In an unprecedented deal, Clear Channel, the largest owner of U.S. radio stations, has agreed to pay sound-recording performance royalties to Scott Borchetta’s Big Machine Label Group and its artists.
The sound recording performance royalty — which is also known as the artist performance royalty and is not to be confused with the songwriter performance royalty — is something that record labels and artists have been fighting to obtain from U.S. radio for decades. Currently, in the U.S., they have only been successful in winning such a royalty in the digital radio space.
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As part of its deal with Big Machine, Clear Channel will pay an undisclosed percentage of music advertising revenue for broadcasts whether they are heard digitally or terrestrially, instead of the legislatively mandated sound-recording royalty for only digital, which currently is in the form of a pay-per-play royalty set at $0.002 for 2012.
While none of the terms of the deal struck between Big Machine and Clear Channel were disclosed, since the deal is a negotiated rate, payments will bypass SoundExchange and be made directly to the label, which in turn will split those payments 50/50 and pay the artists.