What Is a Letter of Direction in Music?
A Letter of Direction (LOD) is a formal document that instructs a performing rights organization or digital royalty collection society — most commonly SoundExchange — to split and distribute royalties among multiple parties. Without an LOD, SoundExchange pays all digital performance royalties directly to the artist of record, with no mechanism to route a producer's or featured artist's share separately.
Why SoundExchange Requires an LOD
SoundExchange collects and distributes digital performance royalties for non-interactive streaming services: Pandora, SiriusXM, iHeartRadio, and internet radio stations. By default, SoundExchange pays the “featured artist” and the “sound recording copyright owner” separately — but it does not automatically split payments between a featured artist and a producer, or between multiple collaborators who share the master recording.
If your producer, featured artist, or label partner needs to receive their share directly from SoundExchange rather than waiting for you to pay them out, an LOD is the mechanism that makes that happen.
Who Needs a Letter of Direction?
An LOD is necessary any time someone other than the primary registrant on a SoundExchange account has a claim to master recording royalties from digital performances. Common scenarios include:
- A producer who holds a percentage of the master recording
- A featured artist whose contribution entitles them to a portion of the master share
- A label partner who holds distribution rights and a royalty percentage
- An engineer or mixer who negotiated a backend royalty point
What Information Goes in an LOD?
A complete Letter of Direction for SoundExchange includes:
- The song title and ISRC number
- The primary SoundExchange member number (the account directing payments)
- Each recipient's legal name and SoundExchange member number
- The exact percentage each party should receive
- Authorizing signatures from all relevant parties
LOD vs. Split Sheet: What's the Difference?
A split sheet documents the ownership percentages agreed upon between collaborators — it's the foundational legal agreement. A Letter of Direction is the operational instruction sent to SoundExchange (or another royalty society) directing them to split and route payments accordingly.
You need both: the split sheet establishes the agreement; the LOD operationalizes it with the royalty collection body. The two documents work together, which is why musicsplitsheets.com offers a Split Sheet + LOD bundle on a single PDF for $5.
Does the LOD Work with International Neighboring Rights Societies?
Yes. The LOD format is compatible with neighboring rights societies beyond SoundExchange, including PPL (UK), SCPP (France), GVL (Germany), SENA (Netherlands), and others. The direction table and authorization fields follow the standard format recognized across these organizations.
When Should You Submit an LOD?
Submit your LOD as soon as the song is registered with SoundExchange — ideally before the release date, so royalties are routed correctly from the first payment cycle. Retroactive LODs can redirect future payments but cannot recover royalties already distributed.
Frequently Asked Questions
Does SoundExchange require an LOD on a specific form?
SoundExchange accepts LODs that include the essential fields: song/ISRC identification, member numbers, percentage breakdown, and signatures. There is no single mandated template, but the document must clearly identify all parties and their designated percentages.
Can an LOD be submitted digitally?
Yes. SoundExchange accepts scanned or digitally signed PDF documents. The LOD generated by musicsplitsheets.com can be signed via DocuSign, Adobe Acrobat, or any PDF signing tool and submitted directly to SoundExchange or your neighboring rights society.
What happens if I don't submit an LOD?
Without an LOD, SoundExchange pays the master recording share to a single registered account. If a producer, label, or featured artist is owed a percentage, they would need to rely on the primary account holder to pay them out manually — creating delays, trust issues, and potential disputes. Submitting an LOD ensures each party receives their share directly and on schedule.
Is an LOD the same as a producer agreement?
No. A producer agreement (or beat lease) establishes the terms of the production deal. An LOD is specifically for instructing a royalty society how to distribute digital performance payments. You may need both: the producer agreement defines the split; the LOD operationalizes it at the collection society level.
How do I get a Letter of Direction?
The easiest way is to use the Split Sheet + LOD bundle at musicsplitsheets.com. Fill in your song details and party information, pay $5, and download a custom two-page PDF: your split sheet on page 1 and your LOD on page 2, both pre-filled with your information and ready for all parties to sign.