SoundExchange rates for internet radio explained

SoundExchange Rates for Internet Radio Explained: 2026 Guide

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If you run an internet radio station, you’ve probably heard of SoundExchange. Maybe you’ve even gotten a payment or, more likely, a notice about owing one. I’ve worked with small webcasters for years, and the same question always comes up: what does SoundExchange actually charge for internet radio, and how do I figure out what I owe?

This guide is my attempt to cut through the legal jargon and explain SoundExchange rates for internet radio in plain English. I’ll cover the 2026 rate structure, how the per-performance fee works, what the minimum fee really means, and how those collected dollars get split between labels and artists. By the end, you’ll know exactly what your monthly liability looks like and where to register.

Table of Contents

What Is SoundExchange and What Does It Collect?

SoundExchange is the only organization in the U.S. designated by the Library of Congress to collect and distribute digital performance royalties for sound recordings. When a song plays on SiriusXM, Pandora, iHeartRadio, or a non-interactive internet radio stream, SoundExchange collects a royalty from the streaming service and passes most of it to the rights holders.

The key phrase here is “sound recording copyright owner.” SoundExchange deals with the master recording, not the songwriters’ composition. Composers get paid separately by their PRO (ASCAP, BMI, or SESAC). SoundExchange handles what the music industry calls the “neighboring right” — the right of the artist and label who made the recording.

SoundExchange collects digital performance royalties at rates set by the Copyright Royalty Board (CRB). It then distributes them monthly at one of the lowest administrative rates in the music industry, between 4% and 6%. Registration is free, and there’s no membership dues requirement.

Why Internet Radio Stations Need to Pay SoundExchange

Any non-interactive digital audio service in the U.S. that streams copyrighted sound recordings must pay SoundExchange. This includes internet radio operators, simulcasters of AM/FM stations broadcasting online, and certain cable music channels. The legal basis is a statutory license created by the Digital Millennium Copyright Act (DMCA) in 1998 and refined since.

If you operate an internet radio station without a license, you risk receiving a violation notice. Once notice arrives, the situation usually escalates quickly into demands for back royalties, penalties, and sometimes legal fees. We’ve seen small operators get hit with bills ranging from a few thousand dollars to over $100,000 once the CRB statutory rate is applied retroactively.

The good news is you don’t need to negotiate a license with every rights holder. The statutory license gives you blanket permission to stream any copyrighted song, provided you file monthly Statements of Account with SoundExchange and pay the corresponding royalties.

SoundExchange Rates for Internet Radio in 2026

For 2026, the CRB per-performance rate for commercial webcasters is $0.0025 per performance, meaning each time a song is heard by a single listener constitutes one performance. The minimum fee for each station or channel is $1,100 per year if you have fewer than 100 stations.

Let’s break that down clearly. The current rate has held at $0.0025 per performance for several years under the NAB-SoundExchange settlement covering 2026-2030. While that price sounds tiny per play, it adds up fast for internet radio. A station with 10,000 monthly listening hours can easily accumulate $1,500-3,000 in monthly royalty liability.

For commercial broadcasters simulcasting over the internet, there’s a separate rate of $1,100 per station or channel, capped at $110,000 for operators with more than 100 stations or channels. That rate goes up modestly under the 2026-2030 settlement to compensate rights holders for inflation.

Commercial Webcaster Rate Card

  • Per-performance rate: $0.0025 ($.0026 starting 2026 for inflation adjustments)
  • Minimum annual fee: $1,100 per station or channel
  • Maximum liability cap: $110,000 for groups with 100+ stations

Noncommercial Webcaster Rate Card

  • Rate: $1,000 per month for the first 159,140 aggregate tuning hours (ATH) per station
  • Per-ATH rate above the threshold: $0.0028 per ATH (varies slightly year to year)
  • Maximum coverage: rates apply per channel, not per service

Commercial vs Noncommercial Webcaster Rates

The distinction between commercial and noncommercial webcasters matters because each has its own rate structure. A commercial webcaster is anyone streaming with the intent to make a profit, including advertising-supported stations and subscription services. Their rate is the per-performance model with a yearly minimum.

A noncommercial webcaster is a station that is exempt from taxation under Section 501(c) of the Internal Revenue Code and does not stream advertisements. College radio stations, community stations, and NPR affiliates typically fall here. Their rate is the ATH-based monthly fee instead of the per-play model.

