SoundExchange and the ‘unpaid pool’
p2pnet news view | Music:- Music artist royalty payments or, rather, the lack of them, from RIAA spin-off SoundExchange are central to an acerbic and long drawn-out debate between Nashville entertainment lawyer Fred Wilhelms and board member Dick Huey.
The storm first began to gather in July, 2007, when an unsigned Reader’s Write accused Wilhelms of having a vested interest in criticizing SoundExchange for not paying artists.
“On June 26, net radio broadcasters across America launched a day of silence to protest increases in royalty rates,” said a p2pnet post.
“In the shadow of the Capitol, SaveNetRadio artists welcome Congressman Jay Inslee and Congressman Don Manzullo to speak to the crowd,” said the caption to the accompanying photo featured on the SaveNetRadio site, going on: “The Congressmen have introduced legislation in the House of Representatives that would save Internet Radio.”
Wilhelms “is among the most vocal opponents of the increases, and he’s been uncovering the inconsistencies and outright lies emanating from the corporate music industry and its adherents,” said the story.
In a Reader’s Write, “OK, I’ll jump into this,” said the anonymous poster, going on:
“Fred Wilhelm’s been getting a lot of ink lately, dipping into various parts of the webcaster issue, which he no doubt enjoys. I think it’s interesting that Fred rarely (at least in posts I’ve seen) acknowledges that he’s got a very vested interest in trashing Soundexchange, since he’s interested in establishing a competitive society, and the CRB told him ‘no.
“Why is that, do you suppose?”
The accusation was intriguing because Wilhelms has for years been battling against a rock-solid SoundExchange wall of unresponsiveness on the question of artist royalties.
Many moons later, Huey later admitted he was the author and apologised for making the erroneous assertions.
Now Laura Williams (right) steps in on behalf of SoundExchange itself >>>
Dear Fred and friends, Greetings from SoundExchange.
Firstly, with regards to outgoing communications, please understand that a small organization with a low administrative fee must prioritize. I agree that SoundExchange has not been particularly good at outbound communications, as our emphasis and effort has been in getting the word out to artists, copyright owners, and services about their rights and responsibilities, which are also still relatively young. This year, I hope you’ll agree, we’ve been moving toward the goal of opening ever broader and clearer lines of communication. The new SoundExchange.com is an exemplar: not only is the information arranged in a more intuitive, user-friendly way, but there’s more information available there than ever before. Our registrants and members, as well as the service providers who use music, will find more of what they need is at their fingertips. SX has also expanded the External Affairs department to include general outreach and media communications, in addition to the constant efforts to contact and register artists and ROs.
SX is committed to being available to answer questions, and much of what folks ask is publicly available. My phone number is up on the website, and I invite you to call and chat if there’s anything I can do to help. Also, I’d like to repeat John Simson’s open invitation – if you’d like to stop by the office and talk through, or see how things work around here, you’re always welcome. Just name the date – we’ll be here.
The “unpaid pool”
First of all, let me clarify that we’re actively working to reduce the size of our unpaid pool, and we’re not satisfied with the progress in getting money out to artists. That said, I submit to you that the existence of the pool is, at least in part, a credit to SoundExchange, reflective of a determination to do hard things the right way, not the easy way. Even though regulations permit us to release funds after 3 years, we’ve only done that once, long ago – we’re still holding a reserve of funds to cover claims all the way back to our first collection in 1996 (half that reserve remains). We are first and foremost artist advocates. If we sought only to minimize criticism, we would long ago have done a pool release or liquidated the funds, as other societies do. But having a balance of zero isn’t our only goal – our primary goal is to make sure that money makes it to those who rightfully earned and are owed it. A premature release of the funds just to show a lower balance is counterproductive.
