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MacDonald: "Staggering figure" suggests Pandora, SiriusXM have "a good deal of leverage to extract a fair royalty deal"

Thursday, April 12, 2012 - 11:40am

Angus MacDonaldAccording to new analysis from Live365 general counsel Angus MacDonald (pictured), 90% of SoundExchange's 2011 revenues "came from only two sources": SiriusXM and Pandora.

MacDonald estimates SiriusXM's royalty payments to SoundExchange to be around $200 million in 2011 (based on the company's judicially-filed complaint against SoundExchange from March 23, though "a small portion" of the figure may be non-U.S. statutory payments). And Pandora's royalty payments to SoundExchange totaled $136.3 million in the 12 months that ended January 31, 2012.

SoundExchange's total 2011 revenues were $371.9 million. Combined, Pandora and SiriusXM's royalty payments make up around 90% of SoundExchange's revenues.

"That is a staggering figure," comments MacDonald, "especially if you consider all of the major and not-so-major terrestrial broadcasters who must pay royalties to SX for their simulcasts, as well as all the other types of services that pay royalties to SX... This suggests that Sirius and Pandora have a good deal of leverage to extract a fair royalty deal from SX for their respective royalty proceedings in the CRB."

SiriusXM and Pandora make up 90% of SX's revenue in 2011The finding is also noteworthy considering SiriusXM is trying to avoid paying SoundExchange by reaching its own direct licensing deals with rightsholders (RAIN coverage here). SiriusXM recently filed a lawsuit against SoundExchange and the American Association of Independent Music (A2IM), accusing the record industry organziations of interfering with its efforts to reach those direct deals (RAIN coverage here and here).

MacDonald also recently calculated (as published yesterday in Audio4Cast here) that SoundExchange's total royalty collections were up 40% from 2010 to 2011. That growth was mainly fueled by Pandora, which paid out nearly 50% of its revenues to SoundExchange in the fiscal year that ended January 31, 2012, according to MacDonald.

"Another interesting fact: Pandora paid about as much in royalties for its FY 2012 (i.e., $136.3M) as it made in TOTAL REVENUES for its previous fiscal year, FY 2011 ($137.7M).

"With Pandora’s ever-growing listening hours and royalty payments," MacDonald continues, "SoundExchange and the labels need a healthy Pandora as much as Pandora needs a reasonable Pureplay-like rate for the next royalty term (2016-2020). This is especially true if Sirius XM continues to sign up more direct license deals, thereby bypassing SoundExchange (though Sirius XM’s recent antitrust complaint suggests that may be a tough row to hoe)."

Vegas conference line-up now includes more than 30 industry experts

Tuesday, March 13, 2012 - 1:05pm

Sean RossRAIN Summit West 2012 is just over a month away and we still have quite a long list of speakers to announce! Today we're announcing four more, including a respected industry journalist and executives from Live365, Clear Channel / iHeartRadio, and AdsWizz.

The conference takes place Sunday, April 15 in Las Vegas (more info below).

Sean Ross (pictured right) is both Executive VP of Music and Programming for Edison Research and the author of the Ross on Radio Radio-Info newsletter. He's one of the radio and music industry’s most widely respected writers and programming analysts. Ross will moderate our panel on Personalizable Radio.

Owen GroverOne of the panelists of that discussion will be Owen Grover (pictured left), SVP of the iHeartRadio Network at Clear Channel Radio. Grover has served at Clear CHannel for over six years and has a strong background in digital media and music with a focus on marketing and business development.

Alexis van de Wyer Alexis van de Wyer (pictured right), President of AdsWizz, will speak as part of our Charting Digital Audio Ad Dollars panel. AdsWizz is a global AdServing and Audience Measurement technology provider with leading presence in over 24 countries. Before AdsWizz, Alexis was Global Advertising Director and General Manager at eBay.

Dan SteinyRAIN Summit West 2012 will also feature a discussion on The Connected Dashboard, including panelist Dan Steiny (pictured left), Head of Business Development for Live365. He has more than 15 years of industry experience and has served at companies like Sony, Motorola Mobility, Compaq, Liquid Audio, MediaNet Digital and PBS Home Video.

