Clear Channel Media and Entertainment has announced a deal with classical record label Naxos which, in all likelihood, involves the broadcaster paying royalties to the label for on-air play in exchange for a discount or waiver on online plays.
Clear Channel compared the agreement with its "groundbreaking agreements with Big Machine Label Group and Glassnote Records." While this new announcement contained no mention of royalties, both of those agreements involved the on-air/online royalty pact.
Sound recording copyright owners (in this case, the record label) is owed royalties when its music is streamed online, as by Internet radio. However, they can claim no such royalty when the same recordings are used on air by broadcasters.
Deals like this demonstrate that Clear Channel recognizes the growing importance of its both its online listening and the financial viability of streaming copyright music.
As mentioned, earlier this year Clear Channel forged similar arrangements with Big Machine Records (read more here) and Glassnote Entertainment (here). Broadcast group Entercom also agreed with Big Machine on such a deal (here).
Industry legal expert David Oxenford wrote that deals like this may have an effect favorable to webcasters in upcoming royalty rate determinations. He said:
"In setting (webcast royalty) rates, the (Copyright Royalty Board) looks to establish rates that reflect what a willing buyer and a willing seller pay in the marketplace. In past royalty proceedings, that willing-buyer, willing-seller price had to be estimated, as there were no real deals to use as a benchmark. And the estimates all went against webcasters. With a deal like that with Big Machine... the pro-record company outcome of the CRB proceedings may well be changed if these deals can be shown to be representative of the real value of the public performance of the sound recording." Read more here.
Several webcasters, broadcasters, and consumer electronics groups have joined the Internet Radio Fairness Coalition (see coverage here) with the intent to support new legislation (more here) that would remove the "willing buyer/willing seller" standard from rate determinations.
Also as part of Clear Channel's newly-announced deal, Naxos will program "Classica," the classical music channel on Clear Channel's online radio service iHeartRadio. The label boasts "one of the largest and fastest growing catalogues of unduplicated repertoire available anywhere—currently over 2,500 titles," including classical music CDs and DVDs as well other genres such as jazz, new age, educational and audiobooks.