SoundExchange

What it collects

US copyright law gives the owners of sound recordings a performance right limited to digital audio transmissions. For non-interactive services — satellite radio, internet radio, cable and satellite TV music channels — that right is subject to a statutory license with rates set by the Copyright Royalty Board, and SoundExchange is the collective that collects and distributes the money.^[1][2] Interactive, on-demand streaming is licensed directly by labels and distributors and does not go through SoundExchange.

How the money is divided

The statute fixes the split of these royalties: 50% to the owner of the master recording, 45% to the featured artists, and 5% to non-featured musicians and vocalists, paid through a fund administered for the American Federation of Musicians and SAG-AFTRA.^[1] Because featured artists are paid directly, an artist who does not own their masters still receives their 45% without it passing through their label.

Registration

Both rights owners and featured artists must register with SoundExchange to be paid, and recordings are matched by ISRC. Since the Music Modernization Act, producers, mixers and engineers can also be paid a share directly when the artist files a letter of direction.^[2]

Questions

References

1. Legal Information Institute, Cornell Law School. “17 U.S. Code § 114 — Scope of exclusive rights in sound recordings.”
2. SoundExchange. “SoundExchange.”