Monday, March 22, 2010

Pandora is Huge Source of Internet Royalty Income

Pandora, the Internet streaming radio system we are all familiar with, has been able to survive legally by paying a royalty rate to be distributed to artists. The numbers that have been released show just how much they are contributing to the music industry.

In 2009, Pandora's revenue topped off at $50 million. SoundExchange, the group that collects internet radio royalties, took a portion of that to cover their fees and this topped at $28 million. SoundExchange has reported that Pandora's royalty payments account for 45% of their total royalties from non-interactive streaming online radio. Even though the company is still only 1% of the the overall radio marketplace, they still provide a substantial source of income for the music industry. And, unlike broadcast radio, internet radio royalties also go to the artists themselves.

This shows that online radio is a valid source of income for the music industry, especially something that gains as much popularity as Pandora. I think Pandora will only continue to grow, and the money getting paid to SoundExchange will increase. Broadcast radio may not be as popular as it used to be, but online radio seems to be a good source of income that can hopefully be capitalized on and grow to keep the music industry afloat.

--Ashley Snider


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