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SoundExchange Crosses $1 Billion Mark

But faces challenges from broadcasters, satellite radio

SoundExchange says it has now distributed $1 billion in royalty payments since it was founded in 2000.

SoundExchange President Michael Huppe calls the amount a milestone that reflects that digital music is evolving and will continue to grow. It’s “about multiple revenue streams, not just one,” he told the New York Times.

Tasked by Congress, the nonprofit digital performances rights organization collects performance royalties from SiriusXM, Pandora, cable radio and similar services that stream sound recordings and distributes the funds to recording artists and their record labels. So-called “on-demand” digital services like Spotify and Rhapsody generally pay record companies directly.

In the first quarter of 2012, SoundExchange distributed $108.6 million in royalties, marking the first time such distributions have exceeded $100 million in a given quarter. The organization cites increased collections as well as enhanced data management on an improved technology platform for the increase.

The organization faces challenges going forward. SiriusXM, which says it paid $200 million in performance royalties last year, is suing SoundExchange in an effort to lower its music fees.

Clear Channel and record label Big Machine recently signed a deal directly between the two companies for digital and broadcast performance royalties that bypasses SoundExchange.

Huppe declined to comment on the Sirius suit, telling the Times “We don’t feel particularly under assault right now.”