Report: SiriusXM, Pandora Royalties Comprise 90% Of SoundExchange's Revenue
April 12, 2012 at 11:16 AM (PT)
One day after DIGITAL MUSIC NEWS reported that PANDORA comprises almost 37% of the royalty revenue accrued by SOUNDEXCHANGE (NET NEWS,4/11) comes news from LIVE365 General Counsel ANGUS MACDONALD that 90% of SOUNDEXCHANGE's 2011 revenues came from just two sources -- PANDORA and SIRIUSXM.
RAIN reports that MACDONALD estimates SIRIUSXM's royalty payments to be around $200 million in 2011 (based on its MARCH 23rd antitrust lawsuit against SOUNDEXCHANGE [NET NEWS, 3/27]), while PANDORA paid SOUNDEXCHANGE $136.3 million in the 12 months that ended JANUARY 31st, 2012.
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
Combined, the two parties paid in the neighborhood of $336 million to SOUNDEXCHANGE in 2011. SOUNDEXCHANGE's total 2011 revenues were reported to be $371.9 million.
"That is a staggering figure," MACDONALD said, "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."
In an ALL ACCESS Power Player interview (3/20), PANDORA Pres./CEO JOE KENNEDY noted that "We look forward to participating in the arbitration process that will set royalty rates for our use of sound recordings for the 2016-2020 time period."
Meanwhile, SIRIUSXM's lawsuit against SOUNDEXCHANGE to give it the right to negotiate with the labels individually is ongoing.