SoundExchange is the US non-profit that Congress designated to collect and distribute digital performance royalties on sound recordings. In plain terms, a recording played on internet radio, satellite radio or digital cable music channels generates a payment that gets collected, split and routed by SoundExchange to the people who own and performed that recording. It has nothing to do with Spotify or Apple Music payouts.
The confusion is understandable. Almost every artist hears “streaming royalties” and assumes one system pays everything. There are at least four, handled by four different collections, and this guide explains how SoundExchange royalties work for streams so you can tell which one applies to your catalogue.
Registration is free, and the whole process takes about half an hour once you have your paperwork together. What matters more is that unregistered money keeps accruing whether you claim it or not, so the cost of waiting is real. As of 2026, that backlog is measured in years of plays for a lot of independent catalogues.
Table of Contents
- How SoundExchange Royalties Work for Streams
- What Is SoundExchange and What Does It Collect?
- What Counts as a Stream?
- How Are SoundExchange Streaming Royalties Calculated?
- Who Receives the Money?
- How Do Stations and Streamers Report Usage?
- Why Can’t SoundExchange Give Me a Fixed Per-Stream Rate?
- How to Check and Improve Your Royalty Reporting
- 1. Confirm you actually own master rights
- 2. Register the exact legal name
- 3. Match every recording by ISRC
- 4. File your letter of direction if you produced or engineered
- 5. Register non-featured performers through the correct funds
- 6. Read the statement line by line
- 7. Search for unclaimed money in the same sitting
- 8. File disputes properly and early
- Frequently Asked Questions
- Does every internet radio stream earn a SoundExchange royalty?
- Is SoundExchange the same as ASCAP, BMI, or SESAC?
- Do artists receive SoundExchange money directly?
- Why does my SoundExchange statement not show a fixed amount per stream?
- Can I claim a SoundExchange royalty for playing music on my station or stream?
- Does SoundExchange pay for Spotify or Apple Music streams?
- Conclusion: Start With the Correct Royalty Type
How SoundExchange Royalties Work for Streams
A SoundExchange royalty is a performance payment for the public playing of a sound recording on a non-interactive service, collected under the US statutory licence for digital audio transmissions.
That licence comes from section 114 of the US Copyright Act. Because Congress did not want streaming services negotiating separately with every label and artist, it set a compulsory licence with rates decided by the Copyright Royalty Board. Anyone who meets the conditions and reports their usage can play music without clearing song by song, and pays into the system instead.
SoundExchange was formed in 2003 to operate that collection on behalf of music users and the copyright owners it pays. Today it is the central administrator for the statutory and voluntary digital performance royalty system covering internet radio, satellite radio, digital cable, satellite television audio-only channels and similar services.
How SoundExchange royalties work for streams, step by step
- A service transmits a recording. A listener starts a stream on an internet radio station, a satellite channel or a cable music channel.
- The music user reports the performance. The service logs what was played, when, and to how many listeners, then passes that usage data on through the reporting chain.
- SoundExchange receives the royalty money. The service pays the applicable statutory rate on the revenue it receives from subscriptions, advertising or listener donations.
- Performances get matched to recordings. SoundExchange matches reported plays to registered recordings using ISRCs and title, artist and writer information. Anything that does not match sits unclaimed.
- The balance is split and paid. After an administrative fee is deducted, the remainder is distributed as a 50/45/5 split among the rights owner, the featured artist and non-featured performers.
Every one of those five steps can fail quietly. That is why a registered artist sometimes receives nothing after months of steady plays.
What Is SoundExchange and What Does It Collect?
SoundExchange is a performing-rights organisation for one specific right: the right to publicly perform a sound recording digitally. It is not a record label, not a distributor and not a streaming platform.
Every song carries two separate copyrights, and almost all royalty confusion comes from mixing them up.
| Copyright | What it covers | Who collects it |
|---|---|---|
| Sound recording copyright (the master) | The particular recorded performance of a song | SoundExchange for digital performances; the master owner directly for other uses |
| Composition copyright (the song) | The lyrics and melody themselves | ASCAP, BMI, SESAC, GMR or Songtrust for performance; the mechanical licence or HFA for mechanicals |
If you wrote the song but a session player recorded it, the composition income is yours and the master performance income goes to whoever owns that recording and performed on it. Getting those two lines crossed is the single most expensive mistake an artist makes with registration.
