Clear Channel to pay percentage of music ad revenue to Big Machine Label Group

Tuesday, June 5, 2012 - 11:35am

Clear ChannelClear Channel, the largest owner of radio stations in the U.S., has agreed to pay Big Machine Label Group performance royalties for the use of sound recordings on AM/FM in exchange for more advantageous digital royalty rates. Essentially, Clear Channel will pay the label an undisclosed percentage of music advertising revenue for all broadcasts -- digital and terrestrial. That enables Clear Channel to avoid SoundExchange and the per-song, per-listener royalty rate.

Clear Channel CEO Bob Pittman says that's the advantage of the deal. "I can't build a business space based on paying money for every time I play a song," he said, "but I can build a business by saying I will give a percentage of revenue that I bring in... What we are really trying to do is come up with a predictable model." Clear Channels hopes to make more direct deals with labels this year, but Pittman says they'll need to wait and see if the deal with Big Machine works out economically first. "Starting small is the way to do it because it will have less of an impact."

Said John Hogan, Chairman and CEO of Clear Channel Media and Entertainment: "Today, 98% of our listening is terrestrial broadcast and 2% digital -- with record labels and artists only paid for the 2%. 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."

Radio-Info calls the deal "a potential game-changing revenue deal to fuel digital radio's growth." Billboard dubs the partnership "unprecedented."

Big Machine Label Group includes artists like Taylor Swift, Tim McGraw, Rascal Flatts, Edens Edge, Ella Mae Bowen, Reba McEntire and others. "Now, we can align our interest with radio in a predictable model based on ad revenue so that we can drive digital growth," commented the label's president and CEO Scott Borchetta. "When stations tell me that they can't afford to broadcast digitally, what good does that do me?"

iHeartRadioClear Channel has also launched a new channel on iHeartRadio: Big Machine Radio. It will feature music from the label's artists, plus interviews, rare recordings and a weekly "From the Vaults" feature (including archived radio specials from artists' early days). Find more info about the new channel from Clear Channel here.

What kind of impact will this deal have on the industry at large? "If Clear Channel turns to other indie labels and offers the same deal, it could be setting a market rate precedent for the day, should it ever come, when such a sound-performance rate is legislatively enacted," comments Billboard. "Also, if Clear Channel sticks to dealing with indies, the company could set a rate precedent without dealing with the major labels, which tend to ask for big advances and aggressive rates."

"Because of its sheer size, everything Clear Channel does affects other groups," writes Radio-Info's Tom Taylor. "There could be howls."

You can find the companies' press release here and further coverage from Billboard here and Radio-Info here.

TuneIn launches online-only HOT 97 Summer Jam web radio station

Wednesday, May 23, 2012 - 9:00am

TuneInTuneIn has partnered with New York's WQHT "HOT 97 FM" to create a new streaming radio station centered on the HOT 97 Summer Jam hip-hop festival. The stream reportedly includes music from artists who will perform at the upcoming fest, as well as archived performances from previous Summer Jam artists. "These archived performances are not a part of the regular on-air rotation, giving fans access to this type of content, previously unavailable to them," says TuneIn.

Users can find the new station by searching for "Summer Jam" on TuneIn's website, mobile apps or other offerings. HOT 97 Summer Jam takes place on June 3.

TuneIn aggregates more than 60,000 web radio stations and 2 million on-demand programs. It is available on 150 devices and boasts more than 30 million listeners.

RAIN Guest essay pt. 2: Can KTeshLA (and other "local" Internet radio) succeed?

Thursday, May 10, 2012 - 12:00pm

Mark Edwards is an award-winning radio programmer with experience at WLIT/Chicago, KOSI/Denver, KYKY, KEZK, and WVRV in St. Louis, and more. He's currently managing general partner of Mark Edwards Worldwide, his multi-disciplinary consulting practice. This is Part 2 of his guest essay; read Part 1 here.

In yesterday’s RAIN, we looked at John Tesh’s hyper-local KTeshLA website and streaming service. Today, let’s tackle the question of how stations like KTeshLA and other locally targeted online only sites can be successful going forward.

John Tesh already has a radio show on more than 300 stations (he launched KTeshLA after losing his Los Angeles affiliate). His show was one of the higher-rated dayparts on KFSH in Los Angeles, so there was already a dedicated local audience for his content, and he was already producing material for his national show. Given Tesh’s recording, touring, writing, and other activities, generating cash from the online venture may not have been as much of a concern as it might be for a standalone business. Staying in touch with a community -- especially without the benefit of a bone-crushing terrestrial signal -- can be costly.

One of the most significant differences between Tesh’s site and the sites of other people trying to “make it” as web radio stars is that Tesh’s site looks great. It's as good as any AM or FM radio station site on the Internet. If anything, the site takes too much from radio stations in an effort to look like a radio station as opposed to what it is: something between a radio station and a streaming service. While the site carries banner ads, it isn’t plastered with them hodgepodge like some other “web radio” sites.

Taking the time and spending the money to design a world-class website should be the first part of the plan for any webcaster. Clearly, the TeshMedia team considered the visual appeal of their product along with the sound, something rare in the world of webcasting. (Some of the ugliest websites I’ve seen over the last 15 years have been for air personalities putting a show or podcast on the web. They’re littered with banner ads, bad photos, and unusable navigation links.)

