SoundExchange

Labels, performers have earned $204.4M from Net-, satellite-, cable radio so far in 2012

Friday, August 24, 2012 - 12:35pm

SoundExchange announced this week that it's distributed to sound recording copyright owners and performers $204.4 million for Q1 and Q2 of 2012. That money comes from royalties paid by webcasters, SiriusXM, and cable radio operations like Music Choice.

In its second quarter, SoundExchange distributed $95.8 million, the second-highest quarterly distribution in the organization's history, according to its press release. To date, SX has distributed more than $1 billion of royalties paid by non-interactive digital radio services.

SoundExchange General Counsel Colin Rushing will join SESAC's Greg Riggle on our "Music Licensing Roundtable" panel, moderated by Wilkinson, Barker, Knauer partner David Oxenford, at RAIN Summit Dallas September 18th.

"This quarter's distribution adds to what is shaping up to be a record breaking year for SoundExchange and reflects the continued growth of digital radio listenership and services," said Michael Huppe, president, SoundExchange.

Read the SoundExchange press release here.

RAIN news "quick hits": PWC on Net radio ad revs; Songza; SoundExchange; Live365; Senzari

Thursday, August 16, 2012 - 1:15pm

-Billboard reports (here) that a new PWC projection (here) says online radio advertising will grow by 11.5% from $465 million last year to $802 million in 2016. Satellite radio ad revenue will also rise, 9.4% compounded annually, from $74 million in 2011 to $116 million. Satellite radio subscription spending will increase from $2.6 billion in 2011 to $4.1 billion in 2016.

-Webcaster Songza says it's registered more than 2 million U.S. and Canadian users since June 1st, and that of all the users that have ever used Songza (since its official launch last September), over half of them are still active. Read more in TechCrunch here.  

-SoundExchange, the organization that collects and distributes money from Internet-, satellite-, and cable radio, has released a database of 50-thousand artists and labels that are owed over $60 million in unclaimed royalties. More from The New York Times Media Decoder blog here.

-Internet radio aggregator Live365 has announced the release of its dedicated application for the iPad. Read more here.

-Webcaster Senzari has launched a new proprietary music recommendation engine it calls AMP3 ("Adaptable Music Parallel Processing Platform"). Sensari says "The AMP3 technology is revolutionary within the music recommendation space, as it is the first engine to be modeled after a semantic network that includes an API architected similarly to Facebook's OGP (Open Graph Protocol)." Read more here

Brookings wants a law to make 801(b)(1) the standard for all non-interactive digital radio

Wednesday, August 15, 2012 - 1:30pm

A new paper from a Washington, D.C. think tank clearly recounts how entrenched interests crafted copyright law to establish copyright royalty obligations that put webcasters at a severe disadvantage to other forms of radio -- and calls on Congress to fix it.

The highly-regarded Brookings Institution last week published "Digital Music Broadcast Royalties: The Case for a Level Playing Field" in which it calls for Congress to enact legislation requiring the use of a consistent legal standard for royalties when it comes to "all non-interactive digital audio broadcasting."

We've often discussed (such as here) -- as have leading experts in the field, such as attorney David Oxenford -- the fact that sound recording performance royalties for Internet radio are determined using a significantly different (and, as it's been demonstrated, dramatically unfavorable) legal standard than those for other forms of radio. 

The bottom-line result of the different legal standard can be seen in recent Copyright Royalty Board determinations. For instance, the CRB, based on the widely-used "801(b)(1)" standard in copyright law, "concluded in a December 2007 ruling that the satellite radio royalty rates should start at 6% of gross revenue for 2006, rising gradually to 8% in 2012." The same group of judges, using the significantly different "willing buyer/willing seller" standard (instead of 801(b)(1)), determined a royalty rate for Internet radio of $.0021 "per performance" (songs x listeners) for 2012. Pandora, had it been paying this rate instead of its special discounted agreement rate with SoundExchange, "its payments to SoundExchange for sound recording performance licenses would likely have... approach(ed) or exceed(ed) its revenue of $80.1 million."

The Brookings paper is an excellent primer on the differences between U.S. Copyright Law's "801(b)(1)" standard (used for rate-setting for satellite radio and services like Music Choice) and the "willing buyer/willing seller" standard that 1998's Digital Millennium Copyright Act mandated for webcasting. It also very nicely recounts the history of webcasting royalties, CARP and CRB, the DMCA, and more. The author, Brookings nonresident senior fellow John Villasenor, has published articles in Forbes (covered in RAIN here and here) on this very topic.

