Big Machine Cuts Deal With Beasley Broadcasting to Share 'Certain' Revenue

Big Machine has cut a deal with the Beasley Broadcast Group, which will bring terrestrial performance royalties to its artists in exchange for more predictable rates for its digital broadcasting.

Terms of the agreement were not announced, but this represents the third radio network that Big Machine has cut such a deal with. Last June, Big Machine announced a deal with Clear Channel, and then in September it did a deal with Entercom. The latter two radio networks have also done deals with Glassnote Records.

According to sources, these deals call for the radio stations to pay the label's artist their pro-rated share of 1% of advertising revenue for terrestrial broadcast, and 2% of advertising revenue for webcasting. The latter terms allow radio stations to predict payments as opposed to a per play/per listener rate that the Copyright Royalty Board has imposed on internet radio. That rate currently stands at 0.22 cents per listener/per play for NAB members. Since stations can't predict how many listeners they will have, they can't control their digital transmission royalty payouts, but the rate set in the Big Machine allows for rate predictability.

Big Machine benefits because it has artists like Taylor Swift, who gets a lot of terrestrial radio airplay, and who are now receiving payment for being played. While the music industry has been fighting for performance payments when master recordings are played on radio for years for its recording artists and labels, so far the radio industry has been successful in holding off that demand, even when a Congressional mandate to negotiate such a rate ended in failure 18 months ago. Terrestrial radio does, however, pay performance royalties, but only to songwriters and publishers.

Yet in making this deal, Beasley seems to accept the inevitability of performance rates for master recordings eventually becoming law and, like Clear Channel and Entercom, is getting in front of it by extracting favorable terms to help it grow its webcasting business.

"In our 50-plus years in radio, Beasley Broadcast has witnessed many changes in the way broadcasters deliver music to listeners, Beasley Broadcast chairman and CEO George G. Beasley said in a statement. "More importantly, we have put our money where our mouth is by participating in technological advancements and adjusting our business when we felt it benefited our company and industry."

According to its website, Beasley is mainly a southeast radio group running 44 stations in 11 markets, but it also has stations in Boston, Las Vegas and Philadelphia. Beasley said the new agreement represents forward-thinking in doing business and added, "Working together is consistent with one of our core beliefs ­ that to maintain relevancy, radio must continually adapt to the current environment."

In addition to bringing Big Machine artist a royalty stream that there were previously not getting, Big Machine Label Group CEO Scott Borchetta says his label share's the mission "to help support and grow online digital broadcasting."