz
X-Man
X-Mas Balls
X-Raided
Xiomara
Xavi the Destroyer
Xodus

“I’m pleased to have Marie Knowles join us as our new vice president of communications. She brings a broad set of public relations skills and extensive corporate reputation-building experience to our team,” said SoundExchange President Michael Huppe. “SoundExchange has grown from a fledgling company to the thriving organization we are today in a very short time. It’s important that we now have dedicated resources in place that enable us to clearly communicate our message as we move into our next chapter.”

Marie’s career includes having served in the corporate communications department at a major media company, where she was responsible for overseeing the implementation of national and local campaigns earning press coverage in top consumer, music, automotive and business press. She was also instrumental in assisting with several successful high-profile public relations initiatives while at the organization.

In the past, Marie has implemented corporate and consumer communications campaigns for global organizations, such as Rosetta Stone and Iridium. While at DBC Public Relations Experts, Marie specialized in media relations for clients including: Blackboard, New Media Strategies and Ruckus Entertainment Network. Marie began her career at Alexander Ogilvy, the Technology Practice of Ogilvy Public Relations Worldwide, where her first project was assisting with the launch of Black Entertainment Television’s website. Marie is a graduate of the University of Wisconsin.

About SoundExchange
SoundExchange is the non-profit performance rights organization that represents the entire recorded music industry. The organization collects statutory royalties from satellite radio, internet radio, cable TV music channels and other services that stream sound recordings. The Copyright Royalty Board, created by Congress, has entrusted SoundExchange as the only entity in the United States to collect and distribute these digital performance royalties for featured recording artists and master rights owners. SoundExchange has paid out more than $900 million in royalties since its inception. For more information, visit www.SoundExchange.com or www.facebook.com/soundexchange.

BENNY MARDONES

I received a phone call….”Hi, my name is Michael, I just wanted to let you know that SOUNDEXCHANGE has some back royalties and we will be sending you a check”….the first thing I thought is….does this guy have the best job in the world?…he’s calling me…an unknown pianist to tell me they are sending me a check? You have to love that company.
thank-you SOUND EXCHANGE….I did my part and now you are helping me:)

Rada Neal, Pianist

It’s so great that soundexchange looks after the artists and musicians that created the soundtrack of our lives! It’s a good feeling to be recognized and rewarded! Keep up the good work.

Beau Charles of the Knickerbockers

We have royalties Waiting for these artists:

Wess Morgan
Washed Out
Wanda Sykes
Wayne Brady
World’s Famous Supreme Team
Wendy Carlos
Woods
Weekend
William Carter
Wibal & Alex
Won by One

Who Pays SoundExchange? (2011) (View as PDF) (View as Excel)

If you believe there is an error on this list, please contact our Licensing and Enforcement department (l&e@soundexchange.com or 202.559.0555). We’ll be updating the list at regular intervals to bring you the most relevant data.

Register now for only $319 with our special 20% off Discount Code: NMSNYSX2323

This summer’s premier music event is already 100 speakers strong. To complement the already announced speakers, New Music Seminar has confirmed its 2nd round of Players (speakers), including Warner Music Group CEO of Recorded Music, Lyor Cohen; Lava Records President, Jason Flom; Rhapsody CEO, Jon Irwin; Epitaph Records Founder/CEO, Brett Gurewitz; Producers Just Blaze and Benny Blanco; Sony Music Entertainment President of Global Digital Business, Dennis Kooker; Jagjaguwar, Secretly Canadian, Dead Oceans CEO/Founder, Darius Van Arman; Slacker CEO, Jim Cady; and Amazon Digital Music VP, Steve Boom.

These leaders will join keynotes from Clear Channel, CEO Bob Pittman, and digital music futurist and Founders Fund Executive General Partner, Sean Parker in sharing their vision on the “new music resurrection.” In addition, attendees will hear from SoundExchange’s President Michael Huppe and VP of New Media & External Affairs Bryan Calhoun on the future of the new music business.

SPECIAL SOUNDEXCHANGE REGISTRATION RATE: Click here to register now and you’ll automatically be enrolled to win a Gibson guitar. Don’t forget to use our discount code (NMSNYSX2323) for 20% off.