March 20, 2018 Vol 6 | Issue 1
In This Issue INDIE NOTES
A2IM Names SoundExchange Finalist for Libera Awards 1
SXSW NOTES
That’s a Wrap! SXSW® 2018 2
PUBLISHING NOTES
CMRRA Closes 2017 With Strongest Quarter Ever 3
ROYALTY NOTES
SDARS III: The CRB Weighs In 4
MONTHLY TIPS & CUES
Paying Music Creators is Our Primary Objective 6
TECH NOTES
SXWorks Launches Database for Publishers and Songwriters of More than 60 Million Address Unknown NOI Filings 7
INDIE NOTES A2IM Names SoundExchange Finalist for Libera Awards
SoundExchange supports the independent music community every day, so we were honored when the American Association of Independent Music (A2IM) announced March 6 that we are a finalist for the Libera Awards Independent Champion.
“We passionately believe the health and vitality of independent record labels all over the world is crucial for the future of the entire industry. We are big supporters of the independent artists and labels we
1 www.soundexchange.com INDIE NOTES serve, and big believers in A2IM’s mission. It is rewarding that our efforts have been recognized by our peers with this nomination for the Libera Awards’ ‘Independent Champion.’ We commend our fellow nominees for their service to the independent community,” SoundExchange President and CEO Michael Huppe said.
The Libera Awards will take place on June 21 at PlayStation Theater in New York City. The awards are the culmination of A2IM Indie Week, presented by SoundExchange.
To show our support for indies, we have started a video series called “Declarations of Independents” to capture the spirit and drive of indie artists and labels. Check out our second video in the series here.
SXSW NOTES That’s a Wrap! SXSW® 2018
And just like that, SXSW® 2018 is behind us. We had a wonderful week in Austin connecting with artists, record labels and creators. We met people who had money waiting for them and even registered a few people on the spot at our booth in the Artist Gifting Suite in the Austin Convention Center (ah, the conveniences of modern technology and a fast, quick and free registration!).
Gato Preto registering for SoundExchange with Associate Jade Bird performing at the SOUNDExchange SESSIONS (photo Director of Industry Relations Sean Glover (center) at the Artist credit: Lauren Slusher for SoundExchange) Gifting Suite during SXSW® 2018.
We also put on the SOUNDExchange SESSIONS at Mohawk on Thursday, March 15. The packed showcase featured incredible performances from Billie Eilish, Jade Bird, Jukebox the Ghost, Nina Nesbitt, MAX and more. Check out some of the photos from the SOUNDExchange SESSIONS below.
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Jukebox the Ghost performing at the SOUNDExchange MAX performs at the SOUNDExchange SESSIONS (photo credit: SESSIONS (photo credit: Lauren Slusher for SoundExchange) Lauren Slusher for SoundExchange)
Stay tuned to our YouTube channel for more content from SXSW® 2018 coming soon!
PUBLISHING NOTES CMRRA Closes 2017 with Strongest Quarter Ever
The Canadian Musical Reproduction Rights Agency Ltd. (CMRRA), which is part of SXWorks, a wholly-owned subsidiary of SoundExchange, distributed more royalties than ever in the fourth quarter of 2017. Contributing to this achievement was the distribution of substantial retroactive payments of online music royalties resulting from a recent, but long awaited, rate decision from Canada’s regulatory body.
With its record-breaking quarter, CMRRA has once again proven that they are a leader in rights management and a key partner for music publishers and self-published songwriters who earn music publishing royalties in Canada.
Introducing CMRRA CMRRA issues licenses and collects royalties for the reproduction of musical works in Canada on behalf of its music publisher clients. Licensees pay royalties to CMRRA, which in turn distributes the royalties to its music publisher clients on a quarterly basis.
“We are proud of our record distribution in the fourth quarter. Our ability to quickly process back- payments associated with such large volumes of data – linked to more than 22 billion streams and downloads – demonstrates the strength of our technology, our team and our brand,” CMRRA President Caroline Rioux said. “In conjunction with SXWorks, it is clear that we have incredible opportunities to do great things on behalf of all music publishers in 2018.”
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CMRRA’s Better Technology Investments Boost Efficiency, Faster Payments CMRRA’s technology upgrades have enhanced the organization’s matching capabilities and led to greater efficiencies that allow the agency to pay royalties faster, more efficiently and with greater transparency than ever.
CMRRA completed its transition to a cloud-based licensing and royalty distribution system in 2017. This benefits all clients.
CMRRA’s Advocacy Work Pays Off CMRRA has also taken the lead and invested heavily to advocate for publishers in national rate-setting efforts before the Copyright Board of Canada, as well as directly through negotiations with licensees. The organization’s work is responsible for the important flow of digital royalties paid to all publishers and self-published songwriters.
The organization also has established strong relationships with licensees to ensure that the best possible deals can be reached and that royalties are paid in the most efficient and expedient way. CMRRA collects publishing royalties from dozens of online digital companies, such as Apple, Google and Spotify.
“It is an important responsibility, but it’s one that we welcome because we know that our work supports all music publishers from around the world who are owed royalties in Canada,” Rioux said.
For more information check out CMRRA’s web page here.
ROYALTY NOTES SDARS III: The CRB Weighs In
The Copyright Royalty Board (CRB) issued its decision on the determination of rates for SiriusXM’s satellite radio service late last year. SoundExchange advocated in this proceeding for artists and rights owners.
The CRB’s determination applies to rates through 2022. The determination also covers royalty rates for the cable and satellite television music services provided by Music Choice and Muzak.
The CRB provided the reasoning behind its decision on January 10, when the Copyright Royalty Judges made their “initial determination” public.
