SoundExchange

In-Depth Explanation

SoundExchange is a non-profit collective management organization in the United States that collects digital performance royalties for recording artists and master recording owners when their tracks are played on satellite radio, internet radio, and non-interactive streaming services. It is distinct from PROs like ASCAP and BMI, which pay songwriters and publishers.

How SoundExchange Works

SoundExchange administers statutory licenses under Sections 112 and 114 of the U.S. Copyright Act. It collects royalties from non-interactive digital services where listeners cannot choose specific songs on demand. Paying services include:

• Satellite radio: SiriusXM
• Internet radio: Pandora free tier, iHeartRadio, webcasters
• Cable TV music channels: Music Choice and similar services

Interactive platforms like Spotify and Apple Music negotiate directly with labels and do not pay SoundExchange. U.S. terrestrial AM/FM radio still does not pay SoundExchange for master recording royalties.

The Copyright Royalty Board (CRB) sets the per-performance rates that services pay. For 2026, SoundExchange and the National Association of Broadcasters (NAB) reached a settlement covering 2026 through 2030. Under this agreement, the non-subscription rate for commercial broadcasters rises to $0.0028 per performance in 2026, increasing by $0.0001 each year to reach $0.0032 by 2030. The annual minimum fee for broadcasters is $1,100 per station or channel in 2026.

For commercial webcasters, interim 2026 rates remain at $0.0025 per performance for non-subscription transmissions and $0.0032 for subscription transmissions until the CRB publishes its final 2026-2030 determination.

The 50/45/5 Distribution Formula

By law, SoundExchange distributes collected royalties using a fixed formula:

1. 50% to the sound recording copyright owner (usually the label, or the artist if self-released)
2. 45% to the featured artist(s) (the primary performer credited on the track)
3. 5% to a non-featured artists fund (administered jointly by SAG-AFTRA and the AFM for session musicians and backup singers)

Real-World Example

An independent, self-released artist has a track played 500,000 times on SiriusXM in 2026. At the interim commercial webcaster rate of $0.0025 per performance, SoundExchange collects $1,250 for those plays.

Because the artist owns both the master recording and is the featured performer, they are entitled to 95% of the total (the 50% copyright owner share plus the 45% featured artist share). The remaining 5% goes to the non-featured artists fund. The artist receives $1,187.50, paid directly to them by SoundExchange, bypassing any label or distributor.

If the artist had not registered with SoundExchange, that $1,187.50 would sit unclaimed. After three years, unclaimed royalties expire and are redistributed to other registered artists.

Why It Matters for Independent Artists

The 45% featured artist share is paid directly to the artist by SoundExchange. It bypasses the record label entirely, meaning the label cannot use it to recoup an advance. This is a protected income stream.

A common misconception is that digital distributors like DistroKid or TuneCore collect all royalties. They do not. Distributors collect mechanical royalties from downloads and interactive streams. They do not collect non-interactive digital performance royalties from SiriusXM, Pandora, or other services that pay SoundExchange.

If your music plays on digital radio and you are not registered directly with SoundExchange, your money goes unclaimed. Registration is free at soundexchange.com. You must register as both the featured artist and the copyright owner to receive the full 95% if you are self-released.

For international collection, a neighboring rights administrator can help collect similar royalties from foreign territories. Read our complete guide on SoundExchange Royalties: What They Are and How to Collect Them and Neighboring Rights: International Royalties You Are Missing.

Use our Streaming Royalty Calculator to estimate your earnings across platforms.

Related Terms

• Neighboring Rights
• Master Recording
• PRO
• Mechanical Royalties
• Advance