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Are Digital Radio Revenues Starting To Add Up?

Posted by on June 19, 2012

Just a few weeks ago, an unnamed independent label stated that they weren’t making much money at all from streaming services like Spotify. However, an article that ran in the New York Times alleges that royalties from Internet radio stations like Pandora as well as SiriusXM are starting to increase. SoundExchange, a non-profit group that process payments for online streams, announced yesterday that they paid more than $100 million in payments  to artists and labels in the most recent quarter. In all of last year, they’d only paid out $292 million. This quarter brings them to the $1 billion mark for what they’ve paid artists and record labels since their founding in 2000.

“The way the industry is going, it is about multiple revenue streams, not just one,” SoundExchange president Michael Huppe told the Times. The article looks at indie label Jagjaguwar, Bon Iver’s label, whose founder says that they’ve made $95,000 since 2007 from SoundExchange. That’s not a ton of money for a label, but it’s more than what they’d be making without anyone tracking digital sales. It’s also worth noting that it’s the only way that labels and performers are getting paid for airplay, since terrestrial radio only pays songwriters and publishers in the United States.

Digital radio royalties still have a ways to go before they catch up, however. Songwriting licensers ASCAP and BMI paid out $1.64 billion in 2010, which is a fraction of the $292 million that SoundExchange paid. Yet as the music landscape continues to change, it’s encouraging to see that streaming and Internet radio revenues are possibly starting to fall in line and give artists another stream of revenue.

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Categorised in: Digital Media, Internet Radio