We have discussed different types of music rights and how those rights can be monetized to create revenue streams for your content.
Soundexchange is rapidly growing and is a powerful revenue global stream that functions differently than a Performing Rights Organization (PRO).
Soundexchange is also monetized differently than streaming platforms like Spotify or Apple Music.
Soundexchange Brief History:
Soundexchange was created in 2001 as a collective rights management organization (CRM). It’s sole function was to establish a standardized payment and collection method for digital performance of copyrighted material.
At that time in the early 2000’s the explosion of online music driven by the growth of high-speed internet meant that the world of music consumption was changing and the monetization of on-line, satellite and cable music use needed to be addressed.
Soundexchange was established by the U.S. Congress to monetize this still new industry.
How does Soundexchange pay me?:
By registering your music with Soundexchange, you will be collecting your money in one of 2 ways from companies like Sirius, Pandora, Music Choice and digital radio stations.
More info on who Soundexchange collects from is available here.
Why is Soundexchange different than my PRO?:
Good question!
Soundexchange represents artists and labels whereas your PRO represent songwriters and publishers (huh?).
Terrestrial Radio has never paid artists or labels (long story), Soundexchange means to address this issue in the growing digital arena.
In short, unless you are registered with Soundexchange it is likely that none of this revenue if being paid to you.
It is also likely that it may have already been collected but not paid to you!
What are the two ways to collect money from Soundexchange?:
Soundexchange collects from digital radio, satellite radio and splits payments equally between:
1- 50% Master Owner (Label)
2- 50% Featured Artist* (Band, Group and/or Artist).
More details about how these payments are made are available here.
This is the important part!
As an Independent Artist, if you’re the writer of your music and you self-distribute, it is very likely that you can collect on both revenue streams.
You will want to be registered with a PRO as well as with Soundexchange.
Registering your content properly is an important part of being a creative. Metadata needs to be accurate and complete to insure you are compensated, but also to insure you are credited properly and so that music consumers can find your works when they look for them!
Soundexchange Looking Forward:
Soundexchange has expanded and has a global reach, partner companies in other countries collect and pay Soundexchange in a similar fashion to what is outlined above, the information on where Soundexchange collects is available here.
As the creator of your music you will (technically) collect revenue for your music forever. Because digital radio and satellite radio is expanding and will ultimately replace terrestrial radio as a primary listening source, your Soundexchange revenue stream will only become greater.
It’s time to get serious about the business of music.
*there is a 5% holdback for non-featured artists