A significant expense for the local webcaster is for the stream itself. Beyond royalties and bandwidth costs, some kind of automation system needs to push out the content if it is a full-time format, even if it’s a podcast or constantly repeating three or four hour show. There are ways to do the automation inexpensively, but streaming should not be a bargain basement decision. Great quality, constant uptime, and full-time support are needed for a successful stream, and that costs money. The good news is there are new technologies on the horizon that will significantly lower the cost of streaming, and add personalization and ad-targeting to the stream, helping to generate more revenue.

The world is racing to a mobile, personalized, on-demand model for entertainment, and the opportunity for locally-targeted Internet-based stations is here. If the stations are done right, they’ll generate traffic and response for local advertisers. It can be done, and now is the time to get started on hyper-targeted projects like KTeshLA.

We'll wrap this up with some comments from the people behind KTeshLA and see how their station is performing.

RAIN Guest essay: John Tesh (of all people) erasing the line between streaming service and radio station

Wednesday, May 9, 2012 - 12:10pm

Mark Edwards is an award-winning radio programmer with experience at WLIT/Chicago, KOSI/Denver, KYKY, KEZK, and WVRV in St. Louis, and more. He's currently managing general partner of Mark Edwards Worldwide, his multi-disciplinary consulting practice.

There’s very little doubt that mobile and personalized content are the future of what is now radio, and in some cases that big tower in the corn field won’t even be part of a “radio station” in the not too distant future.

Multimedia content creator John Tesh may be among the first to see and act upon that future. He's put a radio station online that, in fact, isn’t a radio station or a streaming service; it’s both and neither at the same time. Last week, the entertainer launched K-TeshLA (see RAIN coverage here) a site that looks like a "best in class" local radio station site complete with a 24-hour streaming audio service as part of the package. The only difference between this site and most other Contemporary Christian radio stations is that there’s no traditional radio station connected to the site, just the stream.

(The site was launched the site after Tesh's syndicated radio show was dropped by Salem’s KFSH in Los Angeles. Heard daily on over 300 stations in the U.S. and Canada, Tesh wanted to make sure he was still reaching the important Los Angeles market, and so built what's ostensibly a complete online radio station.) 

The K-TeshLA site is completely localized for the Los Angeles market, right down to showing the local time and weather, working with local charities and churches, and doing actual contests, giving away $100 a day and a grand prize of an iPad. The station is building its own database of listeners, and has wasted no expense in designing an engaging website and high quality streaming player. Both the site and player have deep integration with Facebook, something not found at many FM or AM radio stations.

While the station doesn’t have a mobile site or streaming app yet, K-TeshLA is available on the TuneIn Radio application, and it looks and feels just like any broadcast property on the roster of TuneIn’s stations. Having that parity with traditional broadcast outlets is certainly one of the first steps to leveling out the playing field between stations that have a transmitter and those who are going directly for online and mobile listeners.

Listening to K-TeshLA, one wouldn’t know that it wasn’t a regular FM station. The stream features lots of music, IDs, and Tesh’s “Intelligence For Your Life” content repurposed from his terrestrial radio show, not to mention both national and local advertising.

The big question is, will a localized Internet-only radio station succeed in the world of AM and FM broadcasters and their continuing consolidation into apps like iHeartRadio? We’ll look at that in the next part of this essay.

Chicago's web-only Q101 lands on the AM dial

Monday, May 7, 2012 - 11:35am

Q101In what Radio-Info rightfully dubs "a unique twist," the web-only version of Chicago's alternative rock station Q101 is now simulcast on 1530 AM. The AM station, WJJG-AM, flipped from talk radio (featuring Michael Savage, Steve Dahl and others) over the weekend, reports Radio-Info. It now broadcasts the same content playing on

Chicago's Q101 was an FM station found at 101.1 FM. It was flipped to all-news by Merlin Media in July 2011 (RAIN coverage here). Broadcast Barter Radio Networks purchased Q101's intellectual property and website soon after the flip (RAIN coverage here).

You can find Radio-Info's coverage here.

Jacobs, Localytics urge radio to consider local listeners when developing mobile strategy

Wednesday, May 2, 2012 - 11:40am

A Cambridge, MA company that analyzes mobile app usage offers some interesting findings about how listeners use  radio mobile apps.

Perhaps most interesting is Localytics finding that over half (54%) of a station's listening via its mobile app comes from within the station's broadcast range [note: for this figure, Localytics used only listening over wi-fi -- not mobile data networks -- since it is more accurate for determining a user's metro area location].

Apps (and Internet streaming in general) have long been considered most useful for listening to out-of-market broadcasts. So much so, in fact, that for a long time many local broadcasters didn't find value in streaming efforts, as they seemed to only benefit out-of-market (and thus, not of interest to local advertisers) listeners.

But broadcasters should be aware of this Localytics' data point on radio app usage. Certainly, local listeners might turn to a mobile app when in spotty coverage areas within broadcast range, or in those situations where an AM/FM radio isn't convenient. But perhaps more importantly, radio should recognize the mobile platform as a means to enhance their brand with interactivity and additional content.

"Radio stations with associated smartphone apps can give their listeners a more varied and flexible experience both within and outside of their normal broadcasting region," says Localytics.

Jacobs Media and jacAPPS president Fred Jacobs agrees. His company recently presented the findings of their TechSurvey8 study on radio listeners (see RAIN's coverage here). Jacobs told Localytics, "When we asked our respondents which type of radio app they prefer, more than half opted for individually branded apps which allow for more features and customization. This is where radio is going.”

Read more at here.

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