SoundExchange, Once Again, Warns Artists That If They Don't Register, It Might Keep Their Royalties

from the again? dept

Fri, Oct 12th 2012 6:39pm — Mike Masnick

You may recall that nearly a decade ago, people began to question why SoundExchange, the RIAA spinoff created to collect satellite and internet broadcasting royalties, was allowed to keep any of the money for artists it couldn't find. That resulted in some controversy, when people realized that it was sitting on over $100 million and suggesting it might keep the money for a big list of artists it couldn't find. After much uproar, SoundExchange backed down, and said that it wasn't, in fact, keeping the money. And, to its credit, in the past few years, SoundExchange has been very good about working a variety of angles to get artists signed up to get the money they're owed from such webcasting royalties (such as those Pandora was just talking about).

However, some artists still aren't signing up -- and SoundExchange is apparently giving people something of an ultimatum, in which they hint at the fact that, you know, if they wanted to they absolutely could just keep the money.

Register by Oct. 15 as you may risk losing any royalties collected three (3) or more years ago by SoundExchange.

SoundExchange is authorized by law to release older unclaimed royalties to offset our costs and distribute proportionally to those we already pay. We have repeatedly held off on doing this, but we need your help to spread the word and get recording artists and record labels to register.

As some have noticed there are some pretty big names on the "unclaimed" list. Swedish House Mafia, N.W.A., Billy Bob Thornton, Sublime, Fleetwood Mac, Rebecca Black, Louis CK, Grandmaster Flash, The Byrds, Charlie Sheen, Brother Ali... and a bunch of others. I'm pretty surprised that Rebecca Black and Louis CK haven't figured this out yet... but there's one name on the list that is stunning: Gene Simmons. Simmons is famous for being focused almost entirely on getting money, even to the point of saying that artists should sue their fans. You'd think that somewhere along the line he'd notice that he should register with SoundExchange to get what's owed to him.

For what it's worth -- while there were some legitimate concerns that SoundExchange was doing little to "find" these artists, I no longer believe that's the case. Having watched their efforts over the past few years, they really have done quite a lot to try to get artists to register. Of course, this really just highlights one of the problems of setting up a system like SoundExchange in the first place. Creating unnecessary middlemen may seem like a useful solution, but it often seems to just prevent more direct support of artists. Still, if you are a recording artist of any kind, it's worth getting registered to avoid having SoundExchange keep the money it has for you for itself.

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Filed Under: gene simmons, registration, royalties
Companies: soundexchange

29 Comments

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Casey, 12 Oct 2012 @ 7:22pm

Good
It's honestly about time this happened. Love or hate Sound Exchange, they do what they were setup to do. If artists can't help themselves, they shouldn't expect others to go out of their way for them and in this case, hold money indefinitely.
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MrWilson, 12 Oct 2012 @ 7:54pm

Re: Good
Or maybe if SoundExchange doesn't actually represent the artists it collects for, as is shown by the fact that they don't have these big name artists signed up, maybe they should close up shop and give the job to someone who can do it better.

It doesn't seem hard to find Gene Simmons and mention that you have money for him. Heck, Richard Castle and Kate Beckett stumbled onto his house by coincidence. If fictional characters can find him, why can't SoundExchange?
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Casey, 12 Oct 2012 @ 8:32pm

Re: Re: Good
Even though I see your point, I honestly don't think several of these artists care. Even if Sound Exchange did not reach out to Gene Simmons, it is almost impossible to believe he does not know that Sound Exchange has money for him. As controversial as Sound Exchange is lately, he would have to live under a very large rock to not know he has money waiting there. Every artist should be signed up, regardless of success or if they expect to make more than a few cents.
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Beta (profile), 12 Oct 2012 @ 9:22pm

Re: Re: Re: Good
Pardon me if this is a naive question, but...

If Sound Exchange has money that rightfully belongs to Gene Simmons, why don't they just give it to him?
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Casey, 12 Oct 2012 @ 10:24pm

Re: Re: Re: Re: Good
My best guess would be the legal concerns surrounding it. They would be entering a minefield if they just started passing out money to artists without having them register. It also would not be cheap.
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Beta (profile), 12 Oct 2012 @ 10:43pm

it rhymes with "flembezzlement"
And there aren't legal concerns about pocketing money they've collected on someone else's behalf? That isn't a minefield? If it isn't, it ought to be.

