Clear Channel creates an inflection point for the radio industry

I got an special email from the Radio And Internet Newsletter (RAIN) yesterday morning titled:

“Game-changing” CC deal trades AM/FM performance royalties for digital break.

Clear Channel RadioThis is a very interesting development, rate parity for Clear Channel across broadcast mediums. We have commented for years that the Copyright Royalty Board/SoundExchange rates tilt the playing field toward traditional terrestrial broadcasters and away from the nascent digital broadcasters that use the Internet.

IHeartRadio logoFavoring one type of broadcast medium over the other makes no sense, and John Hogan Chairman of Clear Channel Media and Entertainment agrees:  “This new agreement expands label and artist participation from just digital to terrestrial broadcast radio revenues in one comprehensive framework that will give all of us a great incentive to drive the growth of the digital radio industry and allow everyone to participate financially in its growth. This market-based solution helps bring the best in music to radio listeners wherever they want to hear it”

To date there has been no commercial business that can afford the SoundExchange per play royalty rates.  Overall this agreement signals a change in the broadcast industry. Going forward terrestrial and digital might be viewed as one, where the playing field is leveled between broadcast mediums and all can participate in the resulting revenue streams.

All I can say is, it is about time.

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