SoundExchange is a nonprofit performance rights organization (PRO) jointly controlled by artists and sound recording copyright owners (labels). While other PRO’s collect and distribute royalties for live performance, radio broadcast, etc., SoundExchange does so for noninteractive digital transmissions on cable, satellite and webcast services.

What’s interesting about the way they work is that both the featured artist and the non-featured artist get paid. A featured artist is the performing group or individual performer who is identified most prominently in print on, or otherwise in connection with, the recording being performed. A non-featured artist is a player who performed auxiliary functions on a recording.

The royalties are divided in such a way that the artists receive 50% of collected royalties with the featured artist(s) receiving 45% of the artist share and the remainder of the artist share being divided amongest the non-featured artists. So even if you were a band member or session player, you might be due some royalties. The other 50% of collected royalties is distributed to the Sound Recording Copyright Owner. This is usually a label, but not always.

Read more about SRCO here.

SoundExchange recently issued a notice that they are currently holding unclaimed royalties for 9,000 artists and 2,000 independent labels for the period beginning February 1, 1996 and ending March 31, 2000.

If you think that yourself, your band, or your label might have royalties due for digital transmissions during that period you need to act. The first step would be to visit the List of Unpaid Artists or the List of Unpaid Labels and search for the name you think the royalties might be under. I made a quick check of those lists and found a number of bluegrass artists and labels on each list respectively.

If you find that you do have unpaid royalties you need to claim, you’ll need to register with SoundExchange no later than December 15, 2006. This according to Digital Music News. I had previously heard from an artist that the deadline was in October. Though I tried, I could find no mention of this deadline on the SoundExchange site. I attempted to reach them by phone but got only voicemail. When I do find some hard data on when the deadline is, I’ll post an update.

NOTE: SoundExchange is non-competitive with other PRO’s such as ASCAP, BMI, and SESAC. Membership in any of those does not preclude joining SoundExchange.

UPDATE (9/19/2006 – 4:58 PM): The kind people at SoundExchange just got back to me about the deadline date. The deadline is December 15, 2006. More information can be found here. (If you are on their homepage and couldn’t find the links like me, they are all the way to the right. I had to scroll over several inches to see them.)