Clear Channel

Clear Channel has now struck a second deal with a record label that trades an on-air royalty for a discount when the label's music is streamed. Clear Channel will pay Glassnote Entertainment a percentage-of-revenue royalty when the broadcaster plays Glassnote recordings on the air or online. 

U.S. broadcasters are not obligated to pay copyright owners to perform sound recordings on AM and FM, but are required to pay when those same recordings are streamed online.

The press release clearly stressed the "market-based" nature of the deal, crafted to "help drive faster growth of digital radio" and create "a sustainable business model for the digital music industry."

Earlier this year, Clear Channel forged a similar arrangement with Big Machine Records. Broadcast group Entercom last week also agreed with Big Machine on such a deal.

With such deals, Clear Channel is likely positioning itself for a future in which (1) more and more of its audience migrates from its broadcast signals to online listening; and (2) broadcast radio's on-air sound recording royalty exemption eventually ends. By taking on the on-air royalty obligation now (under its own terms, and not those of the U.S. Copyright Office), it secures for itself an online royalty structure more tenable than the current CRB-determined statutory deal.

That statutory royalty is exactly the subject of the (recently-renewed) "fairness" debate in digital radio, including the recently-introduced Internet Radio Fairness Act of 2012. To stream copyright sound recordings online, operators pay royalties that amount to a far higher percentage of their revenues than the use of the same music delivered via satellite radio or cable television. Critics say the royalties are so high as to stifle the growth and development of Internet radio, and eventually deny copyright owners and performers royalties they'd earn from a flourishing industry. The Internet Radio Fairness Act is intended to bring Internet radio royalties more in line with those of other forms of digital radio, and has gained the endorsement of the National Association of Broadcasters.  

Clear Channel CEO Bob Pittman was clear that he thinks both his company and the music industry benefit from more affordable streaming rates. "It’s no surprise to us that Glassnote quickly saw this was a great opportunity to help move the digital radio industry towards a more sustainable future. Not only will this agreement expand his label and artists’ participation in all of Clear Channel’s radio revenues; it also creates a vibrant new digital radio business model that we believe will provide more money for the artists and the labels and more digital choices for the consumer."

Glassnote artists include Mumford & Sons (pictured), Phoenix, Two Door Cinema Club, GIVERS, Childish Gambino, and more.

The iHeartRadio Music festival opens tonight at the MGM Grand in Las Vegas, and will feature performances from Taylor Swift, Aerosmith, Rihanna, Usher, Bon Jovi, Brad Paisley, Lil Wayne, Green Day, Swedish House Mafia, No Doubt, Pitbull, deadmau5, Miranda Lambert, Calvin Harris, Enrique Iglesias, Linkin Park, Jason Aldean, P!nk and Mary J. Blige.  This week superstar performer Shakira bowed out of the 2-day event, announcing she's pregnant.

Also this week Yahoo! announced it will stream the concert live in HD. The show will also be broadcast on Clear Channel radio stations and streamed to the Xbox.

It's the second-annual iHeartRadio concert. The first coincided with the launch of the Clear Channel-owned Internet and mobile radio initiative, iHeartRadio.

Now a second broadcaster, Entercom Communications, has made an agreement with record label Big Machine to pay a percentage of ad revenue royalty on over-the-air plays of Big Machine recordings in exchange for lower streaming royalties.

In June Clear Channel and Big Machine announced a similar deal (coverage here), perhaps signalling Clear Channel's understanding that (a) online streaming will soon be a far larger part of its business than it is today; and (b) it's likely that broadcast radio's exemption from sound recording royalties days are numbered.

"As great and leading visionaries in the broadcast world continue to look into the future they are seeing where listeners are going in regards to how radio is being used now and where and how it will be used in the very near future," Big Machine president Scott Borchetta said. His company, an independent label with acts like country stars Taylor Swift, Tim McGraw, Rascal Flatts, and Reba McEntire, announced at the RAB NAB Radio Show in Dallas today its agreement with Entercom, owner of more than 100 stations in 23 U.S. markets.

Terrestrial broadcasters pay royalties amounting to a small percentage of their revenues to the composers and publishers of music. Congress has not mandated broadcasters pay for the use of copyright sound recordings, a fact that's long angered the record industry.

Internet radio, while paying similar compostion/publishing royalties as broadcasters, is required to pay sound recording copyright owners royalties that -- if not for emergency deals that temporarily reduced the rate the government set -- would have amounted to multiples of even the most successful webcaster's annual revenue.

