A label owns the master. That is a royalty stream of its own.
An independent label that owns master recordings is a rights holder in its own right, not merely a distributor of its artists' work. Master ownership entitles the label to the rights-owner share of neighbouring rights every time a recording is broadcast or publicly performed — income entirely separate from distribution, and income small labels very often never register to collect.
What a label collects that its artists do not
- Master recording income
- Streaming and download income from the recordings you own, paid through your distributor and then split with the artist according to your agreement.
- The rights-owner share of neighbouring rights
- When a recording is broadcast or played in public, neighbouring rights are generated and divided between the performers and the owner of the master. In the United States, SoundExchange pays 50% to the rights owner, 45% to the featured artist and 5% into funds for non-featured performers. That rights-owner half is the label's — but only once the label is registered as a rights owner and the recordings are claimed.
- Sync income on the master
- A sync licence has to be cleared on both sides: the composition and the recording. As master owner you control and are paid for the recording side, independently of whoever controls the publishing.
- Recoupment against advances
- Money you have already fronted, recovered from the artist's share as royalties arrive. This is an accounting obligation rather than a royalty stream — but getting it wrong, or being unable to show the working, is the fastest way to lose an artist.
The label that registered its artists but never itself
Neighbouring rights split in two directions: the performers on one side, the owner of the master on the other. A label that helped its artists sign up as performers, and never registered itself as a rights owner, is collecting one half of a royalty it is entitled to both halves of. The shortfall compounds across every recording in the catalogue and every territory where those recordings get airplay — and nothing in a distributor statement will ever surface it, because the distributor is not involved.
What to do about it
- Register the label as a rights owner with the neighbouring rights society in every territory where your recordings get airplay — SoundExchange in the US, PPL, GVL, SENA and their equivalents across Europe.
- Claim every recording you own, by ISRC. Recordings nobody claims accrue money that is eventually redistributed away from you.
- Keep a signed split sheet on file for every release. When a co-writer surfaces after the fact, that document is what prevents a takedown or a frozen payment.
- Confirm your artists have registered their own writer and performer shares. Your registration does not cover them, and their gaps become your support burden.
- Track recoupment per artist and per release, and make the numbers legible to the artist. Statements that cannot be reconciled are the most common source of label disputes.
Questions small labels ask
Does a small label need to register with SoundExchange?
If you own master recordings that get any US digital radio, satellite radio or non-interactive streaming play, yes. SoundExchange pays the rights-owner share directly to the owner of the master, which for a label is the label itself. Without registration, and without claiming the recordings by ISRC, that half of the royalty is not paid out to anyone on your side.
Who collects neighbouring rights — the label or the artist?
Both, separately, out of the same pot. The performers are entitled to their share and the master owner is entitled to theirs. Neither registration covers the other: a label signing up does not register its artists, and an artist signing up does not register the label.
What does a label need from its artists?
Signed split sheets, correct ISRCs, and confirmation that each artist is registered as a writer with a PRO and as a performer with a neighbouring rights society. Every one of those gaps eventually returns to the label as an unmatched payment, a disputed release, or an artist asking where their money is.
The royalty types this covers
Where to register
Last reviewed 2026-08-28. Registration rules, royalty splits and claim windows vary by society and by territory — this is a starting point for your own checks, not legal or financial advice.
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