Also, I think three years of interest on what they owe him can more than cover the cost of sending a check by registered letter.
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Mike Masnick (profile), 12 Oct 2012 @ 11:37pm

Re: Re: Re: Re: Good
If Sound Exchange has money that rightfully belongs to Gene Simmons, why don't they just give it to him?

It really is not that easy. They need him to verify who he is, so they know that they're giving money to the right person. So they try to "give it to him" by contacting him and telling him to register. But if he doesn't do that, they can't verify it... and can't give it to him.
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That Anonymous Coward (profile), 13 Oct 2012 @ 12:12am

Created to benefit themselves not those they are meant to "serve".
So is this the ever popular idea of opt out vs opt in?
Why should any artist have to put great effort into getting money collected for them? If you don't have the artists permission to gather the money, why are you doing it? Oh because you got a law passed to "benefit" the artists who have to jump through lots of hoops to make sure they can try to get what is supposed to be due them.

All of these things we have to do "for the artists!" and yet no thought is put into actually having it benefit those artists. We have to make sure these artists get what is due to them!!!! But we didn't built in any rules about actually making the money reach the artists.

Its like the charities that exploit images of starving children, it only takes the cost of a cup of coffee to save them. But for every dollar they get maybe 10 cents kinda sorta makes it towards those they are supposed to be helping.

If Sound Exchange wasn't sitting on a big pile of cash, they'd feel they had less power. And cash is tempting, so while everyone is distracted lets take another look at ways to increase our cash base so we can get more money "for the artists" so we can find ways to divert that cash into our coffers.

TPB trial demonstrates this with crystal clarity, the poor ripped off artists trotted out to get more money awarded... then the rug pulled out from under them when it is announced any money they get goes to the "rights" societies. Now get back in your mud huts, and make do with the scraps we let you have until we need your dirty faces for our next public appeal for cash.
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ex-insider, 13 Oct 2012 @ 12:44am

same song, different singer
This has been going on for decades w/r/t ASCAP, BMI, HFA and the rest. Usually, after a certain amount of time the unpaid funds get distributed pro-rata to artists/rightsholders who have signed up in proportion to their earnings that period from the collective (with the collective taking their usual administration fee or similar). The organizations spend a lot of time and effort on finding/contacting the rightsholders, many of whom are deceased (so finding heirs then), found but represented by a hard to contact company, transferred rights to a company that went under, etc. In a way, it's a variation on the orphan works problem. For foreign or smaller artists who haven't registered, they've probably left money on the table elsewhere too, which is surprising and unfortunate if you're currently a working musician (or user of the Internet and paying attention). For the more popular artists on the list posted to Digital Music News, it's hard to believe merely not signing up is the entire story.
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That Anonymous Coward (profile), 13 Oct 2012 @ 1:37am

Re: same song, different singer
is that like the list of owed monies in Canada the labels were using to keep track of who they needed to pay for compilation albums?
Some how they couldn't find time to go over the list and send out payments until they were sued.

What does the overhead they collect pay for if not making sure they keep track of the people they are supposed to be paying? They are part of an obviously broken system, but there is no reason to work and make it better because that could hurt their windfall.

Given the sheer number of collection societies around the globe each artist is supposed to sign up with, it is ridiculous. The societies made sense in a world where it was rare to get popular outside of a certain area, but its a global market... it might be time to just create a global society rather than 1000's of minor societies who have no reason to make the effort. But then they have to admit the market is global and they are to far into denying that to back out now.
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The eejit (profile), 13 Oct 2012 @ 1:49am

Re: Re: Re: Re: Re: Good
As much as IO despise SoundExchange's tactics, I think they're actually in the right on this one: if they don't have verification of the artists, then they should keep the money until it's proven otherwise.

To do anything else would be to open themselves up to accusations of fraud in everything. Right now, they're only fraudulent to independent artists.
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That Anonymous Coward (profile), 13 Oct 2012 @ 2:03am

Re: Re: Re: Re: Re: Re: Good
They should HOLD IN TRUST the money, saying keep just gives them reasons to not look so they can play finders keepers with it.
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Pete Austin, 13 Oct 2012 @ 2:30am

They should stop collecting the money
If SoundExchange only has the names of artists for, say, 75% of the money it takes, after making good efforts to collect more names, then it seems pretty clear that the others don't want it. So it should stop collecting the unwanted 25%, by reducing its rates..
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That Anonymous Coward (profile), 13 Oct 2012 @ 2:55am

Re: They should stop collecting the money
Oh they have the names... they just aren't sure the famous people really are the artists, or the desire to find lesser known people.
They should be allowed to collect more money so they can fund an inhouse study of methods to locate other acts owned money and methods they might be able to connect them with funds.