Brookings has at least one ally in Congress already. In July we reported (here) that Utah Republican Congressman Jason Chaffetz has begun crafting a bill that would indeed replace the "willing buyer/willing seller" standard in webcast royalty determinations with the 801(b)(1) standard.

Download the Brookings paper here. Billboard.biz has also covered this story here.

Billboard says Spotify not-even-close to being labels' #2 source of revenue

Monday, July 2, 2012 - 11:35am

Last week we covered (here) Business Insider's report that on-demand music Spotify had become major music labels' second-largest source of revenue, behind the iTunes Music Store. Following up, Billboard.biz says (paraphrasing here): "Nuh-uh."

While "Spotify may be the second-largest digital account for major labels," (not paraphrasing), "Walmart can generate more music sales in one country than Spotify can generate around the world." Billboard.biz estimates Walmart had about $525 million in 2011 music revenue. Spotify total revenue was reportedly about $250 million, and probably less than $175 million went back to record companies.

Looking solely at the U.S. market, Spotify (or all on-demand streaming, for that matter) isn't even close to second-place. For instance, SoundExchange paid labels $292 million from the performance royalties it collected from satellite and Internet radio. "Subscription services as a whole returned only $132.7 million in 2011. Subscription services were also less valuable to labels than synchronization royalties ($196.5 million) and mobile platforms ($277.4 million)," the news source wrote.

Read Billboard.biz for more here.

RAIN news round-up

Wednesday, June 27, 2012 - 11:55am

There's so much news to cover today! We wanted to make it quick and easy for you to catch up with some of the great coverage from our colleagues, so here are some important news items in brief:

-- Yahoo, Spotify team up: Yahoo and Spotify have announced a global deal, that will have the leading on-demand music service replacing Rhapsody as Yahoo's music partner, and is perhaps the net portal's biggest music move since it shuttered its own on-demand service Yahoo Music Unlimited in 2008. Read more in the Los Angeles Times here and TechCrunch here.

-- TuneIn, Adam Carolla partner: Streaming aggregator and tuning service TuneIn and Carolla Digital have partnered to make the latter's shows (The Adam Carolla Show, ACE On The House, This Week With Larry Miller, Penn's Sunday School with Penn Jillette, and more) available on the TuneIn service. Read the press release here.

-- Slacker, ABC Radio launch lifestyle stations: Webcaster Slacker Radio and ABC Radio have launched "Men's Life" and "Women's Life," gender-targeted online talk radio stations. Read more in PCMag here.

-- Howard on Google TV: Reuters reports SiriusXM will make all of its programming available on Google TV, including Howard Stern's shows, plus live sports. A new app will allow listeners to pause live content and play back up to five hours. Google's I/O developer conference starts today in San Francisco. Read more here.

-- Radio One and a former employee battle over website, Facebook URL: Read Tom Taylor for more on the new "Streetz 94.5" in Atlanta, launched by former Radio One programmer Steve Hegwood, and the battle over the Streets94.5.com and www.facebook.com/Streetz 94.5. Taylor on Radio-Info coverage is here.

-- Leykis, Lionel on Talk Radio online: At the 2012 Talkers New Media Seminar, talk radio legend Tom Leykis appeared with LionelMedia's Lionel on a panel to talk streaming and podcasting strategy. Watch video (by Art Vuolo) from Talkers.com here.

-- ASCAP, BMI, SoundExchange obsolete, says economist: Stanford economist Roger Noll, at the recent recently asked a group of attorneys at a recent American Antitrust Institute conference, suggests we now have the information technology which has "eliminated the reason for (royalty-collection organizations) existing in the first place. Digital Music News reports here.

Aid for Pandora, or a new path for broadcasters? Two more industry experts analyze CC/Big Machine deal

Monday, June 18, 2012 - 11:15am

Clear ChannelWeeks later, Clear Channel's groundbreaking royalty deal with Big Machine is still sending tremors through the industry (RAIN coverage here). Two experts recently shared what they see as the takeaway from the new partnership.

Music industry attorney Steve Gordon writes in Digital Music News (here) that Clear Channel's deal is good news for Pandora and anyone else looking for more equitable streaming royalty rates. Clear Channel doesn't want to pay the "ridiculous" royalty bills that Pandora has now, argues Gordon, "Which means that instead of screaming bloody murder into the wind, Pandora now has the biggest ally imaginable."

Meanwhile, co-founder and Chief Operating Office of Triton Digital Mike Agovino writes in TechCrunch (here) that he sees Clear Channel "[leading] the way for traditional radio providers looking to go digital."

Agovino hopes more broadcasters will -- like Clear Channel -- start seeing digital as an opportunity, not a threat. "The key to making it online is working with the music industry to make that digital future a reality –- sooner rather than later."

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