Internet radio royalty payouts were at their highest mark ever during 2014 (surprising to no one), totaling more than $773 million over the year, according to SoundExchange. SoundExchange was created during 2003 to collect and distribute earnings gathered from non-terrestrial radio forms such as internet, satellite and cable radio and has seen constant growth every year since (from Billboard).
Last year marks a 31 percent increase in cash collected, up from $590 million during 2013, which in turn was up from $426 million in 2012. SoundExchange's collections really took off during 2008, following the release of the Pandora app for iPhones, which raised the amount earned that year more than 175 percent, from $36 million during 2007 to $100 million.
That growth shouldn't automatically be considered as a good thing. Although the money raised from internet radio (these numbers don't include royalties from streaming) has risen consistently, it has a strong correlation to the fall in actual album sales, a format much more profitable to the music industry. So although more and more people are using internet radio services and satellite providers, they tend to buy less and less music.
On the other hand, this might also suggest that internet radio services provide a healthier outlet for music consumption than piracy. The music industry has to do whatever it can to bring in money these days.
Trends suggest that the growth rate in SoundExchange distributions is starting to shrink and level out. This doesn't mean that total payouts will actually shrink, but don't expect expect them to continue rising at the same extreme rate. That said, it looks like numbers will be in for around a 25 percent rise during 2015, potentially bringing the total up to nearly $975 million, looking to break a billion during 2016.
Keep buying albums but keep pushing those online payouts as well. The more music we consume, the better.
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