Digital Music News

Digital Music News reports CC rumored to be paying small label partners "1% of revenue" as on-air royalty

Monday, May 6, 2013 - 1:00pm

Digital Music News today revisits the topic of radio broadcast groups forging licensing deals with small record companies that effectively discount streaming fees for a small revenue share for on-air play.

Clear Channel is the largest radio operator engaged in these deals, with label groups like Big Machine, Glassnote, and more. Other broadcasters with similar deals include Entercom and Beasley.

While the terms of these deals aren't public, Digital Music News writes, "In return for getting royalties for airplay, rumoured to be around 1% of revenue, the labels agree to bypass SoundExchange and so cut their online royalty rates to what's rumoured to be around 3% of revenue." [Most AM/FM radio stations pay nothing to use sound recordings on-air. This year most broadcasters will pay $0.0022 per song, per listener for songs streamed online. See more in our royalties round-up under "Commercial Broadcasters" here.]

If it's true radio sees the end of free broadcast use of sound recordings coming, broadcasters might be trying to stay ahead of government regulators by voluntarily entering deals, rather than waiting for the Copyright Royalty Board to set a less favorable rate (see "Internet radio"), as the article suggests.

"The reason (Clear Channel would agree to these terms) must be to drive down the overall royalty rates it has to pay," Digital Music News reasons.

After the news source gets its customary digs against Pandora and Clear Channel in, it points out that while these deals do give recording copyright owners (labels) a bit of a royalty for on-air play (for which they're legally entitled to nothing under current U.S. law), they may not be ideal for performers. For one, there's no guarantee of a consistent rate from deal-to-deal.

And record companies have an extra incentive to forge these agreements: unlike SoundExchange payments, labels aren't legally required to share them with performers.

Industry legal expert David Oxenford has some excellent analysis of these deals in Broadcast Law Blog here.

Read more in Digital Music News here.

Aid for Pandora, or a new path for broadcasters? Two more industry experts analyze CC/Big Machine deal

Monday, June 18, 2012 - 11:15am

Clear ChannelWeeks later, Clear Channel's groundbreaking royalty deal with Big Machine is still sending tremors through the industry (RAIN coverage here). Two experts recently shared what they see as the takeaway from the new partnership.

Music industry attorney Steve Gordon writes in Digital Music News (here) that Clear Channel's deal is good news for Pandora and anyone else looking for more equitable streaming royalty rates. Clear Channel doesn't want to pay the "ridiculous" royalty bills that Pandora has now, argues Gordon, "Which means that instead of screaming bloody murder into the wind, Pandora now has the biggest ally imaginable."

Meanwhile, co-founder and Chief Operating Office of Triton Digital Mike Agovino writes in TechCrunch (here) that he sees Clear Channel "[leading] the way for traditional radio providers looking to go digital."

Agovino hopes more broadcasters will -- like Clear Channel -- start seeing digital as an opportunity, not a threat. "The key to making it online is working with the music industry to make that digital future a reality –- sooner rather than later."

Karmazin argues consumers crave programmed content, not endless choices

Tuesday, May 8, 2012 - 11:35am

Web music philosophies"At a time when more and more content is available and consumers continue to be time-constrained, there are still only 24 hours in a day. We believe curated content... is more important than ever and will be even more important in the future as even more content becomes available especially on the Internet."

So said SiriusXM CEO Mel Karmazin recently. The quote got Digital Music News thinking, as it looked at web music services and their approaches as to music library size vs. curation.

"Others are buying that philosophy [of the importance of curation]," writes DMN, pointing primarily to Pandora. The webcaster has a music library of "just" 900,000 tracks from 90,000 artists -- "a number that has remained flat over the past few years."

On the other side of the table, there's the likes of Spotify, with millions of tracks in their libraries but relatively little curation. But Spotify's "fantasies involve curating apps," writes DMN, "not just endless spreadsheets of music."

Indeed, as RAIN has reported (here and here), Spotify and its on-demand competitor Rdio are both developing some sort of Pandora-like Internet radio service. It's not hard to see why. DMN points out that SiriusXM has 22.3 million subscribers ("roughly seven times the global subscriber base of Spotify"), while Pandora just announced they attracted more than 51 million active listeners in April 2012.

"As much as the Spotify OS needs a massive and comprehensive catalog to make this work, the future may belong to those who effectively deliver less," concludes DMN (here).

Yahoo! Music reportedly "dismantled" by recent lay-offs

Monday, April 9, 2012 - 11:40am

You've likely heard that Yahoo! recently laid off 2,000 of its employees. Digital Music News reports that inside sources say Yahoo! Music took a pretty significant share of the blow.

Among the reported casualties: Head of Programming & Artist/Label Relations John Lenac (as well as at least some of his staff) and Director of Programming Gina Juliano.

(Yahoo! Music has) "been getting ripped apart," one source inside Yahoo! reportedly told the news source.

Though there's still significant traffic to Yahoo! Music (DMN cites comScore giving it 6 million monthly uniques among 18-34s), Digital Music News faults its generalist, media-portal approach for its failure.

Yahoo! Music alumi include Ian Rogers (now at TopSpin Media), Jay Frank (author and DigSin owner), and David Goldberg (Benchmark Capital, now at SurveyMonkey), and Jeff Bronikowski (AOL Music, then The Echo Nest). Yahoo! Music's online-only radio streams (formerly Goldberg's company's, LaunchCast) were taken over by CBS Radio in 2008 (see RAIN here). Broadcast.com founder Mark Cuban sold his aggregation of broadcast radio streams to Yahoo! in 1999 for a reported $5.7 billion. Cuban revealed to RAIN (here) that in the early days of webcasting, Yahoo! voluntarily entered into a royalty deal with the RIAA based on a high, flat rate -- as opposed to a percentage of revenue. This single deal was later used by the Copyright Arbitraton Royalty Board as the free-market basis upon which it determined statutory royalty rates that would almost certainly have quashed the young industry (had relief measures not later been passed).

Read more in Digital Music News here.

DMN: Traffic charts show Turntable.fm's popularity may have peaked

Thursday, February 9, 2012 - 12:45pm

Turntable.fmDigital Music News has published traffic charts for Turntable.fm from Alexa, Google and Compete which suggest the streaming music site's popularity may have been temporary.

Turntable.fm allows users to act as "DJs" for others, playing music of their choosing to anyone in virtual "rooms." It gained mainstream attention in summer 2011 (RAIN coverage here).

The charts in Digital Music News' article hint that the service's summer popularity may have waned by fall and has yet to recover. You can find Digital Music News' post here.

Internet radio payments power global growth in performance royalties

Tuesday, October 25, 2011 - 11:40am

Digital Music News last week reported that global performance royalties grew 9.1% (up $130 million) in 2010, to $1.6 billion, according to statistics from Music & Copyright. The biggest contributor of performance royalties was SoundExchange, which collects and administers royalties on sound recordings from Internet radio, cable, and satellite radio.SoundExchange

Last year SoundExchange distributed almost $250 million to copyright owners (record labels) and performers, up from just over $155 million the previous year. 2011 should be even better, as SoundExchange collected 94% more in royalties in the first half of 2011 compared to the first half of last year.

Read coverage from Digital Music News here.

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