Digital royalties to composers, songwriters and music publishers have grown quickly since last year, while those from physical sales are still dropping off. Half-year results from the MCPS-PRS royalty collector showed payouts from online services up 40 percent in the first half of the year, from the same period last year, while those from CDs and such fell nine percent.

The alliance said payouts “were boosted by postings of self-made videos – often of fans performing the songs themselves to camera; the craze for posting group dance videos also contributed to the findings”. Broadband MD Andrew Shaw said “hairbrush divas” are driving revenue - and could uncover tomorrow’s pop stars. In other words, click play on this video and Leona Lewis will get a micropayment…

This suggests properly licensed social networks, download stores and online radio sites could help restore revenue lost from the drop-off in CD sales… even if the music business can’t convince consumers to part with cash any longer, it’s hoping to charge services for using its wares. MCPS-PRS credited most of the payments to iTunes Store.

Still, online royalties are rather small, at just £7 million, up from £5.5 million. That’s the payout from 60 million downloads and streams that were recorded, and goes to the collector’s 60,000 members.

The alliance said the number of payouts it’s making is rising “exponentially” thanks to licensed online music services. It first struck a licensing deal with YouTube last year that saw the video site pay a flat fee upfront, and also has deals with the likes of Bebo and iTunes. Payouts from physical music sales were more than forecast, thanks to licensing of formats like USB sticks and DVDs. But income from CDs fell a whopping 15 percent as falling disc sales hit home. Most importantly, the total royalty payout was up six percent to £286.1 million.

Early bird ticket sales are open for our EconMusic conference on Sep. 23 at the Natural History Museum in London

Most performed online songs…

1. Leona Lewis, Bleeding Love
2. Soulja Boy Tellem, Crank Dat Soulja
3. Timbaland / OneRepublic, Apologize
4. Rihanna ft. Jay-Z, Umbrella
5. Sean Kingston, Beautiful Girl
6. Britney Spears, Gimme More (It’s Britney, Bitch)
7. T2 ft. Jodie Aysha, Heartbroken
8. Sugababes, About You Now
9. High School Musical, You Are The Music In Me
10. Timbaland ft. Keri Hilson, The Way I Are

• Music Biz Doubles On-Demand Income, Digi Sales Still Small
• Music Biz Got £5.5 Million PRS Royalties From Digital In Q1
• Last.fm Agrees To Pay Musicians For Web Radio Streams
• YouTube Reaches Deal With UK Music Society on Royalties