June 06, 2012 07:45:01 GMT
Under the new agreement, Big Machine Label Group's artists will get money for their songs played on Clear Channel's terrestrial radio stations.
Big Machine Label Group has signed an innovative deal with Clear Channel that will give the record company and its artist a share of revenue. The agreement means the label's stars, such as Taylor Swift, Tim McGraw, Rascal Flatts and Reba McEntire, will get payment for their songs played on Clear Channel's traditional radio stations.
Prior to this deal, artists only get performance royalties for their songs played on internet and satellite radio. The radio giant also benefits from this deal since they will no longer pay the artists every time their songs are played. Instead, the media company will pay the musicians a share of the advertising revenue across all platforms.
"Today, 98 percent of our listening is terrestrial broadcast and 2 percent digital - with record labels and artists only paid for the 2 percent," said John Hogan, chairman and CEO of Clear Channel Media and Entertainment, when announcing the deal on Tuesday, June 5.
"This new agreement expands label and artist participation from just digital to terrestrial broadcast radio revenue 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."
Meanwhile, Scott Borchetta, President and CEO of Big Machine, stated, "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."
Clear Channel is expected to seal similar deals with other record companies, while Big Machine will propose the same agreement to other radio broadcasters.