SoundExchange collects only from digital public performance of sound recordings. It does not collect streaming on-demand revenue, mechanical royalties, sync fees, physical or download sales, or performance royalties for the composition itself.
What Counts as a Stream?
For SoundExchange purposes, a stream is a reported public performance of a sound recording. It is not a click, not a listener and not a song spin on a playlist the listener chose. It is a transmission of a recording to a listener, counted in listener-runs, and only counts if it is reported into the statutory system.
The decisive question is whether the listener can choose what plays next.
| Feature | Non-interactive streaming | Interactive streaming |
|---|---|---|
| Listener control | The service picks the music | The listener picks the music |
| Typical services | Internet radio stations, SiriusXM, digital cable music channels such as Muzak, some satellite television audio-only services | Spotify, Apple Music, Tidal, Amazon Music, YouTube Music, Pandora in on-demand mode |
| Examples of a counted unit | A listener-run during a two-hour station broadcast | A single play of a chosen track |
| Who pays the sound recording owner | SoundExchange, under the statutory or voluntary agreement | The platform directly, through the distributor, negotiated commercially rather than by statute |
| Rate basis | Per-song per-listener rate set by the Copyright Royalty Board | Pro-rata share of subscription and advertising revenue, with a user-centric or artist-centric model depending on the platform |
That table is the answer to the most common mistake. A Spotify play does not generate a SoundExchange royalty at all, even though every Spotify user has heard of SoundExchange by now. The money for that play travels through your distributor’s account, not through the statutory system.
Note the Pandora nuance. Pandora’s radio mode is non-interactive and pays statutory performance royalties, while on-demand sessions are negotiated directly. Two different systems inside one app.
How Are SoundExchange Streaming Royalties Calculated?
SoundExchange streaming royalties are calculated from the number of reported performances of a sound recording multiplied by the applicable statutory rate for the service type, then adjusted for how that revenue is split between subscribers and non-subscribers, before an administrative fee is taken.
The mechanics underneath that formula are specific. The Copyright Royalty Board sets rates by service category, commonly expressed per song per listener, so a longer track played by more listeners generates more. For internet radio, the board has separated rates for subscription and non-subscription services because advertising-supported listening produces less revenue per user than a paid subscription.
So a play on a free-supported station is worth a fraction of a play on a subscription service, even though both are one listener-run. This is not a quirk or an error. It reflects how the underlying revenue actually arrives.
Satellite radio works differently again. It is generally reported as a percentage of revenue rather than as individual listener-runs, which means the money is allocated across what actually played, without a public per-play tally.
Four things then stand between that revenue and your bank account:
- The administrative fee. SoundExchange deducts a percentage of collected revenue to cover administration, and that comes out of the distributable pool before anything is allocated to owners.
- Matching accuracy. Unmatched performances are not distributed at all. They become unclaimed money.
- Territory. The statutory system is a US system. It does not collect for every country.
- The reporting period. Usage data, statements and payments are cycle-based, so the amount attributable to a given month is not the same as the amount that lands in your account that month.
Set expectations carefully. Statutory webcast rates land in fractions of a cent per listener-run. Even a well-played track across a busy station can produce a payment that looks absurd next to the play count, and that is normal rather than an error in your metadata.
Who Receives the Money?
After the administrative fee, SoundExchange splits the distributable balance three ways. This split is the part most people get wrong, because the label does not simply take everything.
| Share | Recipient | How it is identified |
|---|---|---|
| 50 percent | The sound recording rights owner | The label, distributor account owner or self-releasing artist registered against the recording |
| 45 percent | The featured artist | The artist registered on the recording, usually by name and ISRC |
| 5 percent | Non-featured performers | Distributed through the AFM Intellectual Property Rights Distribution Fund and the SAG-AFTRA Fund, based on session musician reporting |
On a self-released recording the rights owner and the featured artist are usually the same person, which means 95 percent of the distributable balance comes back to you. On a label deal, 50 percent goes to the label as owner of the master and 45 percent to you as the featured artist.
