Music

Warner artists get paid for radio play under landmark Clear Channel deal

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Social Links for Claire Atkinson
Published Sep. 12, 2013, 11:19 a.m. ET
Bruno Mars performs at the 2013 MTV Video Music Awards. The Warner Music, Clear Channel deal will give Warner musicians, like Mars, a bigger share of promotional time.
Bruno Mars performs at the 2013 MTV Video Music Awards. The Warner Music, Clear Channel deal will give Warner musicians, like Mars, a bigger share of promotional time. WireImage

Radio giant Clear Channel Media and music major Warner Music Group have reached a game-changing deal that will see Warner artists paid for terrestrial radio play for the first time.

In exchange, Clear Channel will get preferential rates for streaming songs through its iHeartRadio service and other online platforms.

Record companies have been fighting to get paid for terrestrial airplay, which has traditionally been seen as promotional time. While radio stations haven’t paid to play songs, new digital platforms such as Pandora do pay royalties for each song they stream.

With the growth of these online music services, the record labels have begun to clamor for some form of payment from terrestrial radio owners. The amount Clear Channel will pay per song was not disclosed.

Under the deal, Warner artists such as CeeLo Green and Bruno Mars will also get a bigger share of promotional time — including more air play — across Clear Channel’s broadcast stations, digital radio outlets, outdoor events and TV shows.

Clear Channel has 850 radio stations and claims 60 million unique users per month across its digital sites.

The agreement giving Warner artists special treatment is likely to put pressure on the other big labels, Sony and Universal, to reach similar deals.

“The team at WMG understands that old formulas don’t work as well as they must in the digital age, and that we have to think differently to build a robust future for the music industry,” Clear Channel CEO bob Pittman said in a statement.“This agreement begins that new era, and will help both companies thrive in the digital world.”

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 deal was spearheaded by Warner’s chief operating officer, Rob Wiesenthal, who recently closed Warner’s acquisition of EMI label Parlophone.

“From high visibility live and televised events to unique digital services, the breadth and strength of Clear Channel’s platforms will enable us to propel our artists’ careers in an extremely competitive marketplace,” Wiesenthal said in a statement.