SoundExchange

SoundExchange plays a unique and crucial role in the U.S. music industry, distinct from ASCAP, BMI, and SESAC. While the PROs collect Performance Royalties for songwriters and publishers (for the musical composition), SoundExchange collects and distributes Neighboring Rights (digital performance royalties) for the owners of the Master Recording (typically record labels) and the featured and non-featured performing artists. These royalties are generated specifically from non-interactive digital transmissions, such as satellite radio (SiriusXM), internet radio (Pandora), and certain webcasters.

SoundExchange is the only organization in the U.S. designated by Congress to collect and distribute these specific digital performance royalties. It operates by collecting statutory royalties from digital radio services and then distributing 50% to the sound recording copyright owner (e.g., record label), 45% to the featured artists, and 5% to non-featured musicians and vocalists. For artists and labels, registering with SoundExchange is essential to ensure they receive their share of these significant digital performance royalties, which can be a substantial income stream in the streaming era.

If your song is played on Pandora, SoundExchange collects a royalty from Pandora. This royalty is then split, with a portion going to your record label (or you, if you own your masters) and a portion going to you as the performing artist, separate from any royalties collected by ASCAP/BMI/SESAC for the composition.

melabel helps artists manage their music business. Understanding SoundExchange is vital for collecting Neighboring Rights. melabel’s Music Analytics can track the performance of your Master Recordings, providing data to ensure accurate royalty collection from SoundExchange and other similar organizations globally.