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Thread: BREAKING: BMLG, Clear Channel Make Performance Royalty Deal

  1. #1
    Ultimate Carrie Fan Cps235's Avatar
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    BREAKING: BMLG, Clear Channel Make Performance Royalty Deal

    » BMLG, Clear Channel Make Performance Royalty Deal: Big Machine Label Group and Clear Channel Media & Entertainment have entered an agreement that gives BMLG and its artists a share of Clear Channel's terrestrial broadcast revenue. Wholly-owned BMLG labels Big Machine and Valory, and their artists, will participate in this new revenue stream, which makes them the first record company to receive what is commonly known as a performance royalty. "For years, record companies and media companies have looked for a new way to do business together that would bring our interests into line," says BMLG President/CEO Scott Borchetta. "In Clear Channel, I found partners who shared my big-picture view of how we could structure an agreement to benefit all involved. Not only does this partnership enable Big Machine to participate in terrestrial broadcast revenues, but we are also helping to grow digital radio – a great opportunity for all of us and a breakthrough opportunity for Big Machine artists."
    "Scott Borchetta has reinvented the music business in many important ways over the years, from distribution and artist development to promotion and advertising," says Clear Channel CEO Bob Pittman. "Focusing that same creativity on how best to grow the music business, Scott has developed this new model with us to let his labels and artists participate in the revenue of broadcast radio immediately and in digital radio as it builds. This is a big step, but 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 with record labels and their artists as our partners. This landmark agreement creates a structure that makes sense for both our companies – but most of all for music fans."
    "Today, 98% of our listening is terrestrial broadcast and 2% digital – with record labels and artists only paid for the 2%,” says Clear Channel Media & Entertainment Chairman/CEO John Hogan. "This new agreement expands label and artist participation from just digital to terrestrial broadcast radio revenues in one comprehensive framework that will give all of us a great incentive to drive the growth of the digital radio industry and allow everyone to participate financially in its growth. This market-based solution helps bring the best in music to radio listeners wherever they want to hear it."

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    Ultimate Carrie Fan supercarriefan's Avatar
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    A lot can be said about Scott Borschetta, but he is a great businessman.
    I wonder if we will see more labels follow him in this endeavor.
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    Obsessed Carrie Fan 12russ79's Avatar
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    Quote Originally Posted by supercarriefan View Post
    A lot can be said about Scotty Borschetta, but he is a great businessman.
    I wonder if we will see more labels follow him in this endeavor.
    Your right Super a lot can be Said about him....
    ** *** ** **** *******.... LOL

    As the old AC/DC song goes WHO MADE WHO?
    Did SWIFTY make BORESHEADA or VERSE VISA... LOL

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    Carrie Guru rainbow1's Avatar
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    So, I guess this means that the BM artist will receive more money for their work than say, artist on Sony? Won't Clear Channel play them alot more too? Hmmmm....

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    Carrie Guru pklongbeach's Avatar
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    I'm alittle vague on this.
    Digital is not radio, right?
    Digital is more like Pandora isn't it?
    Isn't this deal continuing to put the nails in the coffin of radio? The industry that created Taylor Swift in the first place?
    Someone help me understand this.
    I mean don't get me wrong. It makes more money for the artist and the record label. But won't it cripple radio?

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    Ultimate Carrie Fan Farawayhills's Avatar
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    Traditionally, songwriters get the royalty for mehanical (e.g radio) music. This agreement gives performing artrists a royalty too.

    The downside would come if this is extended to areas like the internet. This could price many niche broadcasters out of business. The last thing I'd want is for the top 40 on Clear Channel to become the only music it's easy to hear.
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    Quote Originally Posted by supercarriefan View Post
    A lot can be said about Scott Borschetta, but he is a great businessman.
    I wonder if we will see more labels follow him in this endeavor.
    Scott is great at what he does, his job is to get whatever he can for his clients and that is exactly what he does, to be honest IMO he is the best in the business.
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    Ultimate Carrie Fan supercarriefan's Avatar
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    There is an article about this on All Access that contains the letter that was sent to programmers about this change. It does clarify some points.
    CCM+E To Share Revenue Streams With Big Machine In New Financial Model | AllAccess.com

    In the letter, it is stated that Clear Channel may look into striking similar deals with other labels.
    Borchetta might not be everyone's cup of tea, but he is innovative in his business. He is very much willing to adapt to the changes within the industry and do what is best going to benefit his label and his artists. I don't always like the way he does things, but at least he is doing something to ensure his label and artists will be successful.
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    Ultimate Carrie Fan clh_hilary's Avatar
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    I'm not 100% sure of what is this going to lead to.

