As President and CEO of SoundExchange, Michael Huppe wants to make sure that the organization’s identity and mission is clear. Beyond paying out royalties, SoundExchange works to ensure fair market rates for creators’ works by being a leader in the music industry’s participation in the Copyright Royalty Board’s rate procedures, and works to hold digital music services accountable by conducting audits and pursing legal action when necessary.
Under Huppe’s leadership, SoundExchange has distributed more than $6 billion in digital performance royalties and expanded its operations to serve both the recording and publishing communities.
“I think a lot of people sort of vaguely know what we do, but they don’t necessarily know the specifics,” Huppe says. “We pay out a lot of money to about 50,000-60,000 people, but there’s so much more that we do for the industry that I want to convey. We are constantly fighting to make sure creators get paid more fairly across the board, including publishers, songwriters, producers and artists. We advocate for higher rates, to try to get [creators] paid more fairly abroad. Through audits and things, we try to make sure people in the ecosystem on the services side are paying when they’re supposed to pay. I don’t want people to view us as just this entity that sends them checks once a month, but by everything else that we’re doing to try to make the industry a better place for artists and songwriters.”
MusicRow recently sat down with Huppe to talk about all that SoundExchange is doing to advocate for creators, and what he wants Nashville creators to know.
1) SoundExchange is heavily involved in the current WEB V proceedings that will determine the rates for non-interactive streaming.
Huppe: Every so often we go to a tribunal in Washington D.C., the Copyright Royalty Board, that sets the rates for the next five years of webcasting or satellite radio. Now is the time to talk about all this because we are in the middle of one of our big rate setting hearings. There will be a decision made by the end of the year on what commercial web casters pay to stream recordings on the internet. That’s another thing that we’ve done over time. We’ve consistently fought to get the rates up so the creators are paid fairly. We had a record decision two years ago, where overnight the rate for satellite radio went up almost 41%, which is really pretty amazing. Dec. 31 of one year they paid 11%, and on Jan. 1, the next day they paid 15.5%. That’s just sort of a sign of all that we do to try and make sure creators get paid as fairly as they can be.
We collect hundreds of millions of dollars a year and it’s really amazing the impact that a rate change could have. It’s a fraction of a penny for every stream, but that money adds up. We paid out almost a billion dollars last year on all of our royalties and we’ve calculated that a roughly one hundredth of a cent change in the rate can mean $15-$20 million more a year, and $80-$100 million over the five-year term. Little changes in the rate can make a big difference to what creators get paid.
2) SoundExchange has created Music Data Exchange (MDX) to help labels and publishers share information more efficiently.
Huppe: A lot of records get released and they’re still working on the publishing. The publishing doesn’t get cleared for 8-12 months, and interestingly enough, the more successful the record, the longer it takes for the publishing to get cleared. I’m not here to place blame on why that happens. We’re agnostic. We’re in sound recordings and we own a publishing company. We’ve worked for producers, so we love them all. The industry should not operate so that some of the frontline product routinely goes to market when you haven’t gotten the clearances. So we developed another tool called MDX where everybody can go and get a lot of these clearances on new releases to help solve that problem.
I would love for people, when they think of SoundExchange, to think “They’re just trying to make things work better. They’re trying to make the industry work better.” If the whole industry works better, everybody benefits, including all the people we pay. That’s something that drives us every day.
3) In a recent filing with the United States Trade Representative for its annual “Special 301” review of intellectual property rights protection, SoundExchange says that six countries (the United Kingdom, France, Australia, Japan, the Netherlands and Canada) deny full national treatment of American producers and performers.
Huppe: American music is the best music in the world, and it is the most popular. When you’re traveling around the world and you hop in a cab or go in a restaurant, chances are you’re going to hear American music. We are constantly fighting to make sure that American creators get paid fairly around the world. There is this concept called “national treatment,” and it’s a specialized term, but what it basically means is this: when a country rewards creators for their creative work, they shouldn’t discriminate against someone because of their nationality. In the U.S., we don’t do that. We treat everybody fairly. If we collect royalties from satellite radio, we will pay you the same whether you’re French or American. If we collect royalties from internet radio, we will pay you the same whether you’re Spanish or American. What we’re simply asking for is that we get the same courtesy around around the globe.
These just happened to be six countries that we are asking the U.S. trade rep to take a look at, but really it’s countries around the world. We’re just asking for fair treatment. Don’t discriminate against us in your country. You should treat American performers and American record labels the same way that you treat your own.
There are lots of countries that do give us national treatment—Brazil, Spain, Germany—they claim they don’t discriminate against American repertoire and we’re simply asking for the same treatment across the board.
4) SoundExchange has a free database of ISRCs [International Standard Recording Codes] available on their website.
Huppe: There are a lot of silos in the industry, there are many data challenges. It’s sometimes hard for people to know where they’re played. It should work better as an industry. So we bring tools to the table that remove friction and help the industry work better. One example is [our ISRC database]. The ISRC (the serial number of the recording) is great idea in principle, but as it’s rolled out, it’s very hard for people to use because there wasn’t a central place to go find the number in the recording. We have the best sound recording database in the world and we have made our codes available to everybody on our website. Why? Because that helps make commerce flow better.
5) All recording artists should be signed up to SoundExchange.
Huppe: If you are a recording artist or label, you should be signed up for SoundExchange. It’s free and we get money for anybody who is streamed on any of the platforms that we collect for: satellite radio, internet radio, Music Choice on your cable, even some of the business services, like DMX. This music is the backbone of their entire services; it’s what they base their entire business model on. They should operate their business, but there’s immense wealth being generated on the services and more of that really needs to trickle down to the creators—labels, artists, publishers, songwriters, all of them. They need to participate more in this wealth creation because they’re why everybody goes to these services.
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