If you’re a noncommercial station, your first 159,140 aggregate tuning hours each month per channel cost $1,000. After that threshold, additional listening hours are charged per ATH at a rate published annually. That structure works well for stations with predictable, modest audiences but punishes runaway growth.

I’ve seen college stations accidentally get billed as commercial because their stream includes underwriting spots. Even short sponsor messages can flip the classification. Check with your station’s legal counsel before filing your first Statement of Account.

How SoundExchange Rates Are Calculated

The math behind commercial webcaster rates is straightforward once you understand two terms. A “performance” means one listener hearing one song to completion (or for at least a significant portion). “Aggregate tuning hours” (ATH) is the total hours of listening your service delivers to all users in a month.

For commercial stations, here’s the formula:

Monthly Liability = (Total Performances × $0.0025)

Then compare that to your prorated minimum fee:

Annual Minimum Fee = $1,100 per station

Monthly Minimum = $1,100 ÷ 12 ≈ $91.67

You pay whichever is higher. So a small station with only 5,000 performances in a month pays $91.67, not the per-play total. A station with 50,000 performances pays $125 instead of the minimum.

Let me show you a real example. Suppose you run “Indie Vibes Radio,” a small commercial internet radio station broadcasting to 200 listeners on average. If each listener hears 8 songs per hour and tunes in for 4 hours monthly, your station delivers about 6,400 performances per month. Your monthly liability is 6,400 × $0.0025 = $16. That falls well below the monthly minimum of $91.67, so you owe $91.67.

Now add some growth. Your station takes off, hitting 5,000 average listeners with 4-hour sessions. Monthly performances jump to 160,000, and your liability is now 160,000 × $0.0025 = $400. You owe $400, well above the minimum.

The 50/45/5 Royalty Distribution Split

After SoundExchange collects royalties from services like yours, it distributes them according to a statutory formula. The split is 50% to the sound recording copyright owner, 45% to the featured artist, and 5% to non-featured performers (session musicians, background vocalists, etc.).

This split is automatic. If you’re both the owner and featured artist (as most independent musicians are for their own work), you claim both shares by registering twice with SoundExchange, once as the rights owner and once as the featured artist. We’ve seen artists miss out on tens of thousands of dollars by only registering as one role.

The non-featured 5% goes into a fund managed by AFTMA (American Federation of Television and Radio Artists) and is distributed separately. If you played on someone else’s recording and haven’t registered with AFTMA, you could be leaving money in that pool.

SoundExchange vs ASCAP vs BMI vs Your Distributor

This is where most artists and webcasters get confused, so let me lay it out plainly:

SoundExchange collects digital performance royalties for the sound recording. Pays the label/owner and the artist when their recording plays on SiriusXM, Pandora, or internet radio. Statutory license covers all eligible songs.

ASCAP, BMI, and SESAC collect public performance royalties for the composition (lyrics and melody). Pays songwriters and publishers when their composition plays anywhere, including on-demand streaming, radio, TV, live venues. You need licenses from all three for full coverage in the U.S.

Your Distributor (DistroKid, TuneCore, CD Baby, etc.) collects on-demand streaming royalties (Spotify, Apple Music, YouTube). It does not collect digital performance royalties from non-interactive streams. You still need SoundExchange for those.

For internet radio operators, that means you need:

  • SoundExchange (for the sound recording performance license)
  • ASCAP + BMI + SESAC (for the composition public performance license)

Many hosting providers bundle ASCAP and BMI but not SoundExchange. We’ve watched operators get their ASCAP/BMI piece taken care of only to discover they still owe SoundExchange separately. The fees stack, so budget accordingly.

How to Register with SoundExchange

Registration is free and takes about 20 minutes for individuals. Here’s the basic process:

  1. Go to soundexchange.com and click “Register.”
  2. Choose your role(s): featured artist, sound recording copyright owner, or both.
  3. Provide your contact info, tax identification (SSN, EIN, or W-8BEN for non-US), and banking details for direct deposit.
  4. List your recordings using ISRC codes or let SoundExchange match them by metadata.
  5. Sign the Letter of Direction (LOD) if you produced or co-produced tracks.

After registration, payment cycles are monthly via direct deposit once your accrued royalties cross a small threshold (typically $10-25 depending on your role). Most artists see their first payment 3-6 months after registering, depending on how quickly matching resolves.

