PMApub / Academy lessons / Module 4

What is SoundExchange?

By PMApub Academy · Last reviewed 2026-10-13 · About 6 min read

A Quick Map of Music Royalties

Every recorded song carries two layers of rights. The composition covers the melody and lyrics. The master, or sound recording, covers the specific recorded performance. Different organizations handle each layer.

• PROs such as ASCAP and BMI collect public performance royalties for the composition.
• The MLC administers streaming mechanical royalties for the composition in the US.
• SoundExchange collects digital performance royalties for the sound recording.
• Your distributor or label pays you for on-demand streams and downloads of the recording.

SoundExchange sits on the master side, and it is not a replacement for any of the others.

What SoundExchange Is

SoundExchange is a non-profit collective rights management organization in the United States. It is the organization designated to administer the Section 114 sound recording statutory license. It collects statutory royalties from services that play sound recordings under a statutory license and distributes them to the people entitled to them. Registration is how you tell the organization who you are so it can pay you.

Because it collects under a license set up by law, many digital radio services report their plays and pay it directly. That is different from the interactive services, which obtain their recording rights through distributors and labels.

Which Services Pay SoundExchange

The services involved are generally non-interactive digital services, where the listener cannot choose the exact song. Examples include satellite radio such as SiriusXM, internet radio services such as Pandora's radio-style listening, webcasters, and digital cable music channels.

Note the key distinction. If a listener picks a track on demand, as on Spotify, the royalty typically flows through your distributor. If the service programs a radio-style stream, SoundExchange is usually the collector. US law does not give sound recording owners and performers a general public performance right for over-the-air AM and FM broadcasts, so SoundExchange does not collect for those plays. Stations still pay for the song itself through PROs. Internet streams of radio stations are different and are generally treated as digital transmissions. Other countries often do pay for terrestrial plays, which is why international neighboring rights come into the picture, as discussed in a later lesson.

Why Independent Artists Often Miss This Money

Your distributor does not automatically register you with SoundExchange. Unless you sign up, payments for your recordings may build up with no one to receive them. Tracks that are played quietly on radio-style services can generate money without you ever seeing a notification.

Maya, for example, releases her single and sees only on-demand streaming income. Months later she learns her song has been included on a few internet radio channels. If she has never registered with SoundExchange, she has no direct way to collect that income, and she needs to be careful to supply correct recording data when she does register.

How to Get Started Step by Step

1. Decide your roles. A self-released artist is usually both the featured artist and the owner of the master. The next lesson explains why that matters.
2. Gather recording data. Collect each track's title, artist name, ISRC, release date, and label or imprint name.
3. Create an account. Follow the organization's current sign-up and identity verification steps.
4. Register your recordings. Add each ISRC so plays can be matched to you. A catalog tool such as ReleaseReady can keep your ISRCs and release data organized.
5. Set up payment details. Provide the tax and payment information the organization requires.
6. Review statements. Check payments against your own records and correct any errors.

What to Expect

• Registration is free, but SoundExchange describes an administrative fee on what it distributes, and unclaimed royalties can eventually expire under its rules, so check the current terms and register early.
• Payments depend on actual plays and on rates set under US law, which can change.
• Statements can take time to arrive, so patience is needed, and small balances may take a while to reach any payout threshold the organization sets.
• Not every artist will receive significant money, and there is no guarantee of income.
• Keeping metadata clean helps your recordings be matched correctly.

Treat SoundExchange as one piece of a complete royalty setup rather than a shortcut to income. It works best alongside a PRO membership, an MLC registration, and a distributor that delivers accurate recording data. Setting each of these up once, and writing down where every song is registered, saves a great deal of confusion later. This article is general education, not legal or financial advice, so talk with a qualified music attorney or accountant about your own situation.

For labels, managers, and teams

A label has two jobs at SoundExchange: claim the owner share on every master it controls, and make sure its artists can claim the featured-artist share. Under the statutory split, the featured-artist portion is owed to the artist, not to the label, so a label that registers a catalog does not thereby collect the artist's 45 percent.

Build the account around clean repertoire data. For every release, record the track title, artist name exactly as credited, ISRC, release date, label or imprint name, and ownership. Keep the ISRC list identical across your distributor, your SoundExchange registration, and your own catalog register. Mismatched data is the most common cause of plays going unmatched.

Use a consistent legal entity for ownership. If masters are owned by a company, the registered name, tax details, and payment account should align with it. If masters are co-owned or licensed to a distributor, agree who is the owner of record and how income is divided.

For managers, add SoundExchange to onboarding for each new artist: confirm the artist has registered in the featured-artist role, supply letters of direction if the artist wants a share directed to producers, mixers, or engineers, and verify that statements reach the right person.

Do not assume the distributor registered anyone. Ask for written confirmation of what it does and does not handle. Reconcile statements regularly, keep contracts and split sheets in a central folder, and name one person responsible for the SoundExchange relationship so credentials and tax forms do not get lost.

Common mistakes to avoid

• Assuming the distributor registered you with SoundExchange. It generally does not.
• Thinking a PRO membership covers digital performance royalties for the recording. PROs cover the composition.
• Registering only one role when you hold two, which can leave a share unclaimed.
• Using inconsistent artist or label names across registrations, which scatters statements.
• Leaving out ISRCs or entering them incorrectly.
• Expecting SoundExchange to pay for on-demand streams on services like Spotify.
• Expecting income from over-the-air AM and FM plays, which US law does not cover for recordings.
• Forgetting tax and payment details, which can delay payment.

Action checklist

1. List every recording you own or perform on, with its ISRC.
2. Decide your role on each track: rights owner, featured artist, or both.
3. Choose one consistent name for your label or imprint.
4. Create a SoundExchange account and complete verification.
5. Register your recordings with exact titles, artist names, and ISRCs.
6. Add your tax and payment information.
7. Confirm your distributor's metadata matches your registration.
8. Record the registration status of each track in your catalog register.
9. Review each statement and correct errors promptly.
10. Revisit the register whenever you release a new track.

Key terms

• SoundExchange: the US organization designated to administer the Section 114 statutory license for digital performances of sound recordings.
• Statutory license: a license set by law that lets qualifying services use recordings without negotiating individually, in exchange for paying set royalties.
• Non-interactive service: a digital service where the listener cannot choose the specific track, such as satellite or internet radio.
• Digital performance royalty: money paid for the public performance of a sound recording by digital transmission.
• Sound recording (master): a specific recorded performance, as distinct from the underlying song.
• Rights owner: the owner of the copyright in the sound recording.
• Featured artist: the main performing artist credited on a recording.
• ISRC: an identifier code for a specific recording, used to match plays.
• PRO: a performing rights organization that collects composition performance royalties.
• Metadata: the descriptive data about a recording, such as title, artist, ISRC, and label.
• Distributor: a company that delivers recordings to services and generally pays the master side for on-demand streams.