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In July, 2007, “an unsigned Reader’s Write accused Fred Wilhelms of having a vested interest in criticizing SoundExchange for not paying artists,” said p2pnet last month, going on »»»

The author later proved to be Dick Huey (right), one of the RIAA-appointed ‘label representatives’ on the SoundExchange board of directors.

An exchange of comments ended in Huey agreeing to answer questions put to him, partly in apology for what he acknowledged was an unjustified personal attack on Wilhelms

Huey’s responses have been a long time coming, but here they are, in part, at least »»»

Dear Fred,

This took longer to respond to than I wanted – both because of a busy couple weeks, and because we moved away from the topics where I have direct knowledge and into areas that require research on my part.

I’m not interested in being a SoundExchange conduit for every question you’d like answered – SoundExchange has official communication outlets, which you should engage directly with to answer your questions. I’ll focus on several key points, for the purpose of illuminating my own thinking – and thank you in advance for the good suggestions you have made so far – but I will not get in the middle of disagreements you may have with the organization.

I don’t speak on behalf of SoundExchange and my engaging with you in a limited discussion doesn’t obligate me to divulge what goes on with the board. In some cases, what you’re asking is not appropriate. The SoundExchange board works together toward the organization’s stated goal of distributing royalties to artists and copyright holders, but members represent different constituencies and do not share their motivations with everyone else. It would be irresponsible and unprofessional of me to speculate on their reasoning, or share anyone’s votes.

Every issue you addressed in your post is complicated, even the ones that look simple at face value, and many require a substantial amount of research. I *want* to answer some of your questions, even the hard ones, because they have good and solid answers. But we need to continue to do that in the spirit of a respectful exchange of ideas. I’m all for reasoned debate, and stepping out on the branch to have that conversation, as long as we keep this focused where it needs to be; working toward clarity and solutions. If this digresses into personal territory, that will be the end of our discussion.

With those preambles, on to answering some of your questions:

• re Artist Reps and RIAA control of the process – You’d be hard pressed to find an artist representative on the Soundexchange board who’s in any way beholden to the RIAA, that I can say from personal experience. What about the artist board members who represent performers organizations? Surely they’re responsible to their constituency of artists, many of whom are Soundexchange members? That said, I’ll reiterate that there is nothing stopping anyone from taking the step that other board members have taken – putting themselves up for board membership, and then pushing for the change they desire. As far as accountability to other artists, I understand your point about insularity and putting contact info up on the SX website, and will discuss this. The communications team at SX did mention reinstituting periodic, open– entry conference calls with a few board members at a time. This used to happen, but was discontinued due to lack of interest.

SX *did* start out as an RIAA offshoot, many years ago in a previous form and name. SX kicked off as a nonprofit organization long before I joined the board. That makes sense, after all: the organization set up to pay royalties out to artists and rights holders should be, and IS, run by the people it benefits and serves. SX sticks to that core mission, but I’ve seen the organization change since I started on the board, as a direct result of the inclusion of new faces and fresh ideas. My own efforts to create change and to drive policy within SX are listened to, and continue to push the organization in new directions. It is in this spirit that I continue to look for new ideas, and also in this spirit that I’m pursuing this dialogue.

• MusicFirst – I am glad we agree that the effort for a performance right for musicians and sound recording rights owners itself is a worthwhile goal. I am not on the MusicFirst committee, so my exposure to the issue is primarily at board meetings. Here’s what I know:
• Deductions authorized by the board from *member* proceeds are allowed under language in the membership agreements. The agreements apply only to members, not all royalty registrants. I believe the language is very clear.
• Soundexchange is not a 501(c)3, it is a 501(c)6. Here is a relevant explanation of SX’s mission, which I am comfortable with:

“Section 501(c)(6) entities are permitted to lobby on matters that are consistent with their tax exempt mission. SoundExchange’s tax exempt mission is NOT defined solely by the provisions of the copyright statute; indeed, SoundExchange corporate purposes and tax exempt mission are independent of that designation. All of SoundExchange’s relevant corporate documents speak to a mission broader than simply distribution of the current Section 114 royalties. For instance, SoundExchange’s tax exempt application speaks about dealing with legislators on “public policy issues of concern to copyright owners and performers.” SoundExchange’s 990 Form notes that SoundExchange “represents the interest of all copyright owners and performers.” And there are similar provisions in the SoundExchange bylaws. So SoundExchange attempts to benefit performers and rights owners through lobbying on performance rights matters is consistent with SoundExchange’s corporate purposes.”

