ABOUT SOUNDEXCHANGE.COM INC.
-for all the information please visit: www.soundexchange.com
What is SoundExchange?
SoundExchange is the first organization formed in the United States to collect performance royalties for sound recording copyright owners (SRCOs), featured and nonfeatured artists. SoundExchange is an independent nonprofit performance rights organization that currently represents over 3,500 record companies, their 6000 labels and thousands of artists united in receiving a fair price for the licensing of their music in a new digital world. Our members include small, medium and large independent record companies, as well as the major label groups and artist-owned labels.
Why was SoundExchange created?
SoundExchange is an independent, nonprofit performance rights organization that
is designated by the U.S. Copyright Office to collect and distribute digital
performance royalties for featured recording artists and sound recording
copyright owners (usually a record label) when their sound recordings are
performed on digital cable and satellite television music, internet
and satellite radio (such as XM and Sirius).
What licenses does SoundExchange
administer?
The Digital Performance Right in Sound Recordings Act of 1995 (DPRA) and the
Digital Millennium Copyright Act of 1998 (DMCA) granted a performance right in
sound recordings for certain digital and satellite transmissions. In exchange
for this new right, SRCOs are subject to a compulsory license for the use of
their music, provided the user complies with those conditions set forth in the
copyright law. 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.
What is a statutory license?
A statutory license is a license that is automatically granted by operation of
law to all parties that meet the conditions of the license (which are set forth
in the Copyright Act). A statutory license permits qualified parties to exercise
one (or more) of a copyright owner's exclusive rights without seeking permission
from the copyright owner or negotiating rates and terms with the copyright
owner. Statutory licenses may provide efficencies for statutory licensees as
they do not require parties using multiple copyrighted works to obtain separate
licenses from each copyright owner. Parties operating under a statutory license
are required to pay royalties rates that are established by law or regulation
and comply with reporting requirements, restrictions and various other terms
established by law. The statutory licenses relevant to digital music services
can be found in sections 112 and 114 of the Copyright Act, 17 U.S.C. §§ 112 and
114. The rates and terms applicable to the statutory licenses for digital music
services can be found in Chapter 37 of the Code of Federal Regulations, Parts
260, 261, 262, 263, 270 and 380
What digital music services are
covered by a statutory license?
The section 114 statutory license covers public performances by four classes of
digital music services: eligible nonsubscription services (i.e., noninteractive
webcasters and simulcasters that charge no fees), preexisting subscription
services (i.e., residential subscription services providing music over digital
cable or satellite television), new subscription services (i.e., noninteractive
webcasters and simulcasters that charge a fee), and preexisting satellite
digital audio radio services (i.e., XM and SIRIUS satellite radio services). The
section 112 statutory license covers ephemeral reproductions (i.e., temporary
server copies) made by all digital music services covered by the section 114
license as well as certain background music services that are exempt from paying
public performance royalties under section 114.
How do I obtain a statutory
license to publicly perform sound recordings or make ephemeral copies?
To obtain a statutory license, you must first notify sound recording copyright
owners by filing a Notice of Use of Sound Recordings Under Statutory License (
"Notice of Use") with the Copyright Office. All services must file a Notice of
Use prior to making the first ephemeral copy or first digital transmission of a
sound recording to avoid being subject to liability for copyright infringement.
In addition, all services that were in operation prior to April 12, 2004 and
intended to remain in operation after July 1, 2004 were required to file a
Notice Of Use with the Copyright Office by July 1, 2004, even if such service
previously filed a Notice of Intent with the Office. In the future, services may
be required to update their Notices of Use at regular intervals. The Copyright
Office expects to announce any such requirements when it issues final Notice and
Recordkeeping regulations sometime in the future. An original Notice of Use
along with 3 copies should be sent by certified mail (return receipt requested)
with a $20 filing fee to:
Copyright Arbitration Royalty Panel
Attn: Licensing Division
P.O. Box 70977
Southwest Station
Washington, D.C. 20024-0400
You will not receive any confirmation (other than a return mailing receipt, if
you request one) that your Notice of Use has been received by the Copyright
Office.
There is also no form license or agreement issued by SoundExchange that must be
completed and signed. Because the section 112 and 114 licenses are statutory
licenses, all rates and terms are set out in the Copyright Act and the relevant
regulations, see citations above. Once a service files its Notice of Use, it may
commence making digital audio transmissions, provided that it complies with all
of the terms and conditions of the statutory license and makes all payments and
files all statements of account and reports of use when due.
How would I qualify for the
statutory license and what is the performance complement?
There are a number of conditions to meet in order to qualify for the statutory
license. The performance complement (which limits the amount of times a
webcaster may transmit sound recordings from a specific artist or album during a
specific period of time) is one part of that qualification and all webcasters
must adhere to it unless they have received waivers from the owner of the sound
recording copyright. For all the details please see section 114.
How are rates set?
On November 30, 2004, President Bush signed into law H.R. 1417 known as the
Copyright Royalty and Distribution Reform Act of 2004. This act basically does
away with the CARP process and creates a new arbitration process for setting
copyright royalty rates and terms.
The Act, among other things:
Replaces the panel of ad hoc judges with three permanent Copyright Royalty
Judges
Provides for the judges to be paid out of appropriated funds rather than by the
participants to a proceeding
Extends the term for all Section 112 & 114 statutory licenses from two to five
years.
For more information on the Act visit www.copyright.gov/title17/ and click on
the link for Copyright Royalty and Distribution Reform Act of 2004.
