Here’s Why Warner Music’s Deal with Clear Channel Could be Groundbreaking for the Future of the U.S. Music Biz


From Billboard:

The National Assn. of Broadcasters has successfully beaten back every legislative attempt by record labels and artists to force broadcast radio to pay such an artist performance royalty, something that is paid in the rest of the world, but is only paid here in digital broadcasts.

In doing these deals, Clear Channel Media Holdings CEO Bob Pittman, was going against the grain in the radio industry, but he says he has made these deals because he wants to build a successful digital broadcast business, something that the current rate structure prevents, according to him.

The statutory payment rate for webcasting is $0.0022 per song for a compulsory license is predicated on a per play rate per listener. Since radio can’t control how many listeners will tune in, it can’t predict how much will have to be paid out. Pittman says these deals give him a predictable cost structure that allows him to build an economically feasible business model.

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