SoundExchange Distributions Grew 58% to $462 Million in 2012

SoundExchange distributed $462 million in digital performing royalties in 2012 -- a 58% increase over 2011 -- the organization announced Wednesday.

The 22,000 payments, totaling $134.9 million in the fourth quarter of 2012, were 10% higher than the $122.5 million paid out in the previous quarter and 50.7% higher than the same quarter in 2011.

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SoundExchange is the U.S. organization that distributes royalties for the digital performances of sound recordings by Internet radio, satellite radio and cable TV music channels. It has paid out over $1 billion to record labels and featured recording artists since its inception in 2003.

The growth of this revenue stream underscores the importance of services such as Pandora -- and other webcasters -- and Sirius XM Satellite Radio in today's digital marketplace. Pandora, which supported the Internet Radio Fairness Act that could have led to a change in webcasters' statutory royalty rates, finished 2012 with 67.1 million active listeners, up 41% from 2011. Sirius XM added 2 million subscribers to finish the year with 23.9 million.

Along with subscription services and advertising-based digital services like YouTube, digital radio represents the growth of recorded music revenues. It's just what the industry needs, too. The $170 million increase in SoundExchange payments grew in 2012 will help offset some of 13.5% decline in CD sales last year.

"SoundExchange's increasing annual royalty payments are a positive indication of where the industry is heading," said SoundExchange President Michael Huppe in a statement. "As digital radio continues to grow, so should the amount that performing artists and rights owners receive for the use of their content."