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Digital Radio Royalties Hit $1 Billion Mark
 

The increase in royalty payments to artists and labels reflects the popularity of digital music services.

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On Monday, SoundExchange—a nonprofit organization that collects and distributes payments for online music streaming—announced in a press release that the group had hit the $1 billion mark in total royalty payments to artists and record labels since its launch in 2000.

In the first quarter of this year, SoundExchange says, it paid out $108.6 million.

For many artists and music labels, SoundExchange--which collects money from non-interactive digital music services such as satellite radio, Internet radio and cable radio--provides the only money earned from radio play, reports the New York Times. (Traditional broadcast radio royalties go only to songwriters and music publishers.)

For instance, the Times reports that Jagjaguwar Records, which represents Bon Iver and Dinosaur Jr., has collected $95,000 from SoundExchange in royalties since 2007.

“This milestone reflects the fact that the digital music industry is evolving and will continue to grow,” says SoundExchange President Michael Huppe in the release.

Changes in the music industry may challenge the model used by SoundExchange, however. The growth of direct licenses between record companies and digital music providers would eliminate the need for SoundExchange's services, reports the Times, while newly popular "on demand" digital services like Spotify and Rhapsody generally pay labels directly.

 

Last updated: Jun 18, 2012

ABIGAIL TRACY is a staff reporter for Inc. magazine. Previously, she worked for Seattle Metropolitan magazine and Chicago magazine.
@abigailtracy




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