How a Stream Becomes Money: Where US Music Royalties Come From
By Written by Peter McVeigh
Follow a Spotify stream, a Pandora play, a radio spin and a CD sale through the American system.
One play can create several payments, to different people, through different organizations. The route depends on the song, the recording and the type of service. This guide follows the four most common ones.
I checked the details in this guide on 4 November 2026. Fees and rules change, so check each organization's own page before you rely on them.
Four plays, side by side
Play: Song: performance: Song: mechanical: Recording
Spotify or Apple Music on-demand stream: PRO: The MLC: Distributor or label
Pandora, SiriusXM or internet radio: PRO: Generally none: SoundExchange
AM/FM radio: PRO: None: No US payment
Download: Generally none: The MLC: Distributor or label
CD or vinyl: None: Paid under the physical mechanical rate: Your sale income
This is a simplified picture. Contracts and individual services can differ.
1. An on-demand stream
A listener picks your track on Spotify. The recording money goes to your distributor or label, who pays you after any fee or share. On the song side, the performance share goes through your PRO, and the mechanical share goes through The MLC. Miss one registration and part of the money doesn't reach you.
2. A Pandora or SiriusXM play
The service pays SoundExchange for the recording, 50% to the rights owner, 45% to featured artists and 5% to non-featured artists. The song side goes through your PRO.
3. A spin on AM/FM radio
Stations pay the PROs for the song. They don't pay a performance royalty for the recording. So a songwriter can earn from a hit on AM/FM while a performer who didn't write it gets nothing from that play. This is one of the biggest differences from the UK.
4. A CD or vinyl sale
You keep your margin if you sell direct, and the song earns a mechanical at the statutory rate. If you wrote everything, that's your money anyway. If you've co-writers or covers, you owe them.
The same stream, three different artists
You are: Song money: Recording money
A self-releasing writer and performer: Yours through your PRO and The MLC: Yours through your distributor and SoundExchange
Signed to a label and a publisher: Through them, under your contracts, with your writer share from your PRO: To the label first, then under your contract. SoundExchange pays featured artists directly
A session player who didn't write: None: Any session fee, plus possible AFM & SAG-AFTRA Fund payments
Interactive and non-interactive
You'll see these words a lot. On an interactive service, the listener chooses the track, as on Spotify or Apple Music. On a non-interactive service, such as SiriusXM or Pandora's radio-style listening, the service programs what plays. That difference decides whether recording income comes through your distributor or through SoundExchange.
Why money goes missing
Songs aren't registered with a PRO or The MLC.
Artists aren't registered with SoundExchange, and royalties there expire after three years.
ISRCs are missing, or there are duplicates.
The publisher half was never set up.
Names and splits don't match across systems.
A simple checklist
Step 1: Join ASCAP or BMI as a writer, and set up the publisher side if you self-publish.
Step 2: Register every song, with written splits.
Step 3: Join The MLC if you administer your own publishing.
Step 4: Register with SoundExchange as artist and rights owner.
Step 5: Give each recording an ISRC, and each release a UPC.
Step 6: Keep one master list and check statements against it.
Sources
SoundExchange, Digital performance royalties: https://www.soundexchange.com/digital-performance-royalties/
SoundExchange, AM/FM rights: https://www.soundexchange.com/advocacy/us-terrestrial-radio-performance-rights/
The MLC, FAQ: https://www.themlc.com/faqs/categories/play-your-part
ASCAP, Why join: https://www.ascap.com/about-us/why-join-ascap-general
Federal Register, 2026 rates: https://www.govinfo.gov/content/pkg/FR-2025-12-01/html/2025-21695.htm
Disclaimer
Simplified general information, not legal or financial advice.