But finding, registering, and properly paying artists and SRCOs means overcoming a massive industry data deficit – there is no no central registry of track data, and no registry of artists and rights holders. It means an unbelievable education campaign to inform and register artists, many of whom don’t register even after five and six contacts to tell them they’re owed money. We’ve been executing database matches with other organizations, and asking them to help us reach artists who don’t yet recognize SoundExchange’s name or purpose. Check out recent coverage of the ReverbNation, CDBaby, and iLike matches. More than 15,000 artists for whom SX currently has money have been notified this way in the past few months, and many more matches are coming (watch for SonicBids!).
Better yet, we are now able to post the entire current unregistered list public on the website – something we hadn’t been able to do since 2006.
To help illustrate the scope of the challenge, let me quote liberally from John Simson’s recent letter in our quarterly newsletter, which reaches out 43,000+ registered artists and 5,000+ copyright holders:
” … Many services remain non-compliant, or provide us such incomplete data that we cannot rely on it to send out money. When reports arrive at SoundExchange, we’re too often faced with artist listings like ‘Various Artists’ or ‘Beethoven’ (we’re pretty sure Beethoven hasn’t ever made recordings). For copyright owners, we get a lot of label fields reported as “unavailable” or “white label” or “promo.” Sometimes, it’s “self-produced” or “self-released.” While some of these inaccuracies, and even misspellings, can be adjusted by software, many must be corrected by hand. Multiply that by millions of tracks, and you start to get an idea of the project we’re facing.
In addition to our full-time team, we’ve hired temporary staff this year to attack this volume of data. We are working to “fix” what is poorly reported to us and ensure that all royalties are going to the people who earned them. Bit by bit, we can resolve much of this data, but the inevitable result is a delay in getting payments out the door.”
We’re growing fast – our registrant rolls, performances processed, our incoming funds, our outgoing funds, too. In 2001, we distributed $3.1 million. This year, we’re on track to pay out $145.9 million. That’s astronomical growth, for any business, and it’s come with some growing pains. Likewise, while we take 20 to 100 artists off the unpaid list every week, online music services are proliferating, and more and more artists are getting played. Unfortunately, some of them don’t register with SoundExchange, and their names replace those coming off the list. But in time, we’ll get in touch with them too. That’s our commitment to paying artists and copyright owners.
We’re advocates, committed to doing a job which is much bigger than we are. Our board (including those who stand to benefeit from a pool release) continue to defer that release and support our efforts to find the rightful recipients of those funds. The layers to this problem – non-compliant services resulting in a lack of data, artists we haven’t yet registered, rapid growth, etc – are being addressed. We are not happy about the size of the unpaid pool, and we’re aggressively working to bring the number of unregistered artists, and the amount of money yet to be distributed, down. With more compliant services and more sophisticated in-house technologies, with a better industry knowledge of what SX is and does, we expect that trend to continue – and that’s good for everyone.
Service providers, Internet radio, and WSA agreements
You’re quite right in saying that a “one size fits all” approach is rarely the most effective. SX agrees entirely. That’s part of the rationale behind the Webcaster Settlement Act agreements. In 2009 alone, we negotiated 8 different agreements, to ensure that their business needs were being addressed in a way which also ensured fair compensation to artists. Bakers want to pay less for flour, dressmakers want to pay less for cloth, streaming services want to pay less for tracks. That’s understandable. But it doesn’t mean that the flour mill, the weaver, and the artists/copyright owners don’t have the right to be paid fairly for the product they supply. Given our core mission, the SX legal team has been amazingly flexible in accommodating the specific needs of services. A group of college webcasters, for example, were concerned that they couldn’t meet reporting requirements during the summer months, when they’re un- or under-staffed. We made an agreement just for them to meet those needs. Public radio, under the stewardship of the Corporation for Public Broadcasting, also had certain unique business considerations we were able to accommodate. All of these agreements are “opt-in” – meaning that webcasters aren’t bound by them unless they choose to make the agreement with SoundExchange. If webcasters choose not to opt in, they’ll simply pay the standard annual rate set by the Copyright Royalty Board (CRB). SoundExchange is committed to finding solutions which are fair for everyone – agreements which allow webcasters of all types and sizes to continue growing their businesses and distributing music, and which provide the artists and owners of the music to share appropriately in that success.