Producers, mixers and engineers
Producers and engineers do not get a share automatically. They get paid by filing a letter of direction, most commonly the Featured Artist Letter of Direction, that tells SoundExchange which recordings and which share they are claiming. Until that paperwork is on file, the money sits with the registered parties or goes unclaimed.
Background singers and session players generally do not appear on a SoundExchange registration at all. Their 5 percent share reaches them through AFM and SAG-AFTRA fund reporting, which is a separate process with its own paperwork. Cover artists and session musicians consistently describe SoundExchange as the only route to any income at all from non-interactive streaming, and for many that is exactly right.
What happens to money you never claim
Performances that cannot be matched are not destroyed. They are held and can surface later, and a substantial body of it sits with the United States Copyright Office under what is commonly called an Address Unknown filing, searchable through the NOI Lookup database. A surprising number of artists discover multi-year back catalogues that way shortly after registering.
The lesson is unglamorous. The longer you wait, the harder the matching becomes, because old ISRCs and split information get harder to reconstruct as people change names, bands break up and paperwork moves between storage boxes.
How Do Stations and Streamers Report Usage?
Stations and streamers report usage in a chain, and each handoff is a place where royalties get lost.
First, the music user, meaning the station or service, logs every performance. Song title, artist name, ISRC where available and the number of listeners are all recorded at that moment. That log is the raw material for everything downstream.
Next, the music user reports to its collection organisation, which may be SoundExchange itself for direct licensees or a designated collection agent handling smaller stations. From there the usage data lands with SoundExchange, which attempts to match it to registered sound recordings.
Finally, matched performances generate a payment to the registered parties. Unmatched performances go to unclaimed royalty status.
What makes this fragile is metadata quality at the first step. A station that plays “Artist – Title” with a typo in the artist name, a missing ISRC or a truncated title produces a report that cannot be matched even though the play is perfectly legitimate. The money exists; the paperwork simply cannot find it.
This is why cover bands and independent artists hit the same wall repeatedly. The recording plays, the station logs it, and the log does not line up with the registered catalogue. Nothing flags it, and the balance quietly accumulates as unclaimed money.
Why Can’t SoundExchange Give Me a Fixed Per-Stream Rate?
Because there is no fixed per-stream rate for statutory digital performance royalties. The amount depends on the service category, the rate set in Copyright Royalty Board proceedings for that category, whether the listener is on a subscription or supported by advertising, the administration deducted, and how well the performance matched to a registered recording.
People ask for a single number because streaming platforms usually publish one. Apple Music and Spotify will tell you, with caveats, what a stream yields under their own models. The statutory system was never built that way.
It distributes a pool. Each pool comes from a different revenue source with a different structure, and the board sets rates per song per listener rather than a flat per-play figure. Add satellite radio, which works on a revenue-share basis instead of counted plays, and you have several legitimate calculation methods inside one organisation.
There are further reasons a single number would be misleading: agreements differ by licensee, royalties are collected in the currency of the transaction and converted, administrative costs reduce what is distributable, territory limits mean some listeners are not represented, and reporting quality varies between operators. Anyone quoting you a confident cents-per-stream figure for SoundExchange income is guessing.
How to Check and Improve Your Royalty Reporting
Most SoundExchange shortfalls come down to registration and metadata rather than rate disputes. This checklist is what actually moves the number.
1. Confirm you actually own master rights
Read your recording contract. If a label or producer owns the master, the 50 percent share is theirs and your path runs through their royalty accounting, not a direct SoundExchange claim.
2. Register the exact legal name
Use the name on your recording contract and tax documents, not a stage name variation. Mismatched names are one of the most common reasons a payment cannot be routed.
3. Match every recording by ISRC
Every ISRC in your catalogue should attach to the correct title, artist and writer credits. Missing ISRCs are the leading cause of unclaimed balances.