• Even though the SX regulatory directive allows pool releases every three years, the board (including me) continues to vote to postpone the release date of unclaimed monies. This is overwhelmingly due to a genuine desire to register more artists and make sure they’re getting paid. I didn’t mean to suggest that this work should stop at any point, what I meant was the amount of money spent as the list of artists shrinks and the amount these artists are owed shrinks should be reflective of that. I agree with you fully – that work can never stop. See below, Communications section, for more on this.
• I understand you’re opposed to the size of the reserve. The critical point here is that the reserve is set up to pay – in full – any artist who signs a membership agreement, even if there’s been a pool release that contained that artist’s monies. Fulfilling SX’s mission, in this case, requires the reserve.
• Communications – I appreciate your suggestions in this area, and this is an area where I have consistently stepped forward. You are wrong about substantial numbers of artists not coming off the SX list, but I understand the info to figure that out isn’t on the website. EVERYONE at SX understands that there needs to be a better way to provide up– to– date information about artists that have come off the list, and artists that have been contacted but who simply choose not to respond or who never finish filling out forms, etc (there are a lot of those). The board is also looking forward to examining the status of these results at the next board meeting, and I and others will be paying close attention as we have at other meetings.

SX employs outside consultants with specific genre expertise to address the unregistered list (in addition to in– house staff such as Neeta, Shane, Rich and Sean). Lupe handles Latin, John Styll (former head of the Gospel Music Association) does gospel, contemporary Christian, and Nashville– based artists, John Kertzer (World, Folk, Blues, former Smithsonian and KEXP Radio DJ), Bill Holland (Jazz, bluegrass, estates)…

• small webcasters – I understand your point, understand there is a push/pull between monetization and artificial barriers. However, I think the problem is that letting people listen a lot doesn’t provide the same value, equally, to all artists. Smaller artists benefit more from pervasive play on the internet – larger ones, maybe not so much, especially if their inclusion and availability, at a cheap rate, means a lost sale somewhere else at a higher rate. Now I know there will be a million opinions on *that*, and I also believe that this inequality between artists is part of what drives differing opinions on what the rate for webcasters ought to be, but it’s the situation we have now. So this is currently not an equally balanced discussion for all artists, in my opinion.
• metadata – so, your primary concern regarding SX providing software – by the way, no one’s decided that’s going to happen yet, or really even discussed it, I haven’t even officially started the sub–committee! – is that the information will be utilized by members, but not by “non– members” who would be artists whose copyrights are controlled by labels or others? OK, that’s useful information to have. Will think about that one. I’d be curious if any radio station folk who are reading this feel the same way? I would like to get more than one perspective on this.

Regarding your specific suggestions for finding unregistered artists:

1 – This is a great suggestion, and one that SX has frequently employed in the past. It’s just wrong to say that SX hasn’t. EVERY NewsExchange newsletter, EVERY distribution memo asks for help in registering artists, as does SX outreach at conferences and festivals. SX Communications showed me a list that they used at this year’s CMJ where they had artists calling their friends, etc. CD Baby just completed a match for artists and blogged about the success. See above about inside– industry and artists contacts employed as outreach consultants.

2 – Also a great idea, and some parts SX has repeatedly done. Positive press and blog coverage has been a great source of bringing in artists and they have consistently gotten good responses. Online advertising is a cost concern, but I believe they have used remnant ad space whenever available to help push out the message. I am interested in the idea of a more organized street team, and will think about this in advance of our next board.

3 – SX did focus on creating a media and education strategy of this kind, and hired an outside group to handle it when there was concern about unclaimed royalties being released. That resulted in a lot of positive coverage. Those definitely weren’t puff pieces – I believe that SX has a lot of great people doing good work, and I think the stories reflected that. Now they have someone full time again doing this work – Laura.

Finally, you wrote:

“I didn’t ask what it “means to have consistently voted to authorize funding expansion in this area since getting to that place.” I asked if the way you put it meant that your votes were in the minority, and that more resources weren’t being used. It was a direct and simple question.”

The direct and simple answer is: I was in the majority.

I don’t think I ever said everything on the website is out of date – I think I said the website is out of date, especially the unregistered artists list. Now that SX has a communications department, and some very talented individuals, I expect a new website shortly that will at least be updateable without having to contact a company to do the updating (as has to be done now). The updates of the unregistered list will also be addressed in the upcoming website revision.

• SX reporting on track level data vs. a sampling of data – the vast majority of SX data *is* reported on track level data. In fact, 95% of the money distributed is based on census data. So the statement in absolute is not correct, but in practice, it is primarily correct. And it’s possible that that the sampled 5% disproportionately affects both the artists you represent, and the artists (and labels) I represent. So naturally, I’m interested in getting to 0% sampled data, which is one of the reasons I’ve established the metadata committee to review the feasibility of providing software to get past the inherent difficulties small webcasters (especially schools) face in reporting. I expect this committee to get into the trenches of this issue, and I welcome all opinions and suggestions in order come up with the best possible recommendation to the full board.

Best wishes, Dick

Stay tuned.

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