You also may have noticed that SoundExchange staff were out at a number of events this year, including the Future of Music Coalition conference, the National Association of Broadcasters annual show, Association of Music Personnel in Public Radio and the RAIN Summit East. In these venues, and every day on the phones, we answer questions for our service provider licensees, with the goal of helping them meet their compliance obligations. Thanks to the agreements, we are able to work with service providers as business partners, rather than adversaries in litigation. It’s a win-win.
In conclusion
Since this is my first foray into P2Pnet, instead of leaving you with wishes for a happy holiday, let me instead leave you with a New Year’s resolution from all of us at SoundExchange. We’ll do better keeping the lines of communication open, and as always we’ll continue to keep the money ($300 million and counting) flowing out the doors to those who’ve earned it.
Best Regards,
Laura Williams
Communications, New Media & External Affairs
SoundExchange
Stay tuned.
Below are the p2pnet posts to date »»»
- Fred Wilhelms to Dick Huey - November 18, 2009
- Dick Huey to Fred Wilhelms - November 17, 2009
- Wilhelms, Huey, SoundExchange exchange - October 19, 2009
- Dear Dick Huey - October 8, 2009
- Has SE’s Dick Huey gone missing? – July 12, 2007
- SoundExchange’s Huey to Wilhelms – July 5, 2007
- SoundExchange’s Huey v Fred Wilhelms – July 3, 2007
- SoundExchange: making up numbers – June 28, 2007
Jon Newton – p2pnet
First they ignore you, then they laugh at you, then they fight you, then you win ~ Mahatma Gandhi
December, 2009
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December 23rd, 2009 at 3:40 pm
blah blah blah yada yada yada
December 23rd, 2009 at 3:51 pm
Hey, look, the paid talker is here. This should be fun.
December 23rd, 2009 at 6:23 pm
I’m here too…watching with interest. The original spirit of this series of exchanges was trying to get past rock throwing. I’d like to see this turn into a dialogue, with some reasonable back and forth. Let’s remember that this particular dialogue was set up, by me, in response to an assertion that it was impossible to speak directly to Soundexchange because they never respond.
Well, now you *can* speak to Soundexchange. What would you like to ask them?
The start of the post above suggests, once again, that my original post that started all this was “anonymous”. This has gone on forever, and I’ve responded to it before, but I wish we’d get past this so it doesn’t keep re-appearing. An anonymous post is one where the person does not identify him/herself *at all*. In my browser, the two first responses above are anonymous posts…I have no idea who wrote them. My original post, some number of years ago, had this in the second paragraph:
“How do I know, you ask? Because I’m a Soundexchange board member. I don’t represent the RIAA – I hold the small independent seat on the board, which is one of 12 seats on an 18-seat board that belong to either independent labels or artists…NOT the RIAA.”
Is that anonymous? Sure, I didn’t post my name (which no one knew anyway, at that point), but the statement above told everyone exactly who I was.
You’re correct, Jon, that I apologized many moons later, and I’m glad I did finally apologize for the attack and for the mistakes I made in posting, and sorry it took so long, but you are incorrect that I originally posted anonymously. The implication at the start of this post is that I was not willing to let anyone know who I was in my original post. I clearly identified myself as the holder of the small independent seat on the Soundexchange board, and anyone with a web browser could (and several did) go to the SX website check to see who I was.
To me, this kind of ongoing assertion is a sideshow that just sets a negative tone that makes it harder to have a real dialogue.
Also – maybe I’m stepping out too far on the limb – but I don’t think my conversation with Fred has been very acerbic lately. I think it’s been pretty productive, and that’s encouraging to me.
Let’s make this green shoot of a dialogue count for something.