    If it's about all radio starting to pay labels money for playing their songs (Well MORE money than they used to pay), then it means Clear Channel wants to continue and expand their monopoly on the radio business, but it seems like at the moment it almost looks like CC is voluntarily giving more money to record labels? How would this benefit them?

    Perhaps labels will then start to forbid non-paying radio stations from playing their materials? Or give more exclusive materials, i.e. free albums, free tickets, interviews, etc. only to CC stations so other stations will be marginalized?
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    Carrie Guru pklongbeach's Avatar
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    Absolutely. This (if I understand it to be what it is) will cripple many at radio.
    While some thing it is great to make as much money as you can as fast as you can despite the damage you do, it is not good for a free market system and the system will fail. The system as it exists right now I mean.
    Those of you who want Scott extremely rich and sucessful and "incharge" will certainly get what you want. And music will still becoming out of a speaker for you to enjoy.
    But don't expect it to be Art.
    Don't expect it to be diverse.
    Don't expect it to be cheap (or free for that matter).
    Don't expect to have any say in what you even want!

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    Ultimate Carrie Fan Farawayhills's Avatar
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    Most terrestrial radio is already the medium with the narrowest playlists (significantly narrower than satellite radio, and infinitely narrower than what's available on the internet). Terrestrial playlists have, on average, become narrower still since consolidation of radio stations into big companies like Clear Channel. As this appears to share the existing revenue stream in a different way, it - in itself - is unlikely to change the existing picture much.

    The potential danger though, as I fear, would be if there grows pressure from the record labels and performing rights organizations to extend similar payment models to all forms of broadcasting. Niche (that is, non-commercial hit) broadcasting is already burdened by changes made in recent years to the royalty payments required. If this adds further financial burdens, it could narrow the range of music easily avaiable, particularly hitting the majority of artists who don't have the protection of a major record label, and rely on internet and specialist exposure to sell their albums and attract people to their concerts.

  • #12
    Ultimate Carrie Fan supercarriefan's Avatar
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    Quote Originally Posted by pklongbeach View Post
    Absolutely. This (if I understand it to be what it is) will cripple many at radio.
    While some thing it is great to make as much money as you can as fast as you can despite the damage you do, it is not good for a free market system and the system will fail. The system as it exists right now I mean.
    Those of you who want Scott extremely rich and sucessful and "incharge" will certainly get what you want. And music will still becoming out of a speaker for you to enjoy.
    But don't expect it to be Art.
    Don't expect it to be diverse.
    Don't expect it to be cheap (or free for that matter).
    Don't expect to have any say in what you even want!
    I don't think anyone here is saying they want Borchetta to be extremely rich and successful and in-charge. I was simply saying in my earlier posts that I think Borchetta is smart in considering new ideas that will benefit his artists. This isn't just about making him rich. It is also about the artists getting more money when their songs are played which isn't a bad thing because artists are getting the short end of the stick financially in the digital age.
    Most of what radio plays now isn't something I would consider art, or diverse lol, and the audience certainly doesn't truly have much say in what they want. So, basically, things will stay the same I guess with this new deal by your thinking lol.
    Also, music isn't cheap now when you think about it.
    Times are changing in terms of radio and the way we get access to music. The labels have to make changes that are best going to benefit their business interests and the interests of their artists in the long run. Terrestrial radio is already in a downward spiral as we were discussing in the thread about #1s, and digital radio allows listeners an alternative.
    I agree with Farawayhills that it won't have a big effect on what happens on mainstream radio, and that it could have a bigger effect on smaller markets that don't necessarily play the big mainstream hits. It will be interesting to watch how this all plays out.

    Honestly, some people don't like the idea of this deal simply because of the name attached. If this deal was established by Sony, I doubt some people would be as hesitant to accept it.
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    Carrie Guru pklongbeach's Avatar
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    The 1% continue to get richer while throwing pellets to a waiting, and gowing complaisent, mass!

