Record Deal Puts Pressure On Major Labels

Clear Channel Media and music major Warner Music Group have reached a game-changing deal that will see Warner artists paid for terrestrial radio play for the first time.

In exchange, Clear Channel will get preferential rates for streaming songs through its iHeartRadio service and other online platforms, according to the NY Post.

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Record companies have been fighting to get paid for terrestrial airplay, which has traditionally been seen as promotional time. While radio stations haven’t paid to play songs, new digital platforms such as Pandora do pay royalties for each song they stream.

With the growth of these online music services, the record labels have begun to clamor for some form of payment from terrestrial radio owners. The amount Clear Channel will pay per song was not disclosed.

Under the deal, Warner artists such as CeeLo Green and Bruno Mars will also get a bigger share of promotional time — including more air play — across Clear Channel’s broadcast stations, digital radio outlets, outdoor events and TV shows.

Clear Channel has 850 radio stations and claims 60 million unique users per month across its digital sites.

The agreement giving Warner artists special treatment is likely to put pressure on the other big labels, Sony and Universal, to reach similar deals.

Bob Pittman, Chairman/CEO of Clear Channel visited CNBC Friday morning and said the deal is about reinventing the radio and music relationship in the digital age.

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