Digital performance royalties: The Basics

Digital royalties are fees that service providers such as Pandora, SiriusXM, and webcasters are required by law to pay for streaming musical content. These royalties (accompanied with playlists of all the recordings played) are paid by the services to SoundExchange. The digital performance royalty rates paid are set by the U.S. Copyright Royalties Board.

SoundExchange collects the royalties and then passes them on to artists and rights owners. Under the law, 45 percent of performance royalties are paid directly to the featured artists on a recording, and 5 percent are paid to a fund for non-featured artists. The other 50 percent of the performance royalties are paid to the rights owner of the sound recording.