TL;DR
SoundExchange collects digital performance royalties from non-interactive services — Pandora, SiriusXM, internet radio stations, and cable music channels — and pays them separately to the featured artist and the sound recording copyright owner. Unlike ASCAP and BMI (which pay songwriters), SoundExchange pays the people who recorded the music. If you own your masters, you can claim both the artist payment (45%) and the label/copyright owner payment (50%). Most independent artists are registered as featured artists but have never registered as the sound recording owner — missing half of every payment.
SoundExchange was established by Congress under the Digital Millennium Copyright Act and operates under a statutory license. Every non-interactive digital service — any service where listeners can't choose exactly which song plays next — must pay SoundExchange-administered digital performance royalties.
SoundExchange distributed approximately $1.05 billion in digital performance royalties in 2024, according to SoundExchange's 2024 fiscal report. The services that generate these royalties include Pandora, SiriusXM, iHeartRadio, BBC online streams, and hundreds of internet radio stations globally.
This is a royalty stream that exists entirely outside the ASCAP/BMI/MLC system. It's also the system with the clearest and most searchable unclaimed royalties database — yet many artists have never logged in.
How SoundExchange Payments Are Structured
SoundExchange divides each digital performance royalty payment into three portions:
50% to the sound recording copyright owner (SRCO). This is whoever owns the master recording — typically a record label, or for independent artists who own their masters, the artist themselves.
45% to the featured artist. This goes to the artist whose name is on the recording — the billed performer.
5% to non-featured performers. This goes to a fund for background singers and session musicians through the American Federation of Musicians (AFM) and SAG-AFTRA.
As an independent artist who owns your masters, you are both the featured artist (45%) and the sound recording copyright owner (50%). You can collect 95% of every SoundExchange payment for your recordings — but only if you're registered in both roles.
What SoundExchange Does NOT Collect
SoundExchange is narrow in scope by design. It collects digital performance royalties specifically from non-interactive services. It does not collect:
- Performance royalties from interactive streaming (Spotify, Apple Music) — those go to ASCAP or BMI
- Mechanical royalties from streaming — those go to The MLC
- Master recording revenue from streaming — that goes through your distributor
- Performance royalties from AM/FM terrestrial radio — the US does not require terrestrial radio to pay recording artists (this is the neighboring rights gap)
- Neighboring rights from international broadcasters — though SoundExchange has reciprocal agreements with several foreign CMOs for international digital performance
SoundExchange and International Royalties
SoundExchange has established reciprocal agreements with neighboring rights collection societies in several countries, including PPL (UK), GVL (Germany), and SENA (Netherlands). Through these agreements, SoundExchange can collect and distribute international digital performance royalties for US artists registered with them.
This means a single SoundExchange registration can capture digital performance royalties from UK internet radio, German streaming services, and Dutch webcasters — without requiring separate registration in each country. This is a significant feature that many artists never leverage because they don't know about it.
The agreements don't cover all territories or all royalty types, but for digital performance from major markets, SoundExchange reciprocal collection is often the most accessible starting point.
SoundExchange's Unclaimed Royalties Database
SoundExchange maintains a searchable database of unclaimed royalties. Artists can search by name, artist name, or song title at soundexchange.com.
If your recordings have been played on Pandora, SiriusXM, or internet radio stations without a registered SoundExchange account, those royalties are held in the unclaimed pool. The database search takes two minutes. Many artists find hundreds or thousands of dollars waiting to be claimed.
SoundExchange does not have a fixed redistribution date like The MLC's three-year rule — funds are held until claimed. However, after an extended period, some royalties may become subject to state escheatment laws. Checking and claiming promptly is still the right approach.
How to Register with SoundExchange
Step 1: Create a SoundExchange account. Go to soundexchange.com and create an account. Registration is free.
Step 2: Register as featured artist. Enter your legal name, stage name, and performance history. This registers you for the 45% featured artist payment.
Step 3: Register as sound recording copyright owner (SRCO). This is the step most independent artists miss. If you own your masters, you must separately register as the SRCO for your recordings. This unlocks the 50% owner payment.
Step 4: Submit your ISRCs. SoundExchange uses ISRCs to identify your recordings. Submit the ISRCs for every recording you want tracked. Use the ISRCs assigned by your distributor — these are what Pandora and SiriusXM report in their usage data.
Step 5: Search the unclaimed database. Before or after registering, search the unclaimed royalties database for your name and artist name. If you find unclaimed royalties, file a claim with appropriate documentation.
What CreateBase Does for SoundExchange
SoundExchange registration and unclaimed royalty recovery are part of every CreateBase engagement:
- We register you as both featured artist and sound recording copyright owner at SoundExchange
- We submit your complete ISRC catalog to SoundExchange for accurate matching
- We search SoundExchange's unclaimed royalties database for your artist name, legal name, and song catalog
- We file claims for any unclaimed royalties with supporting documentation
- We set up SoundExchange's international reciprocal collection for UK, German, and Dutch digital performance royalties
- We verify ongoing distributions to confirm your registrations are matching correctly
See what SoundExchange is holding for you → CreateBase delivers a free personalized royalty gap report within 48 hours.
Frequently Asked Questions
Q: What is the difference between SoundExchange and ASCAP or BMI?
A: ASCAP and BMI collect performance royalties for the underlying musical composition — they pay songwriters and publishers. SoundExchange collects digital performance royalties for the sound recording — it pays artists and master owners. When your song plays on SiriusXM, ASCAP/BMI collect one payment (for the composition) and SoundExchange collects a separate payment (for the recording). Independent artists who own both the composition and the recording need registrations at both PROs and SoundExchange.
Q: Does SoundExchange cover Spotify?
A: No. SoundExchange covers non-interactive services only — services where the listener doesn't choose specific songs (internet radio, satellite radio, cable music channels). Spotify is an interactive, on-demand service, so it does not pay SoundExchange royalties. Interactive streaming royalties flow through your distributor (master revenue) and ASCAP/BMI (performance royalties) and The MLC (mechanical royalties).
Q: I'm registered with SoundExchange as an artist but not as an SRCO. Am I missing payments?
A: Yes. If you registered only as a featured artist and not as the sound recording copyright owner, you're collecting the 45% artist share but missing the 50% SRCO share. Log into your SoundExchange account, go to the sound recording copyright owner section, and register your recordings in that role with the appropriate ISRCs. The SRCO registration is a separate step within SoundExchange's system.
Q: How does SoundExchange know which songs I performed on?
A: SoundExchange receives usage reports from Pandora, SiriusXM, and other services that include ISRCs for every play. It matches those ISRCs against its database of registered recordings. This is why submitting your ISRCs to SoundExchange is critical — without the ISRC link, plays of your recordings are reported but can't be matched to your account.
Q: Are SoundExchange royalties significant for independent artists?
A: For artists with catalog on Pandora or significant non-interactive digital plays, yes. An artist with 200,000 monthly Pandora listeners can expect several hundred dollars in SoundExchange payments annually — fully separate from Spotify and Apple Music earnings. For artists with catalog that's been streaming on Pandora for several years without SoundExchange registration, the accumulated unclaimed royalties can be meaningful. Search the unclaimed database to see what's waiting.
Sources
- SoundExchange Fiscal Report 2024 — ~$1.05 billion distributed in digital performance royalties
- Digital Millennium Copyright Act — Statutory basis for SoundExchange's operation
- Copyright Royalty Board — Digital performance royalty rates
- SCAPR — International neighboring rights data and reciprocal agreements