March 18, 2014
Digital Radio is a Growing and Critical Part of Music Revenue Ecosystem
During the past decade, digital radio (including satellite radio and non-interactive streaming) has grown into a substantial revenue source for artists and record labels alike.
Data released by the RIAA today reveals the rapid growth and significance of SoundExchange distributions. Specifically, SoundExchange payments represented 8.4 percent of the total $7 billion in U.S. music industry revenues in 2013. That number is up from 6.7 percent in 2012, and was only 1.1 percent as recently as 2008. SoundExchange digital performance royalties – which come from both subscription and ad-supported streaming services – represent “bottom line” revenue which is paid directly to the creators of music.
In addition, SoundExchange payments represent nearly half of all streaming revenue in the U.S. The RIAA report data shows that SoundExchange year-end 2013 payments of $590.4 million represent 41.3 percent of the total U.S. music streaming revenues. As a whole, music streaming music revenues grew to 21 percent of total industry revenues, up from 15 percent in 2012.
Streaming is a healthy industry that is being rapidly adopted by consumers. More than 2,400 digital radio services use the statutory license that SoundExchange administers (up from 2,200 in 2012), and total listening hours continues to grow. Nielsen Soundscan also states that all streaming listenership is up 32 percent from 2012, and, Arbitron says there are now 90 million active users of internet radio in a single week.
“Digital radio royalties are clearly a vibrant part of the music ecosystem, and we are honored to be a vital part of it representing almost half of all streaming music revenue and 8 percent of all music revenues in the U.S.,” said Michael Huppe President & CEO of SoundExchange. “At the end of the day, without music these services would be nothing. We are pleased to see such growth in the royalties that recording artists and labels are receiving for their creations.”
At SoundExchange it is our mission to support, protect and propel the music industry forward. We believe in the long-term value of music, and see promise and potential in the future for fans, creators, and digital music services alike.