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SoundExchange Gets 90% Of It's Revenue From SiriusXM & Pandora

image from collected 90% of it's 2011 revenue from only two sources: SiriusXM and Pandora, according to new analysis from Live365 general counsel Angus MacDonald. The dominance of just two income sources is particularly poignant at a time when SiriusXM is leading an effort to by-pass SoundExchange entirely and pay rightsholders directly.

Based on court filings from SirisXM, MacDonald estimates their royalty payments to SoundExchange at $200 million in 2011. Based on SEC filings, Pandora's  payments to SoundExchange totaled $136.3 million in the 12 months ending January 31, 2012.

Total SoundExchange's 2011 publically stated revenue was $371.9 million, making Pandora and SiriusXM's payments 90% of revenues, according to MacDonald's calculations.

"That is a staggering figure," MacDonald told the RAIN newsletter, "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."

But will artists also be well served by what MacDonald terms a "fair" royalty deal for Pandora and Sirus XM. And if SoundExchange is eliminated as the middleman, who is left to represent the interests of artists and rightsholders?