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Radio’s Royalty Infrastructure Future Is Being Built

All should pay attention and participate in the bricklaying.

U.S. commercial radio and musical performers need each other. That fact remains true despite the revolutions in consumer habits and electronics that have produced a multi-channel, multi-platform, mobileiTunesPandoraSiriusYouTube world (and despite radio’s sometime-efforts to rely less on musical content).
This mutual need is behind the decision by Clear Channel to sign a royalty deal directly with a music label. The agreement rightfully is being seen as possibly opening a door to a fresh approach in the long standoff between broadcasters and musical performers over royalties.

(Witness the New York Times headline this week, “Radio Royalty Deal Offers Hope for Industrywide Pact,” a story in which the reporter writes, “The Clear Channel deal came up several times at the congressional hearing on Wednesday, and was often characterized as a positive sign that the marketplace could solve a problem that high-powered lobbying had been unable to settle again and again.”)

I have said before, and reiterate now, that radio leaders must recognize that they cannot realistically expect to hold onto their historical exemption from such royalties much longer and, further, that radio’s long-term growth will involve digital platforms where the exemption is irrelevant. Meanwhile, organizations that purport to act in the best interests of performers need to stop vilifying the medium that has been performers’ best friend since before their other friends were even conceived of.

Because Clear Channel has more at stake right now on the digital side of things than most broadcasters, it seems to have reached the conclusion ahead of others: It will help itself most by building a better and mutually acceptable relationship with labels. But the question goes beyond Clear Channel. The foundation of radio’s future royalty infrastructure is being laid right now. All should pay attention and participate in the bricklaying.

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