MUMBAI: Country-pop singer Taylor Swift’s record label ‘Big Machine’ has inked a pioneering deal with radio giant Clear Channel that pays the singer and artists for their songs played.
With this association, Swift and other artists in the Big Machine Label Group, including Tim McGraw and Reba McEntire will get paid for songs played on Clear Channel’s traditional radio stations. The first of a kind deal gives Clear Channel the incentive to boost its online audiences without fear of cost overruns.
The artists have agreed to cap their royalties from play on Clear Channel station websites and simulcasts on its iHeart Radio streaming service to a portion of a fixed percentage of revenue. The artistes have termed into multi-year deal which has not been disclosed.
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Big Machine CEO Scott Borchetta said, “Clear Channel is making the equivalent of a down payment on the future of digital radio. The revenue in question is ‘not millions of dollars’ annually but ‘substantial’ for a small label. We’re going to more than double our income from Clear Channel in the short term, and they’ll make it up on the back end as digital continues to grow.”
Clear Channel CEO Bob Pittman said in a statement, “We think this investment is an opportunity worth taking to align our interests in all of our revenue streams and grow digital listening to its full potential.”
Performers and their record labels are allowed by law to take a mandatory minimum payment per play online, which equates to a fraction of a penny per listen. But the growth of online listening on mobile devices and in cars is outstripping stations’ ability to sell online ads.
Clear Channel is looking to cut similar deals with other labels, while Big Machine is ready to take the model to other radio broadcasters. Currently, the revenue-share model does not apply to custom listening online, where listeners select genres or artistes and stream music that are randomly generated within certain guidelines.
