Now Entercom Inks Side Deal With Big Machine Label Group
The ink is still drying on the paper and the official announcement will not be made until at about 8 a.m. this morning here in Dallas. Nashville independent record label Big Machine Label Group and Entercom will be announcing a deal that will result in artists such as Tim McGraw, Taylor Swift, Rascal Flatts, Reba, and others getting paid directly from the Entercom over-the-air revenue pool. Clear Channel cut a similar deal with Big Machine back in June.
While the Clear Channel deal stated that, in exchange for payments over-the-air now, the artists would cap their royalties from Clear Channel streams including iHeart Radio. Those details on this Entercom deal were not known at press time. The general thought here is that as digital continues to grow, and radio's listeners migrate to streamed signals, Clear Channel and Entercom are hoping these deals prevent them from getting whacked with huge online fees that gobble up big chunks of revenue. It's a hedge.
Clear Channel CEO Bob Pittman told Radio Ink last night, "Market-based deals like these are good for
everyone – the music company, radio, artists and consumers -- and they create a sustainable model for the digital music business. David is a big thinker who understands the importance, and the potential, of digital to the future of the entire music and radio industries, and I’m not surprised that Entercom is the second radio company to do a deal like this."
On the flip side, artists get something they've never gotten before, revenue from radio for tracks played over-the-air. Traditionaly, radio has only paid songwriters and music publishers, not the label or artists, through BMI and ASCAP. That model may be slowly changing if others follow the lead of Clear Channel, Entercom, and Big Machine.
Entercom President and CEO David Field, and President and Big Machine Label Group CEO Scott Borchetta, are both in Dallas this week at the Radio Show. Field says, “This agreement represents a bold step forward to align our interests with those of Big Machine and their artists. While the deal comes with some significant costs and risks, we believe that by working with the labels and the artist community to establish a new business model, we will ultimately enhance the opportunities for all parties concerned. I also want to acknowledge Scott Borchetta, Bob Pittman, and John Hogan for their vision and leadership in blazing the trail that made this deal possible.”
Borchetta said, "As great and leading visionaries in the broadcast world continue to look into the future, they are seeing where listeners are going in regards to how radio is being used now and where and how it will be used in the very near future. Among the many choices in the audio entertainment landscape, radio is now portable again thanks to smartphones and soon-to-be-ubiquitous Internet streaming in the car. David Field and his cutting-edge team at Entercom Communications completely understand this vision. I'm honored that they have joined us as partners in growing digital radio as well as compensating the artists that provide great musical content for their terrestrial stations. They have chosen to lead and everyone in the artist and creative community applauds their bold leadership role."
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