SoundExchange is a non-profit performance rights organization appointed by congress to pay digital royalties earned through play on Internet radio, satellite radio, cable TV music channels plus revenue collections from foreign societies. The organization recently distributed $54.8 million to recording artists and sound recording copyright holders in Q2 2010 payments, its largest ever quarterly payments. SoundExchange also recently joint ventured with AFTRA (American Federation of Television and Radio Artists) to identify and distribute SoundExchange royalties owed to AFTRA member recording artists who are not yet registered with SoundExchange. AFTRA will mail letters, send email notices and make direct person-to-person phone calls to all its members who are due royalties.

The following “New Artist Checklist” was created by SoundExchange to help answer artist questions regarding launching a career and protecting creative works. It’s not intended as a complete list or legal advice, but offers some good advice nonetheless.

New Artist Checklist

Register your copyrights
Copyrights to your original creative works exist as soon as you fix the sounds or words or notes to a medium (written down or recorded). But to secure additional legal rights, you must register your copyrights with the US Copyright Office. Electronic registrations can be processed much more quickly than mailed registrations. Also, sound recording and music composition recordings can be registered together, which, if you own both, is cheaper than doing them separately.

Draft an agreement between band members
In the glow of the creative process, it’s easy to forget to put things in writing. Write out an agreement in case issues come up at a later time (and they often do). The agreement should address the rights and responsibilities of the band members including who owns what percentage of the business, what property is owned or controlled by the business (including the band name, web site, and equipment) and who funds the bands and looks after its finances. Break out the percentage of ownership rights of each track – who wrote it? How will you split royalties? Discuss what will happen if band members depart, or new members join. Again, we suggest you consult a qualified attorney, to see if and when incorporation or a formal partnership would be recommended to help protect your assets. At any stage, it’s important to have some kind of written agreement in place.

Trademark your name and logo
The US Patent and Trademark Office oversees trade and service marks. Make sure no one else owns the rights to your name and/or logo and if not, be sure to register it. It may be your only way to prevent someone from claiming he or she owned the name first, or claiming to be you later. Registrations can be made in different “classes” to cover recordings, live performances, merchandise and other classes, so make sure you cover the bases. Registration costs can add up in a hurry, but a band or artist name and brand may become one of your biggest assets, so it’s well worth it to protect it early.

Form a company (or companies as necessary) for your label, songwriting/publishing, touring, merchandising, etc.
It’s important to look at your work as a small business, not just a creative hobby, and to get all your legal protections in place. Forming a company, partnership, sole proprietorship or LLC and keeping separate financial records can help ensure that you’re compliant with taxes and can protect your interests. At the very least, develop a system to track your expenditures and income, even if it’s just entering them into a notebook or spreadsheet. As your revenue streams diversify, you may want to consider some small business accounting software. A consultation with an entertainment attorney and/or an accountant is strongly recommended.

Pick a songwriting Performing Rights Organization and register – ASCAP, BMI or SESAC
If you’re a songwriter or publisher with a song copyright, you’re entitled to collect royalties from public performances of your musical compositions (for instance, the royalties that you are entitled to receive when the songs you wrote are played on the radio). ASCAP, BMI and SESAC take care of this kind of licensing, collect fees from them and pay them to you. They all cover the same copyright, so you only need to affiliate with one. Check out their websites and see which might be best for you.

Register with SoundExchange
If you performed on and/or own the masters of a sound recording, you can collect royalties from anyone who streams that track digitally (webcasters, satellite or Internet radio, etc). SoundExchange is the only organization designated by the US government to collect and distribute these royalties, so register now to claim your money. It’s totally free.

Arrange for Distribution
Set up an account for digital distribution with an aggregator like IODA, INgrooves, TuneCore, The Orchard or similar companies which allow you to make your music available to the public for digital downloading at popular sites like iTunes, Amazon and others. Be sure to properly enter all metadata accurately during this process since it will propagate everywhere after that. Understand the obligations, splits and commitments you make by entering into an agreement so that you know how it may limit other opportunities.

Embed metadata about each track into each digital file
If a music service opens your file or pops in your CD, and sees ‘Track 1’ and ‘Artist Unknown,’ you could miss out on royalties. While services and webcasters are supposed to report all the tracks they play, they’re busy, and you need to make it as easy as possible. Many millions of dollars have been earmarked for “promo only,” “self-released” and “artist unknown.” Include, at the very least, the artist or group name, copyright holder or label name, and track and album titles, and the ISRC number, if available. Most mastering software includes the ability to embed this data, and online services are available.

Buy/register your website address and social network domains
Start your online marketing and fan building by registering and creating your domain names. It’s common practice for vendors to buy up domains in hopes they’ll be able to jack up the price to sell them back to you when you need them, so pin down the names as soon as you can. Also, create your band’s official profiles on the various popular social networking and sharing sites such as MySpace, Facebook, Twitter, iLike and YouTube.

Check out organizations and associations which may benefit you
There are lots of groups out there doing great things for musicians. Not all of them will be right for you, but a few of them may be. Consider unions like the American Federation of Musicians and the American Federation of Television & Radio Artists, which represent a wide variety of musicians and performers, at all stages in their careers. Check out what groups like The Recording Academy and musicFIRST are doing to protect your work. There are also payment funds, including the Alliance of Artists and Recording Companies (www.aarcroyalties.com) and the AFM & AFTRA Intellectual Property Rights Distribution Fund (www.ahra.org/index_flash.html), which may have funds to offer for certain kinds of work you’ve done. Many regional and local organizations are also available, and many of these groups offer member benefits and discounts on services you may use. Educate yourself about all the associations which may be open to you, and find out what choices can help you advance your career.

Build your web presence
Use your site and social network profiles to sell merchandise, display a photo gallery, and dispense news updates and tour events. Keep the information fresh and interesting. Cross-link and expand your social network communications to drive fans to your website. Consider periodic email or other mass-blasts to keep your audience informed. Be authentic and consistent.

Get health and equipment insurance
You want to be able to rock on for years to come, so don’t take any risks. When you’re on the road or at gigs, equipment can disappear, so find affordable but adequate insurance. In addition to private companies, some labor unions and organizations, offer health plans, but do your research to find the right plan for you. Visit http://tinyurl.com/HINTprogram to check out the Health Insurance Navigation Tool (HINT) program—a good place to start looking, and get some free advice.

Build your team and assign responsibilities (merchandising, bookings, social media, accounting, licensing, publicity, email management, etc.)
Build your business by having the right helpers in place. Assign those tasks to the person or group best suited to them. Many online enhancements or replacements for hired help are available (SonicBids, CDBaby, TopSpin, ReverbNation, Rumblefish, FanBridge, Nimbit and others) which allow artists to take on many of these tasks themselves.

Create great music!
There is no substitute for creative productivity. This is what artists do. So create often and let your audience know what you’ve been up to. It’ll take a lot of work, but before you know it, you could be living the dream.