Answers/Glossary/Digital performance royalty
Glossary · Royalties
Digital performance royalty
A digital performance royalty is the payment owed for publicly performing a sound recording over a non-interactive digital transmission — Pandora radio, SiriusXM, internet radio. In the United States it is collected by SoundExchange, which is free to register with.
The United States has no general public performance right in sound recordings for over-the-air AM/FM radio. A song played on terrestrial radio pays the songwriter through ASCAP, BMI, SESAC or GMR, and pays the performer and the master owner nothing at all. Congress created a narrower right for digital transmissions only, and that is what a digital performance royalty is.
SoundExchange is the single organisation designated to collect it in the United States. It covers non-interactive services — Pandora's radio stations, SiriusXM satellite radio, internet radio simulcasts, background music services — where the listener cannot choose the exact track on demand. Registration with SoundExchange is free; SoundExchange's own registration page says "Registering is free, simple, and fast." SoundExchange does not publish a payout threshold, so I do not quote one.
Under 17 U.S.C. 114(g)(2) the statutory split is fixed: 50% to the owner of the sound recording, 45% paid directly to the featured artist, and 5% to the AFM and SAG-AFTRA Intellectual Property Rights Distribution Fund for non-featured musicians and vocalists. The 45% goes to the artist even when a label owns the master, which is unusual and genuinely artist-friendly.
The misunderstanding: people assume Spotify and Apple Music pay through SoundExchange. They do not. On-demand streaming is interactive, and your distributor collects that recording income. If you only ever look at your DistroKid dashboard, digital performance royalties are invisible money you are not registered to receive.
I release music for a living and check my own statements; treat this as field notes, not legal counsel.
Related terms
- SoundExchangeSoundExchange is the United States organisation designated to collect and distribute the digital performance royalty on sound…
- Sound recording royaltyA sound recording royalty is income earned by the specific recorded master of a song, as opposed to the underlying composition.
- Performance royaltyA performance royalty is the money owed when a musical composition is performed publicly — on radio, on television, in a bar, at…
- Sound recordingA sound recording is the fixed capture of a performance — the master — protected as its own copyright separate from the…
Answers that use this term
- Where Does the Money From One Stream Actually Go?One stream of one song generates money in four separate places at once: the recording royalty (collected by your distributor)…
- What Is SoundExchange and Do Independent Artists Need It?SoundExchange collects the digital performance royalty on the sound recording from non-interactive services — Pandora radio…
- What Is a Performance Royalty, and Who Collects It?A performance royalty is money owed when a musical composition is performed publicly — on streaming, radio, television, in a bar…
Definitions on this site describe the United States system. I am an artist who has been through this, not a lawyer.
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