Neighboring rights and SoundExchange
Neighboring rights are the recording's public-performance royalties – money owed to the performer and master owner when a recording is broadcast or played in public. In the US these only exist for digital radio, collected by SoundExchange. Terrestrial AM/FM pays the artist nothing, which is why collecting abroad matters.
The royalty most artists forget
We’ve covered the song side – performance royalties through a PRO. But the recording itself can earn a performance royalty too, paid to the performer and master owner rather than the songwriter. This is the neighboring-rights side, and because it doesn’t come through the distributor or the PRO, it’s the income artists most often leave behind.
The US gap on terrestrial radio
Here’s the quirk that surprises everyone: in the US, terrestrial AM/FM radio pays the songwriter (through their PRO) but pays the recording artist and master owner nothing. The US grants no general public-performance right for sound recordings, so a song can be a radio hit while the performer earns nothing from those spins. The US is the only major market that works this way. There’s long-running legislation to change it, but as of now it hasn’t passed – so plan around the gap, not around a fix.
SoundExchange and digital radio
Digital radio is the exception. The US does grant a performance right for recordings played on non-interactive digital services – SiriusXM, Pandora’s radio mode, internet radio and webcasters. SoundExchange is the single body that collects this, by statute, and splits it three ways:
- 45% to the featured artist – paid directly, not through the label
- 50% to the owner of the sound recording (the master owner)
- 5% to a fund for the non-featured performers (session players, backing vocalists)
That 45% going straight to the artist is worth knowing – it’s not recoupable against a label advance the way master streaming income can be. Any artist with digital radio plays should be registered with SoundExchange. (Note: this is non-interactive radio only. On-demand streaming like Spotify is the master side, covered in streaming royalties.)
Collecting neighboring rights abroad
Most other countries do pay performers and master owners for broadcast and public performance – the right the US lacks. So a US artist played on the radio or in venues overseas is owing money abroad, even though the same plays at home would pay nothing. That money can usually be collected through SoundExchange’s international program or a neighboring-rights administrator, though how much comes back depends on each country’s reciprocity rules. For a touring or internationally-streamed artist, it’s a real income source worth setting up. See the full royalties guide for how it fits with everything else.
Common questions
- What is SoundExchange?
- The US organization that collects digital performance royalties for sound recordings – from non-interactive services like SiriusXM, Pandora and internet radio. It pays the featured artist, the master owner and a fund for non-featured musicians, by statute.
- Does US radio pay the artist?
- Terrestrial AM/FM radio does not pay the recording artist or master owner – only the songwriter, through a PRO. The US is the only major country that works this way. Digital radio is different: SiriusXM, Pandora and webcasters do pay the recording side, through SoundExchange.
- What are neighboring rights?
- The right of performers and master owners to be paid when a recording is broadcast or played in public. Most countries grant it; the US doesn't (except for digital). US artists can often still collect neighboring rights earned abroad, usually through SoundExchange's international program or an administrator.