Clear Channel hits it out of the park with WMG deal


Clear ChannelThis is the one we’ve been waiting for. Clear Channel has been blazing a trail that funnels radio revenues to the recording industry in exchange for reasonable streaming rates, but mostly with smaller labels. There is nothing small about CCME’s latest partner: Warner Music Group.

The deal is basically the same as those that came before – a partnership in which both parties come together for their mutual benefit.

The WMG roster of labels includes Asylum, Atlantic, Big Beat, East West, Elektra, Fueled by Ramen, Nonesuch, Parlophone, Reprise, Rhino, Roadrunner, Rykodisc, Sire, Warner Bros., Warner Classics, Warner Music Nashville and Word. Additionally, WMG’s publishing unit Warner/Chappell Music  holds over 1M copyrights.

“WMG is showing the way for what a true 21st century music company can be – a music company built for the digital age.  They’re now poised to use this unique relationship to benefit both their new and legendary artists,” said Bob Pittman, Chairman and CEO of Clear Channel.  “We couldn’t be more thrilled to be their partner in building these exciting new markets and promoting their artists in innovative new ways.  This is a win for all parties – for artists, who will enjoy heightened and guaranteed exposure; for their fans, who will find them in more places than ever before; for consumers, who will have the enhanced ability to find and listen to music wherever and whenever they want; and for WMG, Clear Channel and all of us participating in the new digital marketplace.”

Pittman had more to say: “The team at WMG understands that old formulas don’t work as well as they must in the digital age, and that we have to think differently to build a robust future for the music industry.  Today, music companies and media and entertainment companies need to be more supportive of each other’s needs.  This agreement begins that new era, and will help both companies thrive in the digital world.”

WMB COO Rob Wiesenthal added, “From high visibility live and televised events to unique digital services, the breadth and strength of Clear Channel’s platforms will enable us to propel our artists’ careers in an extremely competitive marketplace.”

CCME and WMG highlighted the following benefits of the landmark agreement:

*Clear Channel’s 850 radio stations nationwide; 243 million monthly broadcast radio users; more than 20,000 nationwide events; 60 million monthly uniques across its digital properties; its iHeartRadio theaters; and the 143 million person monthly reach of its outdoor assets;

*Programs to dedicate commercial time specifically to launch new music by providing new song exposure through both an enhanced and a first-ever guaranteed and prioritized version of Clear Channel’s Artist Integration Program (AIP), which will deliver carefully timed and continuing promotion;

*Major nationally televised events, including the Jingle Ball annual holiday concerts, the iHeartRadio Music Festival, iHeartRadio Ultimate Pool Party events, iHeartRadio Album Release Parties, and more;

*Special programs using Clear Channel’s digital footprint, including its digital simulcast, digital-only stations and custom stations, as well as special audio and video content, programming and promotions; and

*New targeted user interfaces in digital that make it easier for consumers to buy music when they hear it – building on radio’s role as the #1 way people discover music, and driving the conversion of interest in new music directly to sales.

RBR-TVBR observation: This is a huge step forward. The first thing it will do is make it exponentially more difficult for any radio performance royalty bill from Rep. Mel Watt (D-NC) to gain any traction – if the two industries at the center of the dispute can show Congress that they can work the issue out on their own, we guarantee you that Congress will be more than happy to stay out of it.

The fact that this is the first deal between two giants is very encouraging. Perhaps this will be the loosened boulder with enough mass to start an avalanche of similar deals between other radio groups and other labels.

Clear Channel is to be commended for getting this ball rolling, and so is WMG for being the first major label to get in on the act. It is now incumbent on other big radio and recording companies to express the sincerest form of flattery by imitating CCME and WMG.