Other speakers set to appear at RAIN Summit West 2012 include DAR.fm's Michael Roberston, Spotify's Jon Mitchell, TAG Strategic's Ted Cohen and many others. ESPN SVP of Production/Business Divisions Traug Keller will keynote the conference. RAIN will announce more speakers and panel topics in the coming weeks.

RAIN Summit West 2012RAIN Summit West will take place on Sunday, April 15 at the former Las Vegas Hilton, now called the LVH -- Las Vegas Hotel and Casino. It will conclude with the always-anticipated tradition of the poolside RAIN Reader Cocktail Party.

The Summit is an official “Co-Located Education Program” of the NAB/RAB Radio Show. Registration includes access to the NAB/RAB Radio Show Exhibit Hall and a catered box lunch. RAIN registrants can save $100 on NAB/RAB Radio Show registration.

For registration and sponsorship information, visit kurthanson.com/rainsummitwest.

Other RAIN Summits are planned for later this year in Dallas (at the RAB/NAB Radio Show) on September 18th, in Minneapolis (at the Conclave) on July 20, and in Berlin, Germany on October 5th.

Live365 launches broadcasting package for independent artists

Tuesday, January 31, 2012 - 8:00am

Live365Internet radio network Live365 has announced the release of IndiePro, a service designed to help independent musicians promote their music. The package includes a 24/7 streaming station a player artists can share across different websites.

Plus, Live365 says artists can add their music to the company's music library. That allows other Live365 broadcasters to play the artist's music on their stations.

You can find out more about IndiePro from Live365's press release here.

Live365 offers custom holiday web radio e-cards

Friday, December 9, 2011 - 11:00am

Jennifer Lane's Live365 holiday radio e-cardLive365 has announced the availability of custom holiday web radio e-cards. Users can send friends and family e-cards through Live365 by picking among multiple designs, uploading their own photo and embeding a Live365 Internet radio station.

You can find the new feature from Live365 here.

"I checked it out this afternoon and thought it was great," writes Jennifer Lane at Audio4Cast. "What a great way to virally spread the news about Live365." You can find Lane's coverage here.

You can also find Live365's press release here.

Occupy Austin movement's web radio station launches on Live365

Thursday, December 8, 2011 - 11:50am

Occupy Radio AustinOccupy Austin's online radio station, Occupy Radio Austin, has launched on Live365. The station itself first launched in October (RAIN coverage here).

The station offers music, protestors' stories, poets, lecturers, comedians and Occupation news and alerts.

You can find out more from Live365's press release here.

While prohibitive licensing keeps Europe off-limits for most U.S. webcasters, it's a different story for on-demand start-ups

Monday, November 21, 2011 - 1:05pm

Former Live365 exec Rags Gupta suggests the reason we see on-demand music services starting-up in Europe (and not, say, Silicon Valley) is that it's simply easier to license the content there than in the U.S. As such, "investors in Europe aren’t as jaded when it comes to music startups as their U.S. counterparts," writes Gupta. "Index Ventures stands out in this regard. Bolstered by their success with Last.fm, they’ve added Songkick, SoundCloud, and RJDJ to their portfolio in recent years."

This apparent hospitality towards on-demand start-ups doesn't translate to Internet radio, unfortunately. Fragmented licensing regimes from country to country make it a virtually impossibly expensive and complex matter to license music separately for every country. This means many U.S. webcasters (e.g. Pandora) simply don't make their streams accessible outside the United States. 

Last.fm (purchased by CBS for $280 million) and Spotify (now with more than 2 million paying customers across the 8 countries in which it's available) are two obvious examples of music start-ups coming out of Europe. Another is French-based Deezer.

"The minute that I tell the major music labels that I am not interested in signing for rights to the U.S., the negotiations over terms become much, much easier," Deezer CEO Axel Dauchez recently told Reuters. The company apparently has no plans to launch in the United States. 

Read Gupta's piece in GigaOm here.

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