For webcaster registration, you’ll sign up through SoundExchange’s Licensee Direct portal and provide your streaming platform, channel details, and any documented simulcast arrangements. You’ll also commit to monthly Statement of Account filings.

SoundExchange Reporting Requirements for Webcasters

Every month, licensed webcasters must file a Statement of Account (SOA) listing the total performances and ATH for each channel. You also need to submit a Report of Use (ROU) that identifies every song streamed, including ISRC code, artist name, album title, and timestamp.

Reports of Use must be delivered to SoundExchange in a specific format, typically an XML or CSV file meeting the DDEX standards. Late filings carry a 10% penalty, and missing Statements of Account can trigger default judgments. Plan to automate this reporting with your streaming platform or third-party service to avoid manual errors.

Common Mistakes Internet Radio Operators Make

After helping dozens of small stations get compliant, these are the issues I see over and over:

  • Operating without realizing the statutory license applies. Many small streamers assumed they were covered by their hosting platform or distributor.
  • Confusing SoundExchange with ASCAP/BMI. These are different rights for different works, and both are required.
  • Missing monthly Statement of Account deadlines. Penalties compound quickly.
  • Classifying as noncommercial when the stream contains ads or sponsor messages.
  • Not budgeting the minimum fee. A station doing only 1,000 performances a month still owes roughly $91.67.

For artists, the most common mistake is registering only as featured artist or only as owner. You can register in both roles and collect both shares. If you own your masters and perform on them, register twice.

Frequently Asked Questions

How much does SoundExchange pay per play?

SoundExchange currently pays statutory rates set by the Copyright Royalty Board. Commercial webcasters owe $0.0025 per performance in 2026, while noncommercial stations pay a flat fee based on aggregate tuning hours. The exact payout to artists depends on how royalties are split among rights holders, but artists typically receive the bulk of the collected amount after a 4-6% administrative fee.

How much does internet radio cost to operate legally?

Legal operation requires several royalty payments combined. SoundExchange alone costs commercial stations a minimum of $1,100 per year per channel, plus per-performance fees if your audience grows. You also need ASCAP and BMI licenses, which vary by station size and listening hours. Most small stations budget $2,000-4,000 per year minimum for combined royalties.

Is internet radio profitable for small operators?

Profitability depends entirely on audience size and revenue model. Stations earning under $5,000 monthly often struggle to cover combined royalty costs of ASCAP, BMI, and SoundExchange. Many profitable small stations rely on underwriting, listener donations, and niche audience targeting to reach break-even. The royalty costs are real but predictable once you know your listening hours.

Does SoundExchange collect radio royalties for everyone?

Yes. SoundExchange is the sole U.S. organization designated by the Library of Congress to collect digital performance royalties for sound recordings played on non-interactive platforms. It collects from services like SiriusXM, Pandora, iHeartRadio, and licensed internet radio stations, then distributes payments to labels, artists, and session musicians.

How much royalties are paid when a song plays on internet radio?

Each play of a complete song by one listener counts as one performance. At the 2026 rate of $0.0025 per performance, 100,000 monthly plays equals $250 in SoundExchange royalties owed by the streaming service. The amount distributed to artists is slightly less after the 4-6% administrative fee is deducted by SoundExchange.

How much does SoundExchange pay out each year?

SoundExchange distributes over $1 billion annually to rights holders. Most payments go to labels and featured artists for plays on services like SiriusXM and Pandora. Smaller independent artists typically see modest monthly payments ranging from a few dollars to a few hundred, depending on catalog size and audience reach.

What happens to unclaimed royalties at SoundExchange?

Unclaimed royalties remain in SoundExchange’s holding account. Once an artist or label registers and matches their recordings, accumulated royalties are paid out regardless of age. However, after three years of holding without match, certain funds may be distributed to the unclaimed royalty pool for redistribution, making timely registration important.

Final Thoughts on SoundExchange Rates for Internet Radio

Understanding SoundExchange rates for internet radio is straightforward once you separate the concepts. Per-performance rates apply to commercial webcasters, ATH-based flat fees apply to noncommercial stations, and all stations need ASCAP/BMI in addition to SoundExchange.

If you run a station, start by registering as a licensee, calculate your expected monthly liability using your listening hours, and budget for the minimum fee even at small scale. If you’re an artist, register both as owner and featured artist to claim your full 95% share. With 2026 rates settled through 2030, you can plan confidently for the next several years.

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