PMApub / Academy lessons / Module 4

SoundExchange Splits: Rights Owner vs. Performer

By PMApub Academy · Last reviewed 2026-10-13 · About 6 min read

The Statutory Split at a Glance

For digital performance royalties collected under the statutory license, the law divides the money as follows:

These percentages come from the statute, but organizations and laws can be updated, so confirm them against SoundExchange's current published information. This split applies to royalties collected under the Section 114 statutory license for digital performances. It does not govern on-demand streaming income, label contract rates, or money collected abroad. When a recording has more than one featured artist, SoundExchange generally treats them as sharing the featured-artist portion equally unless they direct otherwise.

Rights Owner Versus Featured Artist

The rights owner is whoever owns the copyright in the sound recording. At a major or independent label, that is usually the label. For a self-funded release, it is the artist or the artist's company.

The featured artist is the performer whose name appears on the recording as the main act. This is a role about performing, not owning. The two roles are paid separately, even though in a self-released project both payments might go to the same person.

The Non-Featured Performer Share

Musicians who play on a record without being the headline act, such as session players and backing vocalists, are called non-featured performers. Their five percent is not paid out per track to each person by you. The statute splits it into two equal halves, 2.5 percent for non-featured musicians and 2.5 percent for non-featured vocalists, held by an independent administrator appointed jointly by sound recording copyright owners and the performers' unions, AFM and SAG-AFTRA, which then distributes to eligible performers.

This means you do not owe these players a cut of your SoundExchange income out of your own share. Of course, you may have separate agreements with musicians for session fees or other terms, which are a matter between you and them.

Separately, the Allocation for Music Producers (AMP) Act allows producers, mixers, and sound engineers to receive a share of Section 114 royalties, typically through a letter of direction sent to SoundExchange. The direction comes from the artist or owner, so it is a matter of agreement between those parties and the producer; check the current SoundExchange rules for how to submit one.

What This Means for a Self-Released Artist

If you fund, own, and perform your recordings, you hold two roles. You are the rights owner and the featured artist. Each role is registered separately and paid separately, so you need to claim both. By doing so you can collect the combined 95 percent portion that the law allocates to those two roles, with the remaining 5 percent flowing to non-featured performers.

Consider Maya. She records a song in her home studio, hires a backing vocalist for one session, and releases the track herself. Maya signs up as the rights owner for her label name, and as the featured artist under her artist name. If she only does one, the other half of her payout may go unclaimed. The backing vocalist's share is handled by the fund, not by Maya.

Setting It Up Properly

1. Pick a consistent label or imprint name for the master owner.
2. Register your account as rights owner, and add your recordings with their ISRCs.
3. Register as a featured artist and link your artist name to the same recordings.
4. If you use a company or LLC to own your masters, make sure the legal name matches your tax details.
5. If you have a label deal, check who the owner of record is and what your contract says about your share.
6. Keep contracts and split sheets in one folder.

The Music Monetization Plan Template can help you record who holds which role on each release, and ReleaseReady can help keep ISRC and label data consistent across your catalog.

For labels, managers, and teams

The statutory split is a recurring source of confusion on rosters, so document it in your contracts and your books.

Start with a rights matrix. For each release, record who owns the master (50 percent portion), who the featured artists are (45 percent portion), and whether any producer, mixer, or engineer has been promised a share through a letter of direction. The non-featured performer portion is handled outside your accounts through the independent fund, so it should not be deducted from the artist or owner shares.

Registration should mirror the matrix. The label registers as rights owner for masters it owns, and each artist registers as a featured artist. Do not assume the label's registration covers the artist. If an artist leaves, confirm who remains the owner of record for existing recordings.

When artists are signed, read the recording agreement for how the artist's feature share is treated. The statute directs the featured-artist share to the artist, so any contractual arrangement about advances or recoupment should be reviewed by counsel, not guessed at. Ask an attorney how the contract interacts with the statutory payment.

For multi-artist projects, agree in writing how the featured-artist portion divides. SoundExchange generally treats co-featured artists as equal unless directed otherwise, so put any different split in writing before registration.

Reconcile statements per release, store the contracts and split sheets in one place, and audit your registrations at least once a year for mismatched names, missing ISRCs, and expired contacts.

Common mistakes to avoid

• Registering only as the featured artist, or only as the rights owner, when you hold both roles.
• Believing you must pay session musicians out of the 5 percent portion. That portion is paid through an independent fund, not by you.
• Assuming the owner of the master automatically receives the featured-artist share. The statute pays those two portions separately.
• Treating the 50/45/5 split as applying to Spotify or other on-demand income. It applies to Section 114 statutory-license receipts.
• Registering under several spellings of a name or label, which scatters statements.
• Mismatched ISRCs between the distributor and the registration.
• Co-owned masters without a written agreement on how owners divide the owner share.
• Forgetting to update the registration when the label deal, ownership, or company name changes.

Action checklist

1. Identify the master owner for every recording.
2. Identify the featured artist or artists on each recording.
3. Record any producer, mixer, or engineer arrangements and send letters of direction where agreed.
4. Register as rights owner for masters you own.
5. Register as featured artist for recordings you perform on.
6. Use one consistent legal name for the owner account.
7. Enter ISRCs and confirm they match your distributor.
8. Write down splits for co-owned masters and co-featured artists.
9. Keep contracts and split sheets in one folder.
10. Review statements and fix errors each period.

Key terms

• Section 114 statutory license: the US license under which qualifying non-interactive digital services pay royalties for performing sound recordings.
• Rights owner: owner of the copyright in the sound recording; receives the 50 percent portion.
• Featured artist: main credited performer on a recording; receives the 45 percent portion.
• Non-featured performer: a session musician or backing vocalist who is not the headline act.
• Fund administrator: the independent administrator that holds and distributes the non-featured performer portion.
• AFM: the American Federation of Musicians, a union that helps appoint the administrator.
• SAG-AFTRA: a union of performers that helps appoint the administrator for non-featured vocalists.
• Letter of direction: a signed document telling SoundExchange to pay a share of royalties to another party, such as a producer.
• AMP Act: a 2018 law that allows producers, mixers, and engineers to receive Section 114 royalties via letter of direction.
• Statutory split: a division of money set by law rather than by private negotiation.
• ISRC: an identifier for a specific recording.