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featured musician royalty payment
Published in: Copyright Law

Court Awards Featured Musician Royalty Payment

Under the DRPA, musicians are entitled to a featured musician royalty payment of 45% of the royalties — regardless of whether they have any copyright ownership interest.

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Featured Musician Royalty Payment (DRPA)

Featured Musician Royalty Payments
Under the DRPA, featured musicians are entitled to 45% of the digital streaming royalties for their songs.

Based on a recent ruling from the First Circuit, featured musicians earn 45% of the  royalty payments based on the Digital Performance Right in Sound Recordings Act (DPRA).  Featured musicians are the artists who are featured on the recording and not just the band named on the recording.  Under the DPRA, streaming services could be responsible for withholding payment of royalties to featured musicians for music they have been playing for years.

Under the Digital Performance Rights Sound Recording Act (DPRA), 17 U.S.C. § 114(g)(2)(D), featured recording artists are entititled to a 45% share of certain royalties generated by an album or song with a much smaller share going to non-featured artists. In Ithier v. Aponte-Cruz, 105 F.4th 1 (1st Cir. 2024), the Court held that the featured artists are the individual artists who is featured and performs on the sound recording, not a company who has no role in the actual performance.

Digital Performance Rights Act

By way of backgound, in 1996 Congress amended the Copyright Law, 17 U.S.C. § 101 to ensure that featured musicians were properly receiving their royalties from the digital transmission of those recordings.  Under the amendment, the musicians were entitled to a Featured Musician Royalty Payment of 45% when they were featured on songs — regardless of they had any ownership interest in the copyright in the songs. The statute provides that 45% of the featured musician royalty payment, would go to the “featured” artist; 50% goes to the copyright holder; and a much smaller percentage (5%) would go to a fund to benefit “non-featured” artists. The difference between the featured and non-featured artist is significant.

This ruling represents a significant step in ensuring that featured artists receive compensation for the digital transmission of their music, particularly when they are performing as part of band or group of musicians.

Different Types of Music Licenses

Typically, Royalties are negotiated between the copyright owner and the company using the or licensing the music.  Depending on your project, the type of music license can vary. The two types of music rights are typically divided between the Master Rights vs. the Composition Rights. Basically, the rights are divided between the composition of the work and the recording of the work.

The following are the typical types of royalties for use of the work:

  1. Streaming Royalties — recordings are licensed to streaming platforms, and payouts for digital streams are therefore royalties
  2. Neighboring Rights (and Royalties) — copyright holder for recording party or record label
  3. Digital Performance Royalties — payment for use on digital internet radio, satellite radio stations and cable radio
  4. Synchronization License (and Royalties) — payment for syncing the music to video for both composition and master.
  5. Public Performance License (and Royalties) — payment for performing the music in a public (commercial) setting, typically live.
  6. Mechanical License (and Royalties) — payment every time a copyrighted work is reproduced or distributed in either physical or digital form.

Often times the royalties will go to the recording artist(s), the record label, the distributor, the licensing company or sync agency, the songwriters, the publishers or the collective agency like ASCAP or BMI.

Impact of Case

The Court’s ruling could have significant implications for the music industry and for featured musicians who are entititled to the Featured Musician Royalty Payment:

  • The Ruling clarified the interpretation of “featured artist” under the DPRA, benefiting individual performers in bands.
  • The Ruling could lead to changes in how record labels and rights holders manage royalty distributions.
  • The Ruling reinforces the importance of properly identifying and compensating featured artists on recordings.

If you have any quesitons on how royalty payments work or how the DRPA will impact your royalty payments or your work as a musician or a band, please schedule an appointment with one of our intellectual property attorneys.