Revolutionary Music Deal Changes Future of U.S. Music Business; Warner Music Group and Clear Channel Strike a Deal

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(From Billboard Magazine, September 12, 2013) The horizons of the music business have broadened just a little bit more after the confirmation of a new enterprise between Warner Music Group and Clear Channel on Thursday, September 12th, 2013. This new deal will allow WMG to promote the label’s artists through Clear Channel, the biggest mass media corporation in the U.S. and an entity that possesses well over 800 radio stations in the nation. As the world’s third largest record label, WMG and Clear Channel have created media history by being the first major label in the U.S. to sign such a deal.

The deal will benefit Warner Music Group in several other ways; in the announcement Thursday, Clear Channel committed to creating new digital interfaces that will make purchasing music an easy, simple process for viewers. Steve Cooper, Warner Music Group’s CEO, stated that the new partnership will include “a host of powerful new promotional opportunities to reach a wider audience.” Clear Channel hosts several events annually that will only do well in terms of promotion to WMG’s artists; these events include the Jingle Ball and the iHeartRadio Music Festival. “From high visibility live and televised events to unique digital services, the breadth and strength of Clear channel’s platforms will enable us to propel our artists’ careers in an extremely competitive marketplace,” states WMG’s Rob Wiesenthal.

Additionally, WMG will be paid artist-performance royalties for terrestrial radio; Clear Channel has made many deals with independent labels (Big Machine Label Group, Fearless Records, and Zojak Records to name just a few) that involve artist-performance royalties being paid to the performer’s label when songs are played on terrestrial radio.

Reactions toward the new deal have been optimistic, and many wonder if this deal will spark a chain reaction and cause broadcasters to strike deals with both independent and major labels as well. CEO David Field believes that “The Clear Channel/Warner Music agreement is another important step forward in establishing a new business model that aligns the interests of artists, labels, consumers, and broadcast radio.”