Issue 07 · Producer Perspective

SoundExchange Royalties for Producers: There Is No Producer Share

SoundExchange pays the recording side of US digital radio. Producers only get a piece if someone directs it to them.

By Dan Montano · 2026-11-02 · 5 min read

Here is the part almost nobody explains correctly. SoundExchange pays three types of payee, and producer is not one of them. There is no producer share at SoundExchange.

That is not a reason to walk away. It means the question is not "how do I register as a producer." The question is which of the three payees you actually are on a given record.

How does SoundExchange split the money?

Every dollar it collects is divided the same way:

• 50 percent to the rights owner, usually the record label or whoever owns the master.
• 45 percent to the featured artist.
• 5 percent to non-featured performers, meaning background singers and session musicians, distributed through a fund.

One useful thing about it: you do not need a label to collect from SoundExchange. That is unusual on the recording side.

Which door are you standing in?

Door one: you own the master. You are independent, it is your record, nobody else controls it. Then you are the rights owner and the 50 percent is yours. Register the recording and you are done. This is the clean case.

Door two: you played or sang on it. You cut the guitar, played the keys, sang the background. That makes you a non-featured performer with a claim on the 5 percent pool. But that money does not come from SoundExchange. SoundExchange passes it to the AFM and SAG-AFTRA Intellectual Property Rights Distribution Fund, and the fund pays you. Different organization, different website, different sign-up entirely, and it is the step producers are almost never told about.

Door three: you produced the record, you did not perform on it, and you do not own the master. This is most people reading this. You get nothing from SoundExchange unless the featured artist signs a Letter of Direction instructing SoundExchange to carve you out a percentage.

That carve-out comes out of the artist's 45 percent. Not off the top, not from some producer pool. Out of the artist's pocket. Which is exactly why nobody ever offers it to you and why you have to ask for it.

What does a SoundExchange Letter of Direction involve?

It is a separate document from the label Letter of Direction, and this trips people constantly. Different money, different building, different recipient. This one goes to SoundExchange directly, not to the record label, and it is separate again from your producer agreement.

What it needs:

• The featured artist's signature. If there are two featured artists on the record, both have to sign. One signature is not enough.
• A repertoire chart listing the recordings it covers.
• Your percentage on each of those songs.

Processing takes a while, and the clock does not start until it is actually submitted. Anything missing or incomplete stretches it further.

The timing advice is the same as every other document in this business. Ask during the negotiation, while the deal is closing and your yes still carries weight, not two years later when you discover this money exists. Get the producer agreement, the label Letter of Direction, and the SoundExchange Letter of Direction signed in one moment.

Is this actually worth chasing?

Honest answer: it depends entirely on whether your records get played on digital radio, and for a lot of people the number is small. We have clients with triple platinum singles who get pennies from SoundExchange. Somebody out there is making real money from it, but you need the Pandora and SiriusXM play to justify the effort.

What makes it worth ten minutes anyway is that the money sits and waits. SoundExchange will hold unclaimed royalties for up to three years and sometimes longer. Every year, millions of dollars in that pool go unclaimed. And people who do register tend to register their new work and forget catalog from five, ten, or fifteen years ago that is still picking up spins.

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