9-21-2012
Entercom made the biggest splash of the week when it announced it would start to pay artists directly for music played over the air. That's something that had never been done -- until this year, when Clear Channel inked a similar deal with Big Machine Label Group. On a panel called "The Relationship Between Music and Radio...We Need Each Other," Clear Channel's Tom Poleman (pictured) said we're going to see more deals with labels soon.
Poleman wasn't specific about which label Clear Channel would be teaming up with, but he did say, "There are conversations happening every day, and there will be more announcements." Big Machine Label Group CEO Scott Borchetta was also on the panel, and he said he's received his first check from Clear Channel: "It was significant and it was a step in the right direction."
The challenge broadcasters are dealing with now is fees paid to SoundExchange for music heard online; going directly to the artists cuts SoundExchange out of the process. Borchetta's Big Machine has been the only label to make deals so far; Borchetta said that's only because, as an independent, he doesn't need to go through a team of lawyers to get deals approved.
Clear Channel and now Entercom are both hedging their bets on where the consumer of the future will listen to music. With this deal, and any future deals, both Bob Pittman and David Field are admitting that listeners will migrate to the Internet, specifically to mobile devices, to listen to radio stations. These companies are making deals now -- presumably long-term deals -- that give artists a taste of over-the-air revenue they've never had before, in exchange for a low or locked-in fee for online play. Clear Channel and Entercom are taking a risk and, most likely, losing money up front by paying for spins over the air. What they are betting on is that the money spent now will be made up in what they save later, when online and mobile listening become the norm.
As Poleman said more than once at the panel: We should be hearing about more deals soon.
(9/21/2012 3:02:57 PM)
Soooo . . one has to be on the clear channel's play list to get paid? Interesting
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