The popularity of satellite and Internet radio is starting to lead to larger royalty checks for musicians.
Digital Notes
Daily updates on the business of digital music.
SoundExchange, the organization that collects royalties from these services, said on Thursday that it paid $462 million to performers and record companies last year, up 58 percent from 2011. Not long ago, SoundExchange’s payments were considered minimal by most musicians, but they have been growing quickly. In June, the organization announced that it had paid $1 billion in royalties since its founding in 2000.
These payments represent a royalty not otherwise available to most artists. By law, satellite and Internet radio services must pay the performers and copyright holders of a recording, in addition to songwriters and publishers; terrestrial broadcasters pay only the publishing side. (SoundExchange does not handle royalties for downloads, nor for the on-demand streams of companies like Spotify and Rhapsody.)
The growth of services like Pandora and Sirius XM Radio has been the driving force behind the increased royalties. Pandora now has 67 million listeners each month — a third more than it had a year ago — and Sirius XM now has nearly 24 million paying subscribers. But the rate these companies pay has been in dispute lately.
Pandora backed a bill in Congress last fall that could have lowered its rates; it was aggressively opposed by music industry groups, including SoundExchange, and the bill expired at the end of the year. In court hearings last year, Sirius pushed for lower rates; its rates were increased through 2017, but not as much as SoundExchange had wanted.
SoundExchange’s royalties are growing, but they still represent a fraction of the revenue from recorded music, which, according to the Recording Industry Association of America, was just over $7 billion in 2011.
Tracking the Industry, in Part: Next Big Sound, a company that measures the social activity surrounding online music, this week offered another encouraging glimpse of the market. In its year-end report, it said it measured 93.8 billion streams of songs last year, up 45 percent from 2011. Combing through artist Facebook accounts, Twitter feeds and other sources, it found find 17.1 billion profile views and 5.7 billion “new fans” of music.
Most of the numbers in the report — YouTube and Vevo views, Wikipedia page views — point upward. Among the sites Next Big Sound tracks, the biggest gainer was SoundCloud, which lets musicians, labels and fans upload tracks that can be streamed or embedded on social sites like Tumblr. According to Next Big Sound, its fan activity tripled last year. (Last month, SoundCloud said it had 180 million users around the world.)
It also found that while independent acts tend to do very well on Facebook, Twitter and other sites (especially SoundCloud), that shrinks on Vevo and YouTube; Vevo is owned by Universal and Sony Music, and many independent labels do not have licensing deals with it.
But like the SoundExchange numbers, Next Big Sound’s report covers only a certain chunk of the overall market. It excludes data from Pandora, Spotify, iTunes and other services whose listening data is not public, as well as visits to artists’ own Web sites.
Ben Sisario writes about the music industry. Follow @sisario on Twitter.
Article source: http://mediadecoder.blogs.nytimes.com/2013/01/16/digital-notes-measuring-growth-in-dollars-and-page-views/?partner=rss&emc=rss