  • #14
    Carrie Guru pklongbeach's Avatar
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    Quote Originally Posted by supercarriefan View Post
    I don't think anyone here is saying they want Borchetta to be extremely rich and successful and in-charge. I was simply saying in my earlier posts that I think Borchetta is smart in considering new ideas that will benefit his artists. This isn't just about making him rich. It is also about the artists getting more money when their songs are played which isn't a bad thing because artists are getting the short end of the stick financially in the digital age.
    Most of what radio plays now isn't something I would consider art, or diverse lol, and the audience certainly doesn't truly have much say in what they want. So, basically, things will stay the same I guess with this new deal by your thinking lol.
    Also, music isn't cheap now when you think about it.
    Times are changing in terms of radio and the way we get access to music. The labels have to make changes that are best going to benefit their business interests and the interests of their artists in the long run. Terrestrial radio is already in a downward spiral as we were discussing in the thread about #1s, and digital radio allows listeners an alternative.
    I agree with Farawayhills that it won't have a big effect on what happens on mainstream radio, and that it could have a bigger effect on smaller markets that don't necessarily play the big mainstream hits. It will be interesting to watch how this all plays out.

    Honestly, some people don't like the idea of this deal simply because of the name attached. If this deal was established by Sony, I doubt some people would be as hesitant to accept it.
    Everything you say here is true. And that makes it all the sadder.
    I need a pellet.
    (but I will respectfully disagree with regard to thinking it would be ok with me if it were sony doing it. You don't really think I am that shallow do you?)

  • #15
    Ultimate Carrie Fan clh_hilary's Avatar
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    At the same time recording artists are also saying they can't earn much from making music and a lot of them have been fighting for getting paid by performing the songs, not only from writing the songs.

    For example, Ke$ha sung "Right 'Round" with Flo Rida which became a massive hit, and she did not get anything outside of the initial payment as a 'backup singer'. Vocalists nowadays only get money from actual sales and initial payments/contract payments (if any) and only songwriters get money from airplay. So in a way you can see this as an 'advancement' because the artists are not earning much money with moderate success. But then, this may indeed just narrow the playlists as radio might be even more reluctant to play music from new/unknown artists, as they may not be able to get much in return from them (no freebies, and no established fanbase to tune in to radio).

    Nevertheless, I'd think this basically is an American-focused issue ever if it becomes the general practice globally, as radio are not nearly as influential outside America and radio in its nature is narrow and safe anyways.

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    I just think this will be the same - in regards to listening to the same artists all the time. I don't think I want to listen to just Sony or BM artists all the time. I want a diversity of music. I don't like to listen to the same stuff all the time. Which is why I love my ipod because it has many different artists and styles and I don't listen to WGWCH all the time! (I love Russ' acronym!) Radio is changing and I think this is one of them. So maybe #1's won't mean much anymore if this happens because why have a country radio station when record labels will have their own channel?

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    Quote Originally Posted by supercarriefan View Post
    I don't think anyone here is saying they want Borchetta to be extremely rich and successful and in-charge. I was simply saying in my earlier posts that I think Borchetta is smart in considering new ideas that will benefit his artists. This isn't just about making him rich. It is also about the artists getting more money when their songs are played which isn't a bad thing because artists are getting the short end of the stick financially in the digital age.
    Most of what radio plays now isn't something I would consider art, or diverse lol, and the audience certainly doesn't truly have much say in what they want. So, basically, things will stay the same I guess with this new deal by your thinking lol.
    Also, music isn't cheap now when you think about it.
    Times are changing in terms of radio and the way we get access to music. The labels have to make changes that are best going to benefit their business interests and the interests of their artists in the long run. Terrestrial radio is already in a downward spiral as we were discussing in the thread about #1s, and digital radio allows listeners an alternative.
    I agree with Farawayhills that it won't have a big effect on what happens on mainstream radio, and that it could have a bigger effect on smaller markets that don't necessarily play the big mainstream hits. It will be interesting to watch how this all plays out.

    Honestly, some people don't like the idea of this deal simply because of the name attached. If this deal was established by Sony, I doubt some people would be as hesitant to accept it.
    Personally I think that it is a great move on his part, his job is to make money and he sure looks like he was ahead of the curve on this.

    Scott Borchetta is in the busines of make money just like EVERY label head is and if they are not then they suck at their job seeing that is what running a business is all about.

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    Carrie Guru pklongbeach's Avatar
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    Yay! Money!!!!
    What wonderful and noble purpose!

