Music Business

Are Direct Royalty Deals With Clear Channel Media The New Payola?

image from www.musicrow.comStarting last June, Big Machine (Taylor Swift, Tim McGraw and others) and several other large independent labels struck precedent-setting deals with Clear Channel that bypass ASCAP, BMI, SESAC and SoundExchange. In exchange for smaller payments on digital play now, for the first time ever, these labels and their artists are directly participating in terrestrial radio revenue. 

One consequence of the new relationship is that both the labels and Clear Channel now have a major incentive to work together in ways that could lead to less airtime for other music.

image from content.clearchannel.comAs an example, today Clear Channel announced they've partnered with Big Machine to launch The Band Perry‘s new album with an extensive two week on-air and online "Artist Integration Program" across Clear Channel’s platforms.

It's Legal But…

The Band Perry, along with many of the other artists releasing new music this month, are popular with fans; and it's likely that radio would play their new record.  But will it get more airtime because of the direct Big Machine/Clear Channel deal?

It's all perfectly legal. Still, a direct financial relationship between a record label and America's largest radio group based on an undisclosed deal could certainly be viewed as unfair competition.

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  1. “This communication responds to the post on Hypebot by Mr. Bruce Houghton regarding Clear Channel and its dealings with SESAC, a performing rights organization. SESAC is not aware of any third party arrangement established by Clear Channel that would alleviate their need for a SESAC license. SESAC has long enjoyed a mutually beneficial working relationship with Clear Channel that continues to this day and we look forward to a mutually productive future.”

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