Radio giant Clear Channel Media and music major Warner Music Group have reached a deal that will pay Warner and its music artists for traditional radio play for the first time.
Warner artists such as CeeLo Green and Bruno Mars will also get a bigger share of commercial promotional time across Clear Channel’s broadcast stations, as well as digital radio outlets, outdoor events and TV shows.
Record companies have been fighting to get paid for traditional play, which has long been seen as promotional time. While radio stations haven’t paid to play songs, new digital platforms such as Pandora do pay royalties each time they stream a song.
With the growth of these online music services, the record labels have begun to clamor for some form of payment from traditional radio owners. The amount Clear Channel will pay per song was not disclosed.
Online radio music services account for around 15 percent of the music industry’s annual $7.1 billion in revenue, according to the Recording Industry Association of America.
Clear Channel’s deal with Warner also covers digital royalties for streaming songs via its iHeartRadio service and other online platforms. Clear Channel has 850 radio stations and claims 60 million unique users per month across its digital sites.
The deal will help Warner break new artists, thanks to Clear Channel’s agreement to give up a share of commercial time to dedicate to new music discovery for Warner acts.
The agreement giving Warner artists preferential treatment is likely to put pressure on the other music majors, Sony and Universal, to come to the table with Clear Channel CEO Bob Pittman.
They have been asking for terrestrial radio fees that Pittman has so far been unwilling to pay without striking broader deals that include digital royalties and other platforms.
Pittman’s strategy has been to strike deals with smaller, independent labels initially. His first deal to pay for performance rights for traditional radio was with Taylor Swift’s label, Big Machine.
Pittman said the Warner deal will enable the radio giant to have more predictable costs. While the National Association of Broadcasters pays 0.21 cents per Web play, broadcasters don’t know exactly how many listeners tune into traditional play.
The deal was spearheaded by Warner’s CEO Stephen Cooper and COO Rob Wiesenthal.