Stories » Rise of SoundExchange Shows the Growth of Digital Radio Royalties / New York Times

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Rise of SoundExchange Shows the Growth of Digital Radio Royalties / New York Times

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For a sense of how quickly digital radio outlets like Pandora and SiriusXM have become a major source of revenue for the music industry, look no further than their royalty payments.

SoundExchange, the nonprofit group that processes the royalties those companies and others pay to performers and record companies, took nearly a decade to pay out its first $1 billion, in 2012. The second billion came almost two years later, in early 2014. On Wednesday the organization will announce that it has crossed $3 billion in payments.

"When we first started, we were a rounding error on most people's income statements," Michael Huppe, SoundExchange's president, said in an interview. "Now we're one of the top accounts at most recorded music companies."

SoundExchange, which was founded in 2000, collects money for performers and record labels whenever songs are played on digital radio. These payments - which are separate from songwriting royalties - have grown along with the popularity of online radio, and now make up a substantial part of the music industry's revenue. The $773 million that SoundExchange paid last year is equivalent to about 16 percent of the American recording industry's whole income of $4.9 billion, as reported by the Recording Industry Association of America.  READ THE FULL New York Times ARTICLE