December 24th, 2009 at 12:33 pm
Dick,
My full response to Laura is coming in a couple days.
As to the posts you are responding to, you are reaping what SoundExchange has sown in terms of distrust. That’s not going away simply because you say you are willing to talk. Your own history, of promising to engage and then refusing to, is not the kind of thing that trust is built on. SoundExchange has always had a problem distinguishing between talking about doing something and actually doing it, and you’ve been guilty of it in the past. You shouldn’t be surprised if we start out skeptical. The burden is on you and Laura to overcome what SoundExchange has done. While I appreciate your attempt to keep the constructive tone, we should start with the understanding that a dialogue is not the same thing as taking turns issuing press releases. We’ll see if Laura actually wants to engage on the issues I raised with you, or if it is going to be more of the same.
And by “more of the same,” I refer directly to your repeated insistence that “12 seats on an 18-seat board . . . belong to either independent labels or artists…NOT the RIAA.”
Those seats “belong” to the entity that put people in them. They no more belong to the people who sit there than a dog belongs to the fleas who hitch a ride on it. No artists chose any of their “representatives.”
No “artist representative” (with the possible exception of the two union reps) is accountable to artists for their actions in the board room. No artist representative makes the slightest effort to reach out to the artist community at large to either explain what they’re doing or to seek advice. And, to be perfectly blunt, no artist representative will be
And as for your “independent label” representative, one of the three, Tommy Silverman, not only sits on the SoundExchange board, he also sits on the RIAA Board of Directors. Are you going to seriously argue that out of the entire universe of independent labels, they had to seat someone who sits on their own board to represent the independents?
I realize it is very important to you to assert your independence from the RIAA, but beyond your words, there’s just no evidence of that independence, and plenty of evidence (in the presence of Silverman) that SoundExchange is giving just as much lip service to the concept of independent labels as it is to artists, and you appear to insist on singing right from the RIAA hymnal.
I think you have to accept what everyone outside SoundExchange already recognizes; the interests of the RIAA labels do not always coincide with the interests of artists, or with the interests of independent labels. You also have to accept the reality that there is no single viewpoint for artists and that SoundExchange purporting to speak for the entire artist community only accentuates the disconnection between SoundExchange and reality.
And that, Dick, is going to be the real test of this “dialogue.” Is there going to be evidence to back up what you and Laura say, or is everyone simply supposed to believe what you say because you say it? I hope you understand by now that if we are supposed to trust you, that SoundExchange, through its lack of transparency and outright dissembling, doesn’t come into this “dialogue” with any earned trust. You and Laura are going to have to respond to questions, and your answers have to make sense based on what we know. The two previous comments simply reflect the skepticism that SoundExchange has earned by its prior conduct in regard to communication, and, as promising as the idea of real dialogue is, it remains only a promise until you actually come across with answers to the questions that are asked. Be honest, be forthright, and, most importantly, be responsive, and I’m sure you will see a change in attitude here.
December 28th, 2009 at 12:59 pm
Hi Fred,
Happy post-holiday to you and yours. I’m on the same page with your statements about mistrust, and the test of this dialogue. I understand your skepticism, and the skepticism of those reading these posts, and I know I’m responsible for some of it. I’m doing what I can to change the parts that I can change where we’re in agreement.
In return – I would ask that sideshows, like me posting “anonymously” (which as I’ve pointed out by quoting my original post, didn’t happen, and only serves to pre-bias this community against me and Soundexchange) drop out of this conversation and others in the future.
As I’ve expressed before, it’s my feeling that Soundexchange should be moving into a new period, now that rates are largely set for a time going forward – a period where the organization engages in a much more direct and responsive fashion with the outside world; with its licensees, with its constituencies, and with the public at large. Many others share my opinion on this, and I am hopeful that we’ll see a good dialogue start here. I would only add that there’s going to be a natural inclination for others who haven’t been writing here to be cautious at first, because in the same way that there’s a level of skepticism in this community regarding the accuracy of what’s posted here, there’s a similar level of skepticism on the other side that this community is looking for real solutions, and not just to bash the organization.
