SoundExchange Collected Over Half-Billion in 2012; Almost Half From Pandora

The following is a guest post by Angus M. MacDonald, a digital media attorney.

Last week, SoundExchange publicly released its Annual Report (Draft) for 2012. According to the report, SoundExchange’s 2012 collections from all statutory services amounted to $502.2 million – yes, a half-billion dollars! And it was another impressive year-over-year increase in royalty collections for SoundExchange. For 2011, SoundExchange collected $372.2 million, meaning that it collected$130 million (or 35%) more in 2012 than it did in 2011. SeeSoundExchange’s Annual Report (Draft) for 2012, p.7.

However, as discussed below, Pandora accounts for all of SoundExchange’s revenue growth. In its most recent 10-K filing (released a few weeks ago), Pandora paid 55.9% of its revenues to SoundExchange for the fiscal year that ended January 31, 2013. See Pandora’s 10-K, p.22 (“For our fiscal year ended January 31, 2013 we incurred SoundExchange related content acquisition costs representing 55.9% of our total revenue for that period.”). According to the same 10-K filing, Pandora’s total revenues last year were $427.1 million.

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