The CRB increased the rates immediately for SiriusXM by 41 percent, from 11 percent of revenue to 15.5 percent of revenue effective January 1, 2018. By contrast, the CRB reduced the rates for Music Choice’s and Muzak’s services from 8.5 percent to 7.5 percent of revenue.
We combed through the 129-page ruling. One of the most compelling passages demonstrates the judges’ clear understanding of SiriusXM’s ability to pay the new royalty rate without suffering fiscal damage.
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“The Judges find that SiriusXM’s increased profitability does not provide an independent basis to adjust the 15.5% identified by the Judges. SiriusXM earns sufficient profits, as the only satellite radio provider, to allow it to pay the opportunity costs of its service to the record companies. Those opportunity costs, properly weighted, constitute the building blocks for the 15.5% rate. The evidence … makes it abundantly clear that SiriusXM, through its monopoly of the satellite radio distribution channel, has the financial capacity to pay higher rates and still maintain a high level of profitability.”
In other words, it’s not SiriusXM’s financial performance alone that warranted an increase in royalty rates, the judges wrote. It’s this idea of “opportunity cost.” SoundExchange witness Professor Robert Willig described opportunity costs as something incurred when “sales through one distribution channel reduce … sales through other distribution channels (thereby reducing compensation earned by content creators from those other channels …).”
In colorful language, the CRB also said SiriusXM bears all the hallmarks of a “natural monopoly.”
“As a natural monopolist in the satellite radio market, SiriusXM can, and does, realize substantial profits, as demonstrated in fine detail by [SoundExchange witness] Professor [Thomas] Lys,” the judges wrote. “The history of SiriusXM bears out this point. When there were only two satellite firms – Sirius and XM – both were on the brink of bankruptcy. … After they merged, they were transformed from two pumpkins into a single coach, as it were, realizing profits across many financial measures.”
We issued our statement following the CRB decision. Many others also weighed in on the important matter. In case you missed it, here’s a sample of what others said about the determination of rates.
From The Trichordist: “Major score for artists, musicians, vocalists, as well as major and indie labels.”
From Variety: Although the CRB ruling fell short of the 23 percent hike SoundExchange was seeking, the increase is a significant victory for SoundExchange and its constituents at a time when hard-fought music royalty battles in the compulsory license space can result in increases that are incremental, if granted at all.
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From Billboard: [musicFIRST executive director Chris Israel said] SiriusXM has benefitted from a below- market rate at the expense of music creators for nearly two decades, during which time they “dragged legacy artists through the courts rather than pay them what they deserve.” He called upon Congress to pass Fair Play Fair Pay Act, which would apply willing buyer, willing seller standards across all music licensing platforms.
Effective February 15, 2018, SiriusXM increased the “music royalty fee” that it charges its music subscribers.
MONTHYLY TIPS & CUES Monthly Tips & Cues
At SoundExchange, we get phone calls and e-mails every day from recording artists and rights owners asking for assistance on a range of issues. Our Monthly Tips & Cues will help you by providing useful answers to common questions.
Paying Music Creators is Our Primary Objective Question: When am I getting paid? Answer: SoundExchange is the only sound recording collective management organization in the world to offer monthly payments!
We distribute royalties at the end of each month to those who are paid via direct deposit and have an account balance of at least $100. We also pay quarterly (in March, June, September and December) to anyone whose account is set up to receive direct deposit who has accrued at least $10, or to anyone whose account is set up to receive a paper check who has accrued at least $100.
If you are registered and haven’t yet reached the threshold to receive a payment, stay tuned because we will pay you once you reach that level. If you haven’t registered yet, it’s easy with our online registration!
If you’d like to speak to a member of our Customer Service team specifically about your account, our team is standing by. You can reach us by phone at (800) 961-2091 or by email at [email protected] Monday through Friday from 9 am-6 pm ET.
We’re here to take care of the business side of things so you can focus on what you do best – creating the music we all love.
6 www.soundexchange.com | March 20, 2018 TECH NOTES
SXWorks Launches Database for Publishers and Songwriters of More than 60 Million Address Unknown NOI Filings
On January 23, SXWorks, a subsidiary of SoundExchange, launched NOI LOOKUP, a new service to help music publishers and songwriters search the more-than 60 million address unknown Notice of Intention to Use (NOI) filings made with the U.S. Copyright Office.
NOI LOOKUP is available free of charge at sx-works.com and is the first tool designed to allow music publishers and songwriters to quickly and easily search address unknown filings for uses of their works.
An NOI is a notice sent by a proposed user of a musical work informing the copyright owner that it intends to distribute the musical work pursuant to the compulsory license set forth in Section 115 of the Copyright Act. The proposed user must send an NOI to the copyright owner before or within 30 days of making, and before distributing, any phonorecords of the work. If the music user sends the NOI to the copyright owner, it must account and pay statutory royalties to the copyright owner for all uses of the song.
If the proposed user can’t locate the copyright owner in the registration or other public records of the Copyright Office, it may file an address unknown NOI with the Copyright Office. If a service files an address unknown NOI with the Copyright Office, the service isn’t obligated to pay a royalty to the copyright owner of the song until after that copyright owner becomes identifiable in the public records of the Copyright Office, and the service is free to exploit the work under the statutory license.
Address unknown NOI filings are made available to the public by the Copyright Office in separate compressed files, which makes searching the records individually difficult. The SXWorks NOI LOOKUP tool indexes all the NOI address unknown filings and provides the information to publishers and songwriters in a comprehensive, searchable database.
NOI LOOKUP is available free of charge, and SXWorks will offer additional premium capabilities to the service in 2018. To learn more about NOI LOOKUP view this video that demonstrates the new service and read our extensive FAQs here.
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