SoundExchange was created by the RIAA in 2000 split and became independent and non-profit in 2003.
The organization has attracted criticism for applying to the Copyright Office to set disproportionately high royalty rates on Internet radio as compared to satellite and terrestrial services, leading some Internet broadcasters to cease operations.
I have not heard anything bad about this company from artists or musicians, however.
I find their business model interesting. They have legal authority to administer a compulsory license that covers all recorded music. (Note: as it relates to webcasters – Internet-only radio)
SoundExchange considers any digital performance of a song as falling under their compulsory license. If any artist records a song, SoundExchange has the right to collect royalties for its performance on Internet radio.
“The recent U.S. Copyright Office ruling regarding webcasters (Internet-only radio) designated SoundExchange to collect and distribute to all nonmembers as well as its members.
SoundExchange will collect Internet radio royalties for your song even if you don’t want them to do so.
“SRCOs (sound recording copyright owners) are subject to a compulsory license for the use of their music…SoundExchange was established to administer the collection and distribution of royalties from such compulsory licenses taken by noninteractive streaming services that use satellite, cable or Internet methods of distribution.”
So how it works is that SoundExchange collects money through compulsory royalties from Webcasters and holds onto the money. If a label or artist wants their share of the money, they must become a member of SoundExchange to collect their royalties.
I guess the pro’s for this are, if you are an artist/musician get signed up SoundExchange immediately.
I’ll let you figure out what the con’s are 😉