  • #19
    Ultimate Carrie Fan clh_hilary's Avatar
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    Clear Channel's John Hogan Discusses Big Machine Royalty Deal at Billboard Country Summit | Billboard.biz

    Clear Channel's John Hogan Discusses Big Machine Royalty Deal at Billboard Country Summit
    June 05, 2012 | By Glenn Peoples, Nashville
    Clear Channel Media & Entertainment chairman/CEO John Hogan speaks with Billboard's Wade Jessen about the company's landmark royalty deal with Big Machine at the Billboard Country Summit. (Photo: Michael Seto)
    On the day his company announced a landmark performance royalty deal, Clear Channel Media & Entertainment chairman/CEO John Hogan appeared at Billboard's Country Music Summit in Nashville and explained how the deal benefits the city's music industry and the nation's largest radio company.
    Clear Channel believes the deal is good for a healthy country music business, while giving the company the proper incentive to build its budding digital business, Hogan told Billboard senior chart manager Wade Jessen.
    "We think its really important that with this new agreement that our business interests are aligned," Hogan said. "When our interests are aligned, and when we have a very predictable, transparent business model, we are much more motivated to grow the digital business."
    In the groundbreaking deal, Clear Channel Media & Entertainment will pay Big Machine Label Group a percent-of-revenue royalty for the performance of its recordings on both terrestrial radio and its Internet radio platform, iHeartRadio. Owners of sound recordings are currently paid for performances on Internet radio services but yet to negotiate a deal with terrestrial radio broadcasters to receive performance royalties.
    More predictable digital expenses should help iHeartRadio, but there is little doubt the deal was a strategic, preemptive move by Clear Channel to strike a favorable deal before Congress gets involved. Hogan admitted one of the best things about the deal is that it's a market-based solution that brings together two sides that have long been at odds with one another.

    "Well listen, I'm as big a fan as the next guy of elected officials, but I think it's always a little scary when you look for legislative or regulatory solutions to what should be marketplace solutions," he said.

    The deal got a nod of approval from country star Dwight Yoakam earlier in the day at the Country Music Summit. During a keynote interview with Billboard Country Update editor Tom Roland, Yoakam said the royalty count offset some of the cost of creating and promoting music and should be considered part of the business model for a business that uses that music to attract advertisers.
    "I think that may be good news and maybe a sign of music having a way to maintain itself financially," Yoakam said.
    Country labels would be more than happy if Clear Channel could just shorten the time required to move a song up the country chart. The time and cost of radio promotion was again a common complaint at the Country Music Summit. Hogan pointed to a handful of examples of Clear Channel efforts to help develop artists: the artist integration program, the digital artist integration program, a program of world premieres and summits that bring together programmer sand record labels. The integration of terrestrial and digital radio platforms could help, too, Hogan said.

    As if paying performance royalties to country recording artists didn't make him enough friends in Nashville, Hogan was absolutely effusive when speaking about country music and its fans. He called country a "tremendous format" and said it has the "most accessible, engaging artists." Clear Channel has 120 country stations as a handful of country-specific stations on its iHeartRadio Internet radio service.

    "Radio generally, but country radio in particular, is special because it's a relationship with the listener," Hogan said. "Country radio listeners think of it as their station, and think of it as their artists, and they think of it as part of their family, and as a friend and as a companion. It's the essence of great radio. We have changed the name of the company to Clear Channel Media & Entertainment, but we're powerful believers in the future of radio. Our company is based on the fact that radio is really strong, really powerful."

    Hogan began the interview by explaining how the radio grew to 850 owned stations and 238 million listeners. He worked for Jacor Communications when the Telecommunications Act of 1996 relieved ownership rules that had limited the number of radio stations under a single ownership. Jacor quickly grew from 20 to 120 stations and was acquired by Clear Channel in 1999. Clear Channel would make even more acquisitions.

    "We all thought it can't get any bigger and go any faster than that," Hogan said. "We were all set to exhale and pretty quickly figured out you had to either keep growing of get left behind."

    The industry was flying blind after the Telecommunications Act set off the land rush, he said.

    "In the early part of consolidation, there wasn't blueprint. Nobody had done it before. There weren't a lot of examples to follow," he explained. "So we did the best we knew how to do to in trying to bring together these 1,200 different radio stations. There were a lot of stops and starts along the way as we tried to figure out just exactly how to succeed in what was a very different environment. Nobody had owned more than 24 radio stations prior to that and we had an awful lot on our plate."

    Hogan is thankful Clear Channel came out the other end of consolidation with "some of the most powerful, iconic brands" in the country, but he admits it wasn't easy. "There's a lot of those years I'd like to forget," he said.

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    The bottom line is that when you are losing money in certain areas of your business you need to look into other areas to try and recoup it.
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