4. File your letter of direction if you produced or engineered
The Featured Artist Letter of Direction is what converts a share from untouchable into payable. Without it, there is nothing to match against.
5. Register non-featured performers through the correct funds
If you had session players or background singers, the 5 percent share does not reach them through your SoundExchange account. It moves through the AFM Intellectual Property Rights Distribution Fund and the SAG-AFTRA Fund.
6. Read the statement line by line
Compare usage counts against your own streaming dashboards for internet radio services. A large gap usually means a matching problem rather than a low payout.
7. Search for unclaimed money in the same sitting
Use the official unclaimed royalty lookup and the Copyright Office NOI Lookup database. Searching by artist name and title is cheap and routinely turns up old money.
8. File disputes properly and early
If a major rights holder claims recordings that are clearly yours, use the Overlaps and Disputes process inside your SoundExchange account. Disputes need evidence: release dates, split sheets, contracts and clear ISRC records. Vague claims get rejected. The concern artists raise most often, sometimes called royalty raiding, is exactly what this process exists to settle.
For the underlying authority, read the statutory text and the Copyright Royalty Board rate determinations rather than blog summaries. Summary articles routinely state rates that were superseded years ago.
Frequently Asked Questions
Does every internet radio stream earn a SoundExchange royalty?
No. A performance only generates a SoundExchange royalty if the service reports it into the statutory system and it matches a registered sound recording. Small stations that report late, or play logged with poor metadata, produce matches that never reach an owner. Unmatched plays are held as unclaimed money rather than lost, but they only come back if someone eventually searches for them.
Is SoundExchange the same as ASCAP, BMI, or SESAC?
No. ASCAP, BMI and SESAC are performing-rights organisations for compositions, collecting on behalf of songwriters, composers and publishers. SoundExchange collects digital performance royalties on sound recordings, the master side. A recording artist needs SoundExchange for the recording, a PRO for the song, and a mechanical licence or agency for reproductions. One does not replace the others.
Do artists receive SoundExchange money directly?
Directly, if they own the master and are registered. On a self-released recording the rights owner and featured artist are the same person, so about 95 percent of the distributable balance after administration comes back to you. On a label deal, 50 percent goes to the label as master owner, 45 percent to the featured artist, and 5 percent to non-featured performers through the AFM and SAG-AFTRA funds.
Why does my SoundExchange statement not show a fixed amount per stream?
Because statutory royalties are drawn from a revenue pool rather than paid at a flat per-stream rate. Rates are set per song per listener by the Copyright Royalty Board, and they differ by service category and by whether the listener subscribes. Satellite radio works on a revenue-share basis instead of counted plays, so dividing your total by your play count produces a meaningless figure.
Can I claim a SoundExchange royalty for playing music on my station or stream?
If you operate a non-interactive stream, you are the party who pays the statutory royalty rather than the one receiving it. You report each performance to SoundExchange or your designated collection agent and remit the applicable rate. The rights owners on the other side are the ones claiming the money. If your station is interactive and listener-driven, you negotiate licensing directly instead.
Does SoundExchange pay for Spotify or Apple Music streams?
No. Those platforms license recordings directly and pay rights holders through distributors and label royalty accounting, not through the statutory system. A Spotify or Apple Music play produces no SoundExchange royalty. SoundExchange income comes from radio-style services where the listener does not choose what plays, including internet radio, satellite radio and digital cable music channels.
Conclusion: Start With the Correct Royalty Type
The single most useful thing to take from this guide is the split between two copyrights. SoundExchange pays the sound recording owner and the featured artist for the digital public performance of a recording. Your PRO, your mechanical licence and your distributor handle everything else, and your distributor’s on-demand streaming income has no connection to SoundExchange at all.
So start there. Work out whether you own the master, then register the recordings under the exact legal name with correct ISRCs, then run a search for unclaimed money on your own catalogue. Keep SoundExchange expectations in proportion: for radio-style listening it is a supplement that quietly grows over years, not a replacement for your distributor revenue.