I would like to think we’re presented with an opportunity to change that – I’m now trying to do my part to be part of the solution, and I’m making my opinions known within Soundexchange, not just on this forum. I am keeping a journal of ideas that I think are interesting or that bear further investigation, gleaned from this forum and from other forums such as Pho.
Laura made an offer above to have interested people visit Soundexchange. You, and others, should consider doing this. I find that face to face interaction does much to address mistrust, and it’s a good way to measure people up. If this winds up happening, I’d make an effort to be there too.
Regarding the RIAA comments – myself, Rich Bengloff, and Tom Silverman occupy the independent label seats. I know people from the RIAA, and am friends with some of them, even if I do disagree personally with some of the organization’s policies and approaches. I’m not a member, I don’t attend their meetings, they don’t share strategies with me.
While it’s no doubt true that the RIAA’s influence helped put me into the spot I’m in – after all, I wasn’t able to get on to the Board without being voted in by other board members – I would say personally that my position on the board had more to do with the profile of the label I represent, and also with the record that I established, while directly employed at that label, of addressing industry-wide issues. Those efforts are what originally brought me into contact with Soundexchange. I don’t view the fact that RIAA members voted for my board membership as compromising to my core principles. I spend no more time contemplating the RIAA’s reaction to an issue I feel strongly about than I do any other subgroup of the board.
Rich Bengloff I give very high marks, and he certainly is not in the pocket of the RIAA.
What you say about Tom Silverman is undeniable – he is indeed on the RIAA Board of Directors. Nonetheless, I don’t know of many independent label execs who are more engaged with the independent community than Tom is, and I find his voice to be a reasonable and valuable one on any number of issues, and I don’t find him to be unduly swayed by his RIAA membership.
You asked for my honest opinions, there they are.
You ask me to “accept what everyone outside Soundexchange already recognizes; the interests of the RIAA labels do not always coincide with the interests of artists, or with the interest of independent labels”. I agree, wholeheartedly, with that statement, and I have for the entire time I’ve been on the board. No disagreement there, and there never has been. However, I would say that the interests of the RIAA labels *do* sometimes coincide with the interests of artists and independent labels, and I work with individual members to find those intersections. There are more of them than you would think. Where there is disagreement, there’s horse trading – I may support a particular policy or initiative, that doesn’t negatively impact my constituency, in return for a “yes” vote on something that’s important to me. That is basic politics.
As far as the composition and accountability of the artist board – I’ll state again that, as an independent label rep, it’s not really my place to be fighting this fight. I will go so far as to say I understand your position. But I will add to that – I have very close relationships with many of the artist reps, being an ex-artist manager myself, and I see them regularly stand up and fight for issues that *are* important to the artist community as a whole, such as the issue I’m very much currently engaged on – metadata review and overall systems analysis, with the express intent to increase and improve the payouts of monies due to rightsholders.
OK, enough from me. Over and out for the rest of the holidays.
x -dh
December 28th, 2009 at 3:25 pm
You know there’s a lot of oversimplifications to be mined in this little press release, but I’ll focus on this one for a minute:
“A group of college webcasters, for example, were concerned that they couldn’t meet reporting requirements during the summer months, when they’re un- or under-staffed. We made an agreement just for them to meet those needs.”
SRSLY? Because from what I recall, at the CRB’s asking, college webcasters pointed out that what SoundExchange wanted was literally impossible to provide – no matter what the season. This ping-pong’d around in CRB filings as each side submitted their comments – college stations saying roughly ‘we’re still trying to comply as it is with the current requirements, and the system is broken by design – otherwise there wouldn’t be a huge backlog of unpaid artists – and here you want to raise the bar on this again? No way.’
I paraphrase, but it’s all there in the CRB filings for anybody who wants to kill a few hours reading it all.
