Royalties Owed to Jazz Musicians

A little paperwork can go a long way when it comes to claiming a portion of $40 million royalty payment. Over 30,000 performers have yet to register with SoundExchange (SX), a nonprofit, government-licensed organization whose mission is to collect and distribute royalties on behalf of recording artists and labels, to claim their portion of this allocation.

If these artists do not register with SX by July 31, they will forfeit their rights to their royalties, in accordance with regulations issued by the U.S. Copyright Office. The office established regulations that artists have three years after SX identifies them as recipients of unclaimed royalties before their royalties can be forfeited and spread out among the other artists, according to SX Executive Director John Simson.

“However, the Board of Directors may make a further recommendation to extend the deadline when they meet in June… My feeling is they will extend the deadline one more time,” Simson said. He also warned that any sort of action by the Board of Directors is unsure. “I really urge anyone to claim by July 31 because there is a chance they may lose it.”

The organization’s Board of Directors decided in November to extend the deadline from Dec. 31, 2004 until July 31, 2005, giving performers more time to register with SX before losing their share of royalties for broadcasts from the years 1996-2000.

SX is unique from other artist copyright organizations such as ASCAP and BMI because SX collects revenue for owners of the sound recording rather than for the owners of the copyrighted musical work, i.e. the song itself. SX was created in response to 1995’s Digital Performance Right in Sound Recordings Act; before 1995, U.S. copyright law did not provide a performance right for sound recordings.

SX handles royalties for cable and satellite subscription services (DMX, Music Choice, Muzak), noninteractive webcasters (such as internet-only radio stations and retransmissions of FCC-licensed stations) and satellite radio services (XM and Sirius). SX does not administer royalties for digital downloads or traditional analog performances, including television and radio.

The 1995 Sound Recordings Act and the subsequent creation of SX are of particular importance to jazz and other niche musicians because so much of their repertoire is from preexisting work, for which only the original composer would receive royalties from prior to 1995. “Why should the songwriter get paid and the artist doesn’t?” Simson asked. “It’s exciting that for the first time, we now have these rights.” David Sanborn, a member of the Board of Directors concurred, adding that SX pays royalties to sidemen on records, a concept not previously heralded by royalty organizations.

Many of the artists who are owed royalties simply do not know these royalties exist. “My largest unpaid list has a huge amount of Latin and other types of music, such as Hawaiian, that aren’t as likely to be getting royalty checks [from record companies]. They’re getting a ton of play online but not as much from record sales,” Simson said. Since these artists are smaller with a limited audience, “I can’t just call their law firm,” to get in touch with them, he added.

“It’s like playing Six Degrees of Kevin Bacon” to try and contact the musicians who have yet to register, Simson said.

Sanborn added, “On the internet and with satellite [radio], there’s a lot of music, especially blues and jazz, being downloaded. This is a way for these musicians to make some money off of it. There’s no upfront cost so it’s like ‘found’ money.”

SX was originally created as an unincorporated arm of the Recording Industry Association of America in 2000, but has been an independent non-profit organization controlled by a board of artists, artist representatives and record label representatives since September 2003. Since its establishment in 2000, SX has paid out almost $16 million for about 6,000 members and the amount is expected to be around $40 million in 2005.

Some of the musicians who stand to collect their portion of these royalties, but have yet to register with SX, include Walter Beasley, Tony Mottola (whose estate will benefit since he died in 2004), Ronnie Jordan and rock group Luscious Jackson.

More information is available at SoundExchange’s website.

Originally Published May 23, 2005