Pandora founder Tim Westergren pointed to the Clear Channel/Big Machine agreement at the time as "evidence that even for a company of Clear Channel’s size and business competence, they are realizing that Internet radio is a tough business... I feel like it’s just one more signal that something is broken in the royalty rate setting for Internet radio." Westergren had addressed (here) the "Future of Audio" House Subcommittee on Communications and Technology hearing right after the Clear Channel deal was announced.

Apparently, CBS Radio has no plans to make any such agreements with labels. At the Radio Show, CBS CEO Leslie Moonves, said, "The idea that we have to pay them to put their music on our radio stations is absurd."

Read more in The New York Times here.

Clear Channel President of National Sales, Marketing and Partnerships Tim Castelli delivered the keynote address of RAIN Summit Dallas on Tuesday. His presentation focused on how digital and mobile can benefit and "bring the sexy back" to radio (channeling a little Justin Timberlake).

In particular, he emphasized that "digital is additive to our listening and brands," and that mobile is "the best opportunity for radio" right now.

You can listen to Tim's full presentation below. Thanks to SoundCloud for hosting the audio!

Pundit Glenn Beck has partnered with Clear Channel to launch "The Blaze Radio Network," an online talk radio stream that will be the home of talk personality Jay Severin.

The channel will stream from Beck's The Blaze website, and via an iPhone/iPad app and the iHeartRadio app. In addition to Severin's show, the new channel will include a simulcast of "The Glenn Beck Radio Program," another show called "Pat & Stu" hosted by Stu Burguiere and Pat Gray, and audio simulcasts of shows by TheBlaze TV, Glenn Beck's media enterprise.

According to the company, "TheBlaze now combines one of the world’s largest subscription streaming video networks, a website that generates over 9 million unique visitors per month, a radio network, a curated marketplace platform to help local small businesses reach consumers across the country and a monthly magazine."

"The Blaze Radio Network" is scheduled to launch later this month.

The press release is here.

As in years past, the "summer doldrums" took their toll on webcasters' audiences in July. Minus one exception, all the webcasters and broadcasters tracked in Triton Digital's Top 20 Webcast Metrics for July 2012 were flat or down month-to-month. 

The Internet radio industry typically sees audience numbers flat-line or drop slightly in the summer months. Listeners spend relatively less time in the office -- where, at least in the past, a majority of Internet radio usage took place -- due to holidays (like the Fourth of July), vacations, and other activities (like the Summer Olympics which began on July 27 and, this reporter seems to think, were a huge drain on productivity). We refer to this traditional decline as "summer doldrums." 

All told, the combined AAS (Average Active Sessions, essentially equivalent to AQH) of the Top 20 webcasters declined a little over 1% month-to-month. That's actually an improvement over 2011, when webcasters' combined AAS dropped nearly 7% from June to July 2011. Could this be in part due to Internet radio's growing mobile and out-of-office listening? 

Top-ranked Pandora was roughly flat month-to-month in July, according to Triton's Domestic Mon-Sun 6a-12m daypart ranker. The webcaster stands at an AAS of 1,214,119 -- up 151% year-over-year.

The #2-ranked Clear Channel, backed by its iHeartRadio platform, declined 4% month-to-month to reach an AAS of 174,333. Clear Channel's AAS has grown 140% year-over-year.

The race for the #3 spot became more heated in July: CBS Radio, currently holding the #3 spot, declined 12% month-to-month. Slacker (at #4) dropped 6% month-to-month but is now within nearly 300 AAS of overtaking CBS Radio. Slacker has grown 60% year-over-year while CBS Radio has dropped 45%. The change is in part due to AOL Radio's migration from CBS to Slacker.

The one exception to all this declining and flat-lining is NPR Member Services, ranked at #11. Its AAS, as measured by Triton, increased 37% month-to-month. June was the first month NPR Member Services appeared in the Top 20 ranker.

ESPN Radio saw the largest month-to-month decline with a 14% drop (though Radio One and Hubbard weren't far behind with 13% declines). Most others saw month-to-month drops of 3-9%.

(The chart above shows the growth of Pandora, CBS, Clear Channel, the top 5 terrestrial radio groups and Slacker from September 2009 through July 2012. Note that Pandora's AAS numbers from December 2010 through mid-August 2011 were affected by the omission of tracking code in some of its mobile apps. Click to view in full size.)

You can find the Domestic Mon-Sun 6a-12m ranking below. Find out more from Triton Digital’s Webcast Metrics report here (PDF) and find our coverage of June 2012’s ratings here.