And the SE deals? They solve some problems, for some people, until 2015 or 2016. I think my favorites are the ones with the clause that prohibits anybody who takes a deal from participating in any other royalty rate setting proceedings. AWESOME.
I come from college radio. So no matter how many times I hear somebody try and cram “We’re artist advocates” into their press release I just shake my head. College radio disproportionally supports the smaller, unknown, indie artists and labels, period. College radio people are people who work for free, with no budget, people who one-on-one with the artists on a daily basis to get them airplay. The kind of people who let the bands crash on their floors, and who trickle into LPFM’s and internet and community stations because the “big” stations are all locked up. But, hey, you read those CRB filings and it’s all their fault nobody’s getting paid. We’re all thieves who steal the hard work and flour and threads or whatever other BS metaphor you want to insert here for “playing other people’s music and giving them free publicity”. It’s never, ever because the entire process is broken by design now, is it?
(And seriously? You were unable to **post a list to your website** since 2006? And this was because … ?)
Most of the stations I deal with even agreed with the royalty concept. Didn’t have a problem with it if they could actually see their money making it into the artist’s hands. FWIW, once my station started paying and reporting to SoundExchange we pointed *hundreds* of the artists towards SE to get their slice of the money we sent in. Why the zero-budget college station with no fulltime employees had to
explain to the artists what Soundexchange was, yeah – you tell me, but we did it for years. And then we started reading the unpaid artist lists. And watching the recordkeeping requirements creep upwards. And hearing from the artists who were actually trying to get their
checks, trying to decipher wtf they were looking at. And then we got to see SoundExchange and the RIAA create MusicFIRST, and see that whole mess unfold. Again, surprise, surprise, according to MF it was all radio’s fault, and artists are starving in the streets because we were all filthy music thieves who wanted to steal somebody’s hard earned royalties.
(AND lets not forget that whole WICB/Aimee Mann’s ‘blacklisting’ thing. Because right around that period in time, when it came down to it there was enough money and effort to create MusicFIRST and have a paid MusicFIRST / SoundExchange lobbyist ask the FCC to investigate some pissant 100-watt college station in the middle of nowhere because their GM posted something stupid to an Aimee Mann message board. Right? But there certainly wasn’t enough money and effort to find and pay somebody like Sir Mix-a-Lot. And at that
point, seriously, it’s just a huge joke now. Your system is broken. Start over.)
So, yeah. That’s what I think of when I think of SoundExchange. Us, bending over backwards to redo the way we programmed and played our music so we could keep working SE records, plus scraping up a couple hundred bucks for yearly SE payments, while watching SE literally sit on millions and pay lobbyists to run MF for them.
I really, truly wish I could say all this reverbnation/cdbaby stuff is a step in the right direction for getting people paid. But until the world sees the final numbers behind it, it’s all just another stupid press release.
p.s. For anybody else who really cares about radio stations and what this SE mess does to them, go read “Angst in studios over webcasting pact” over on current.org
December 28th, 2009 at 6:27 pm
Laura, are you saying that a new unfound artists list has been posted?
If so, where?
January 2nd, 2010 at 2:44 am
I’m an artist and I searched SX’s database for my name. It matched 0 results (I’ve been a member since 2005). I then searched PLAYS database and it returned a lot of my songs and then prompted me to send SX an email, which I have.
My question is, if SX is trying to reach artists and create awareness, why not take out ads on sites like Myspace and run commercials in shows like The Highway Girl? Artists talk and it seems to me that SX isn’t doing much to reach the UNSIGNED artist community. I can’t believe that after five years of being around, most artists I interview still haven’t heard of SX. Not only indie artists, but artists like Juliette Lewis and Martha Wainwright.
SX always touts that they’re sending out letters and doing promotion to spread the word. Isn’t it time to face the fact that whatever SX is doing isn’t reaching artists. Change your strategy!