Under the Copyright Royalty and Distribution Reform Act, "statutory rates" are
set through either voluntary negotiations or trial-type hearings before a panel
of three Copyright Royalty Judges. In negotiated cases, the interested parties
negotiate rates and present those to the Copyright Royalty Judges for adoption.
If the rates are adopted by the Judges, they apply to all similarly situated
parties. In the absence of negotiated settlements of rates and terms, the
Copyright Royalty Judges will conduct a rate setting arbitration to establish
royalty rates.
What will my rates be?
For rates, please go to the Service Provider Section of the webste and select
type of provider.
What forms do I need to submit?
Please check the DOWNLOAD FORMS section of the website.
I operate a small, noncommercial
internet radio station. Do I still need to submit recordkeeping information?
The Copyright Royalty Board determined in its October 6, 2006 ruling that ALL
webcasters need to submit recordkeeping information to SoundExchange on a
quarterly basis- regardless of their size or commercial status. [Please click
here to read the SoundExchange press release on this subject.] As this
requirement is retroactive to April 1, 2004, noncommercial services must submit
this information even if they have previously paid the “data and recordkeeping
fees” which are no longer available. Such fees will be credited to your account
against any current or future liability upon receipt of Reports of Use from the
corresponding periods.
Reports of Use must be submitted electronically, and are due within 45 days of
the end of each quarter.
For more information on how to compile and submit a Report of Use, please visit
the Reporting Requirements link in the Service Provider category under the
"Where Do I Start?" portion of our website.
What recordkeeping information do
I have to provide to SoundExchange if I'm operating under the statutory license?
Recordkeeping requirements have been established by the Copyright Office through
a notice and comment rulemaking. A statutory licensee must provide the following
information to SoundExchange:
name of the service making transmissions;
identification of the transmission category from one of eleven choices;
name of the featured artist;
sound recording title;
album title and marketing label OR International Standard Recording Code ("ISRC");
and
aggregate tuning hours, channel or program name, and play frequency OR actual
total performances.
The regulations were published in the Federal Register on March 11, 2004. To
read that order from the Copyright Office, click here.
For examples on where you may locate the data elements identifying particular
sound recordings required to be reported under Copyright Office regulations,
click on the desired example below:
Promo Singles
Full Length Albums
New Release Catalog Data
Compilations
I already pay royalties to BMI,
ASCAP and/or SESAC. Why do I have to pay royalties to SoundExchange also?
Every musical recording embodies two distinct copyrighted works. The first is
the underlying musical composition, comprised of the written notes and lyrics
(for purposes of copyright law, the musical composition is referred to as a
"musical work"). The songwriter and/or his or her music publisher usually own
the copyright in the musical work. The second copyrighted work is the actual
recording itself - the sounds, including the recording artist’s interpretation
of the musical composition, and the creative efforts of the producer, sound
engineers and background musicians. (This is referred to in copyright law as a
"sound recording.") The copyrighted recording brings to life the written notes
and lyrics of the musical work. A record label typically owns the copyright in
the sound recording.
SoundExchange collects and distributes royalties associated with the public
performance of sound recordings made by services operating under one of the
compulsory licenses. By contrast, ASCAP, BMI and SESAC collect and distribute
royalties associated with the public performance of musical works. A digital
audio transmission of a musical recording may require a license for both the
sound recording and the underlying musical work.
I'm going to start
streaming...what do I need to do?
Assuming your service is eligible for a statutory license, [see 'What digital
music services are covered by a statutory license?'], it is quite easy for your
service to satisfy the necessary requirements in order to begin streaming.
First, you must notify sound recording copyright owners of your intent to
operate under the statutory license by filing a Notice of Use of Sound
Recordings Under Statutory License ( "Notice of Use") with the Copyright Office.
All services must file a Notice of Use prior to making the first ephemeral copy
or first digital transmission of a sound recording to avoid being subject to
liability for copyright infrigement. In addition, all services that were in
operation prior to April 12, 2004 and intended to remain in operation after July
1, 2004 were required to file a Notice Of Use with the Copyright Office by July
1, 2004, even if such service previously filed a Notice of Intent with the
Office. In the future, services may be required to update their Notices of Use
at regular intervals. The Copyright Office expects to announce any such
requirements when it issues final Notice and Recordkeeping regulations sometime
in the future. An original Notice of Use along with 3 copies should be sent by
certified mail (return receipt requested) with a $20 filing fee to:
Copyright Arbitration Royalty Panel
Attn: Licensing Division
P.O. Box 70977
Southwest Station
Washington, D.C. 20024-0400
You will not receive any confirmation (other than a return mailing receipt, if
you request one) that the Copyright Office has received your Notice of Use.
There is also no form license or agreement issued by SoundExchange that must be
completed and signed. When operating under a statutory license, all rates and
terms are set out in the Copyright Act and the relevant regulations. Once a
service files its Notice of Use, it is free to begin making digital audio
transmissions, provided that it complies with all of the terms and conditions of
the statutory license and makes all payments and files all statements of account
and reports of use when due.
For more information on how to obtain and operate under the statutory license,
please explore the commercial and noncommercial webcaster categories under the
Service Provider link in our "Where Do I Start?" section of our home page.
Where can I get the technology to
track the data from the songs that I'm streaming?
At present, we are aware of just a handful of vendors that have developed
playlist tracking software. However, once the Copyright Office issues its
long-awaited regulations concerning reports of use, we anticipate that more
vendors will choose to offer the necessary technological solutions. If you are
interested in obtaining a list of the few vendors we are currently aware of,
please contact Chris Dean at
cdean@soundexchange.com.
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FOR MORE INFORMATION PLEASE VISIT http://www.soundexchange.com
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