by : June 2008, Music Law

Performance Royalties In New Media

How do artists collect royalties when their sound recordings are performed on digital cable, satellite television, Internet and satellite radio?
Artists collect their royalties through an independent, non-profit performance rights organization called SoundExchange. It represent over 3,500 record companies and their 6000 labels, and therefore thousands of artists licensing their music for noninteractive streaming services that use satellite, cable or Internet methods of the digital age.
SoundExchange is the first organization formed in the United States to collect performance royalties for sound recording copyright owners (SRCOs), featured and nonfeatured artists. The latter is important, for sidemen in a record are at last recognized as parties in the collection of these royalties. The Digital Performance Right in Sound Recordings Act of 1995 (DPRA) and the Digital Millennium Copyright Act of 1998 (DMCA) granted a performance right in sound recordings for such transmissions.
SoundExchange also collects and distributes royalties from statutory licenses, including: (i) digital cable and satellite television services (Music Choice and Muzak), (ii) noninteractive “webcasters” (including original programmers and retransmissions of FCC-licensed radio stations by aggregators), and (iii) Satellite radio services (XM and SIRIUS).
It does NOT administer royalties for (i) interactive performances of sound recordings (e.g. “on-demand” services that allow the listener to select the tracks they wish to listen to and/or the order in which they wish to hear them); (ii) the reproduction right for sound recordings, e.g. digital downloads; (iii) licenses for interactive performances or reproduction of sound recordings must be obtained directly from the SRCO; and (iv) analog public performances (traditional radio and television).

by Sarah Demarco

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