“We Are Never Getting Back Together” is already in the hands of radio program directors, well in advance of the release of the Taylor Swift album “Red” from which the single was culled. In this case, there is a performance royalty angle.
That’s because Swift’s label is Big Machine Records, which famously has a one-group, one-label royalty agreement with radio giant Clear Channel. A big factor in the agreement between the two companies is the fact that it makes it easier for Clear Channel to use Swift on its digital platforms; meanwhile, Big Machine benefits from income from airplay.
The Big Machine release announcing the 10/22/12release of “Red” noted radio’s historic role in boosting Swift to stardom. It wrote, “Taylor, who writes all of her own songs, has career record sales in excess of 22 million albums and 50 million song downloads. Each of her three studio albums has sold in excess of 5 million copies worldwide, and her most recent album, Speak Now, is one of only 17 albums in the entire history of music to sell more than 1 million copies in a single week. She has had singles top both the country and pop radio charts around the globe, is one of the top 5-selling digital music artists worldwide, and is the top-selling digital artist in country music history.”
RBR-TVBR notes that airplay on radio leads to both album sales and digital downloads.
RBR-TVBR observation: It remains to be seen if the Clear Channel/Big Machine model will catch on. We aren’t aware of any other such arrangements; further, it is highly unlikely that any such arrangements will be made other than at the very top of the music business food chain.
At the time it was announced, the deal took much of whatever steam may have existed on Capitol Hill in regards to legislating a performance royalty. A significant percentage of legislators were more than happy to step back from the thorny issue to see if the businesses themselves could work things out without resorting to congressional intervention.
If we had to make a guess, we don’t believe that a system in which each radio group negotiates a separate deal with each record label (which is similar to how television retransmission consent works, BTW) is very likely. As we mentioned, we can’t help noticing the lack of deals subsequent to CC/BM. So bottom line: the performance royalty debate may be momentarily dormant, but it is only a matter of time before it rises again.