UMG shifted Pandora royalties from SoundExchange ending Performer payouts

Universal Music is under fire for changes it made last year in how it pays Pandora royalties to artists, shifting to contractural rates instead of having 50% of the royalty flow to performers through SoundExchange.

CMU broke the story, which Hypebot has since confirmed, but the parties involved have so far declined to speak on the record.

Most record labels funnel Pandora payments through SoundExchange, which then includes performers as well as songwriters and rightsholders in its royalty calculations. Under US law, when money flows through SoundExchange, 50% is paid to the owner of the copyright of the recording, and 50% is paid to featured performers and session musicians.

Many artists who have had major hits written by others rely on SoundExchange funds to survive. That’s particularly true in the US, where performers are not paid for radio play.

The most vocal critics have been music managers opposed to the change and the lack of transparency surrounding it since UMG sent no announcement to the affected performers.

H/T: CMU

Bruce Houghton is the Founder and Editor of Hypebot, a Senior Advisor at Bandsintown, President of the Skyline Artists Agency, and a Berklee College Of Music professor.