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RAIN 3/3: SX says they've paid far more to artists for streaming than Billboard reports

Posted on: 03/03/2010


Spokespersons for digital royalty agent SoundExchange tell RAIN that the earnings figures based on non-interactive webcasting from a recent Billboard ranking (and the basis for follow-up analysis by Reuters) are wildly inaccurate, and are actually far higher than portrayed.

In yesterday’s issue of RAIN (here) we briefly covered Billboard’s publication of its annual report, “Money Makers,” which ranks the music industry’s top-earning artists. Reuters, presumably with a full copy, also covered the report, and wrote:

The results show that of the more than 100 artists examined to compile the Money Makers list, only 10 made more than $2,000 from non-interactive streams in 2009, with Beyonce topping the list with an underwhelming $5,000.

In a phone conversation and e-mail following our coverage, SoundExchange spokesperson Laura Williams says not only are the figures wildly off the mark, her organization (the only possible source for numbers like this) was never even contacted by Billboard. SoundExchange is the music industry body that collects and distributes digital performance royalties to copyright owners and performers from, among other sources, non-interactive webcasters (i.e. Internet radio).

Contrary to the statement that only 10 artists earned more than $2,000 for their play on Internet radio, Williams revealed, “In fact, more than a thousand artists received more than $2,000 from SoundExchange for non-interactive webcasting only…“ (SoundExchange also collects and distributes royalties for satellite, cable streaming, and digital business background music services.). Moreover, since Sirius XM combines its satellite and online music use reporting, “this webcasting stat also does not account for the massive web presence of Sirius XM and royalties generated via that stream,” Williams added.

The bulk of yesterday’s issue was actually our reaction to Reuters’ characterization of the Billboard findings. The Reuters article suggested that online streaming, “hailed as a panacea for the industry’s ills,” was falling far short of its goal, based on the Billboard report (more on this below).

Williams further revealed to RAIN that more than 500 artists earned “well above $9,000 in 2009” webcasting royalties. Beyonce, who allegedly topped the list of non-interactive streaming royalty earners, “made exponentially more than the $5,000 reported by Billboard, and actually isn’t even close to #1 among earners.” Although SoundExchange won’t disclose exact earnings of specific artists, they revealed 2009’s top-earner made “well into ‘six-figures’” from Internet radio.


It was heartening to get that call from SoundExchange and get confirmation that the numbers from the Billboard report were inaccurate. In fact, some quick “back of the napkin” math on my part would probably have led to the same conclusion. But it’s nice to hear it straight from the horse’s mouth. [“Hat tip,” by the way, to Soundies’ Kevin Parks, who commented on the story yesterday: “I’m also confident that Billboard’s estimated per artist streaming revenues, ‘based on SoundExchange’s rate settlement with webcasters,’ is just plain wrong. I’ll eat my hat if Beyonce’s royalties were not significantly more than their estimate”].

Secondly, all of this is actually tangential to the argument we made against Reuters’ conclusion yesterday, that is: (1) Internet radio isn’t designed to, and can’t, replace touring and sales revenue for artists; and (2) Internet radio benefits artists in many ways beyond simply the royalties it pays. We felt it was unfair to judge Internet radio’s worth merely on the royalty revenue it generates for artists. Now, based on what SoundExchange confirms, even when measured with that incorrect yardstick, Internet radio still looks pretty good (at least for that very small sliver of top-earning artists who likely don’t need the exposure that webcasting affords).

Finally, a mea culpa: Yesterday I made a faulty comparison between the royalties Internet radio and satellite radio pay to SoundExchange (since removed). While it’s true that Internet radio pays a far higher percentage of its revenue to copyright owners and performers than satellite radio, the reality is that satellite radio still generates far more in royalties based on that industry’s far-higher annual earnings. — PM


Crowd-sourced radio platform Jelli was the subject of a nice article in today’s USA Today. Columnist Jefferson Graham spoke with founders Mike Dougherty and Jateen Parekh. On the air seven nights a week on CBS Radio’s Live 105 in San Francisco, Jelli will launch on several new stations this week, including broadcasters in Philadelphia and Las Vegas.

The syndicated Jelli service works as a combination of the affiliate station website and the on-the-air programming. Listeners request music, and vote songs “up” or “down,” online, with those tunes with the most votes getting aired. Graham also acknowledges radio consultant Mike McVay’s similar service, Listener Driven Radio, currently available in Minneapolis.

Dougherty, who’s also CEO, is slated to participate in our RAIN Summit North in Toronto on March 12 (more info here).

Read USA Today’s story (there’s a brief video too) here.


If you click through to the USA Today article, you’ll see I spoke to Graham for his article on Jelli. A clearer reflection of my opinion of Jelli is that, for decades, radio stations have had special shows or dayparts where the listeners “took control” of the radio station by voting via request lines. Jelli is a high-tech, sophisticated version of this concept. It’s very cool. — KH

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  1. Are we sure that SX isn’t referring to overall amount collect as opposed to the actual amount sent to the artist? They are saying that they cut checks to artists that were in the 6 figure range? I’d want to hear them say that very specifically…

    Jason Stoddard · Mar 3, 09:00 AM · #

  2. Hi Jason. I didn’t include it in the coverage, but SX assured me that the figures they quoted were based on payments made, not merely on collections.

    Paul Maloney · Mar 4, 06:53 AM · #

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