What Is SoundExchange and How Do You Get Paid?

If you've heard of SoundExchange but aren't sure what they do — or whether you're leaving money on the table — this guide covers everything independent artists and producers need to know.

What Is SoundExchange?

SoundExchange is the nonprofit organization designated by the U.S. Copyright Office to collect and distribute digital performance royalties from non-interactive streaming services. These are platforms where listeners can't choose exactly what plays next:

• Pandora
• SiriusXM satellite radio
• iHeartRadio
• Live365
• Internet radio stations and cable TV music channels

SoundExchange is entirely separate from ASCAP, BMI, and SESAC. Those PROs collect performance royalties when music plays on broadcast radio or in public venues. SoundExchange handles digital performance royalties from non-interactive services only.

Who Does SoundExchange Pay?

For every digital performance, SoundExchange splits royalties three ways:

• 50% to the featured artist(s)
• 45% to the copyright owner of the master recording
• 5% to non-featured performers

If you're an independent artist who both wrote and recorded a song, you may be entitled to both the featured artist share and the master owner share — but you must register for each separately.

How Do You Register with SoundExchange?

1. Create a free account at soundexchange.com
2. Register as a Featured Artist and as a Rights Owner if you own your master recording
3. Register your recordings with ISRC codes for each track
4. If you co-own the master with a producer or other rights holder, file a Letter of Direction (LOD) to specify how royalties are divided

What Is a Letter of Direction (LOD)?

A Letter of Direction tells SoundExchange how to split master-side payments between multiple rights holders. Without one, SoundExchange defaults to paying whoever registered the recording — meaning a producer with a master share won't automatically receive their portion.

Example: an artist owns 60% of the master, a producer owns 40%. The LOD ensures each party gets paid directly. Without it, the full amount goes to the registrant.

Your split sheet is what documents the master ownership split that your LOD must reflect. Without a signed split sheet, there's no clear record to file from.

How Much Does SoundExchange Pay?

SoundExchange has distributed over $10 billion in royalties since its founding. The amount for any individual artist depends on airplay volume on non-interactive services. Pandora and SiriusXM in particular can generate meaningful royalties — and many indie artists discover years of unclaimed royalties when they finally register.

SoundExchange vs. Spotify and Apple Music

SoundExchange royalties are entirely separate from what you earn on Spotify or Apple Music. Those are interactive services — listeners choose exactly what plays — and they pay through your music distributor. SoundExchange covers only non-interactive services.

The Bottom Line

Every independent artist should register with SoundExchange. Every collaboration needs a split sheet — it documents the ownership information you'll need to file an accurate LOD and ensure every rights holder gets paid correctly.