A producer credit or a percentage in a distribution deal does not automatically redirect a featured artist’s U.S. digital-radio royalties. SoundExchange requires a separate Letter of Direction, or LOD, from the artist whose share will fund that payment. The practical question before release is simple: whose artist share is paying the producer, and has that person signed the SoundExchange paperwork?
This is a narrow but consequential royalty lane. SoundExchange collects sound-recording performance royalties from eligible non-interactive services, including satellite and internet radio. It is separate from the on-demand revenue in a distributor’s Spotify or Apple Music statement, as our guide to the SoundExchange artist share explains. The producer LOD reaches the featured-artist portion of that radio income, not every royalty a producer might have negotiated.
One percentage can describe two different deals
Suppose a producer has a 10% participation in a recording’s distributor receipts. That agreement does not itself tell SoundExchange to pay 10% of the featured artist’s radio allocation. SoundExchange’s LOD guidance says the form’s percentage must be stated as a percentage of the featured artist’s share for each recording, rather than as producer points or a fraction of all recording revenue.
The distinction changes the arithmetic. If an artist’s SoundExchange allocation for a recording is $200 and the valid LOD directs 10% of that artist share to the producer, the instruction covers $20. It does not instruct SoundExchange to take 10% of the service’s total payment or 10% of the master owner’s allocation. The figures are an illustration of the direction, not a quoted per-play rate.
Write both percentages into the deal with their bases named. A label can reconcile distributor income and SoundExchange income only if it knows which pool each percentage applies to. Treat the LOD as a payment instruction that implements the artist’s agreed share, not as a substitute for the underlying producer agreement.
Features and groups change the signature count
SoundExchange says a producer seeking a portion of two featured artists’ allocations needs an LOD from each artist. If only one signs, the stated percentage applies only to that signer’s allocation. A guest feature therefore creates a real choice: is the producer paid from the lead artist’s radio share alone, or from both artists’ shares?
The signature rule also reaches groups. SoundExchange’s signature requirements say each group member who performed on the relevant recording must sign, unless each uses an authorized LOD signatory on file. A manager’s ordinary authority or power of attorney does not, by itself, make that manager the SoundExchange LOD signatory.
Do not use a producer LOD to settle a featured-artist split. SoundExchange treats two featured performers as collaborators and allocates their artist share between them; its LOD process is for eligible creative participants such as producers, mixers and engineers. Set the featured-artist allocation first, then decide what each artist directs to the producer.
File a recording-level instruction before the money moves
The required packet includes a signed LOD and a repertoire chart naming each recording, its effective date, its payment percentage and its International Standard Recording Code (ISRC) when available. An electronic signature made through a signing service needs its completion certificate or equivalent. Missing documents delay activation; SoundExchange says a complete, valid LOD takes at least two weeks to process.
That makes the release checklist concrete. Confirm the producer’s legal payee, identify every featured performer, agree which artist allocations fund the participation, and put the correct ISRCs and effective dates on the chart. Keep the signed deal and the submitted instruction together with your catalogue records. Our metadata failure checklist shows why matching recording identifiers matters beyond this one collection route.
For a label using InterSpace Distribution or ToneGrid, the useful control is a split record that distinguishes distributor receipts from outside neighboring-rights collections. The dashboard can show the former; the SoundExchange LOD governs this particular artist-share payment. Make that separation explicit before anyone expects a producer payment from the wrong statement.
