Over time I predict a question will come up more frequently in the minds of music-creators: Should I join SoundExchange? Will I make any money by joining?
After tracking the court proceedings that have stemmed from Pandora’s emergence on the music scene – and after speaking with a SoundExchange representative this week to better understand how they operate vs. ASCAP, I’d have to say that generally the answer is “yes.”
And if your music is currently being played on Pandora or Spotify; and you own the master recordings, then the answer becomes “absolutely yes!”
Streaming services like Pandora and Spotify need content from the major labels (remember them?). Years ago, when those licensing conversations began, the entity who negotiated on behalf of the major labels was SoundExchange. After all, they had already been doing it for years in terrestrial radio (remember that?).
And negotiate they did. SoundExchange promptly influenced US legislation to ensure they would be deemed the nationwide administrator of all “sound recording” royalties whenever said sound recordings were digitally transmitted in a “non-interactive” way (basically the listener can’t select which song they hear).
Congress gave SoundExchange a big ‘ole stick that they weren’t afraid to use. Once the leglislation was in place, they decided to charge Pandora 50% of revenue. You could almost hear Spotify’s investors crying over their leatherbound business plan packets.
Although SoundExchange initially won this tug-of-war initially on behalf of major labels, they have wisely chosen to extend their royalty collection power to small/unknown labels & artists like us. They’re fighting for the little guy…..and winning. Whereas performing rights organizations like ASCAP & BMI are constrained from collecting any serious money from digital stream services due to an outdated court ruling, SoundExchange saw streaming technology coming years ago and perfectly positioned themselves to be the financial gatekeeper. They took a page from the same playbook the Harry Fox agency used when phonographs first came into existence (we’ll talk about that in a later blog).
You’ll see similarities between your PRO membership and your SoundExchange membership: Both memberships are free. Both have a clause that permits you to negotiate deals directly with music buyers when that’s in your best interest (as publishers, we like that flexibility…alot). SoundExchange does not conflict with any PRO membership you may currently have. You can have both.
There is a difference between the exact part of your track for which ASCAP will claim its jurisdiction and that which SoundExchange will (I explain that
here). But over time that distinction will only become relevant to major labels and music deals where there are multiple fingers in the pie .
So get your free membership to SoundExchange, comrade. And get piece of mind in knowing that the company who’s actually getting decent checks from the big digital streaming providers is mandated by law to turn around and remit that money to you.
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Mike Bielenberg is a professional musician and co-founder of http://www.musicrevolution.com, a production music marketplace with over 30,000 tracks online where media producers, video producers, filmmakers, game developers, businesses and other music buyers can license high-quality, affordable royalty-free music from an online community of musicians mbielenberg@musicrevolution.com. 
