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.
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.”