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SoundExchange (SX) is a nonprofit organization that deals with performance rights and the distribution and collection of royalties on behalf of featured and non-featured artists and sound recording copyright owners, but not of songwriters and publishers. The channels it primarily deals with are noninteractive digital transmissions, which include broadcasts from satellite radio, Internet radio, as well as cable TV music channels. SX deals with all types of sound recordings that are eligible for royalties including comedy and spoken word recordings.
SoundExchange was founded in 2000 and became a wholly independent and nonprofit organization in 2003, which then made a deal with Sirius XM in order to set the standard for royalty rates for satellite radio broadcasts. SX also settled the standard royalty rates for webcasted songs in 2003.
SoundExchange emerged in the wake of the Digital Performance Right in Sound Recordings Act of 1995 and the Digital Millennium Copyright Act of 1998, before which sound recording copyright owners in the United States were not able to collect royalties from digital medium. As a result of these two laws, copyright law now requires that any user of music must pay the artist or copyright owner of the music or sound recording that is being played publicly through certain kinds of digital broadcasting. SX is the organization that interfaces with these digital distribution channels that publicly play sound or music from the artists who made them. Digital download is not included with this because it is not considered as "public performance."