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Clear Channel, Warner Strike Royalty/Revenue Deal

Warner Music Group is one of the top three labels

In what both companies are calling a landmark agreement, Clear Channel Media & Entertainment and Warner Music Group say they’ve formed a partnership that aligns their interests in driving digital growth, increasing radio listening, breaking new music and creating new marketing opportunities for established artists.

The agreement goes way beyond the previous 13 royalty/revenue deals the broadcaster has struck with independent record labels. Clear Channel confirms to Radio World that music royalties are part of the agreement, but did not reveal specifics.

The pact is important for many reasons, but especially because Warner is one of the top three labels.

WMG will share in revenue from all platforms and gain opportunities to promote the music of its emerging and established artists across all of Clear Channel’s 850 radio stations, digital properties, iHeartRadio venues and its outdoor assets. The deal also includes Clear Channel’s 20,000 events, including those at its iHeartRadio theaters.

Clear Channel Chairman/CEO Bob Pittman says, “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.”

New targeted user interfaces in digital make it easier for consumers to buy music when they hear it, ­building on radio’s role as the number one way people discover music, and driving the conversion of interest in new music directly to sales, according to Clear Channel.

The companies also promise there will be programs with dedicated commercial time specifically used to launch new music. Such programs would provide new song exposure through an enhanced, guaranteed and prioritized version of Clear Channel’s Artist Integration Program, “which will deliver carefully timed and continuing promotion,” according to the broadcaster.

Clear Channel’s digital-only and custom stations, special audio and video content and televised events, like its iHeartRadio events, figure prominently into the plans.

Pittman calls the agreement 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.”

Warner Music Group CEO Steve Cooper is confident the deal will generate more overall revenue for artists and their labels, while providing more and different promotional opportunities to reach a wider audience.

Warner/CC Deal Is Welcome News (commentary)