/s
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Anonymous Coward, 13 Oct 2012 @ 5:28am

Gene Simmons: the over-the-hill, past-his-prime has-been who resorted to doing reality TV. Just like Ozzy.
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Anonymous Coward, 13 Oct 2012 @ 6:03am

Collect Royalties for me? I am with BMI. I thought that was their job? No wonder I don't get paid!
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abc gum, 13 Oct 2012 @ 6:44am

Re: Re: Re: Re: Re: Good
" if he doesn't do that, they can't verify it... and can't give it to him."

Or, should not have "collected" it in the first place.
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abc gum, 13 Oct 2012 @ 6:53am

The answer is simple, disallow this "collection".
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Zakida Paul (profile), 13 Oct 2012 @ 8:22am

Where are the usual trolls who claim to be all about artists getting paid? This story is right up their alley.

Oh wait, it is not about the thieving freetard public or the Internet killing music.
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Anonymous Coward, 13 Oct 2012 @ 10:47am

Re:
Gene Simmons is also one of a few artists who publicly think that fans should be sued so he can continue funding an affluent rockstar lifestyle. He's better off without the money.
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dr evil, 13 Oct 2012 @ 10:53am

the solution is simple
all unregistered works belong to the people (and the interwebs) UNTIL registration, and until then NO fees may be collected. Puts the responsibility back on the rights holders! simples.....
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gorehound (profile), 13 Oct 2012 @ 1:04pm

All of my Art is freely given out.I am not doing it for money.I will not register with a spinoff of the frakken RIAA !
Screw You MAFIAA ! My Art will never be Registered with the likes of you.

www.bigmeathammer.com
Tons of free Audio and Video
Also shared on P2P
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btrussell (profile), 13 Oct 2012 @ 1:16pm

Re: Re: Re: Re: Re: Good
Imagine the e-mail they sent him.

Collect your share of hundreds of millions of dollars by registering with our site now!

Hurry! Sign up now before this offer ends!
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Anonymous Coward, 13 Oct 2012 @ 3:55pm

Re: Created to benefit themselves not those they are meant to "serve".
Dear SoundExchange,

You are hereby directed to not collect any payment from any other person, company or other entity on behalf of any and all members of the Artists-Are-Here company (henceforth known as AAH). Should you have collected any payment on behalf of AAH, that money is stolen property, taken without authorisation. You are hereby directed to return any such funds to the entities that you collected it from. The return of funds must be made in an expeditious manner. You have three months from the date of this letter. Should you fail to return such funds, you will be prosecuted to the fullest extent of the law, under the law against taking property under false pretenses.

Yours faithfully,

Joe Artist, manager of AAH
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Bengie, 13 Oct 2012 @ 4:44pm

Re: Re: Re: Re: Re: Re: Good
Or how about Sound Exchange can't collect royalties for artists without the artist first registering in the first place?
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Bengie, 13 Oct 2012 @ 4:49pm

I wish I was rich
1) Get rich
2) Lobby
3) Get law passed making your "non-profit" spin-off allowed to collect other people's income
4) Claim people aren't registering
5) Keep money

Must be awesome being rich. Make your own rules.
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PaulT (profile), 14 Oct 2012 @ 9:41am

Re: Re: Re: Re: Re: Re: Re: Good
Yep, both very good points I agree with.

If SoundExchange is collecting money on the behalf of others, there should be no way in hell they get to keep any unclaimed money for themselves. It should go into trust until those artists are located and registered, indefinitely. Allowing profit to enter as a possibility only encourages corruption, especially regarding foreign artists who may not have any knowledge of the organisation's existence let alone know the process of registering. If money is being collected "on behalf of" artists, then the collectors should be the ones doing all the work.

I can't see how it's not possible for them to verify the identity of people signed to major corporations, as most of the named artists in the article are. If it is that difficult, maybe they shouldn't be collecting for them in the first place. I can only imagine the howls of indignation if one of the scapegoated "pirate" sites were to have a similar practice, yet this is somehow OK.
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monkyyy, 14 Oct 2012 @ 1:55pm

Re: I wish I was rich
u may note that step 2-5 require a government, and basicly what is causing problems

interesting
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Anonymous Coward, 14 Oct 2012 @ 9:47pm

I believe various state unclaimed property laws handle this, unless SoundExcahnge purposely registered in a state with weak unclaimed property laws.
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