When Scott Borchetta caught up with Billboard at IHeartRadio in 2012, he was struggling with the best royalty solution for Big Machine Label Group and free streaming music services like Spotify. One year later, however, little has changed about his perspective. “I think it’s a continued race to the bottom and we’re gonna fight to continue to have a value to the artists and the music that we put out,” Borchetta said in a backstage Q&A with Billboard Saturday night at the MGM Grand Arena in Vegas.
But with Beats Music, which is in discussions with AT&T and other carriers as distribution partners when it's slated to launch later this year, Borchetta sees some promise. “There’s a great subscription service that they’re working on. And the aesthetic of that company and Jimmy [Iovine] and Trent Reznor and that crew, we’re going to be affiliated with them on a certain level. Those are the type of situations that we think are going to bring value to what we’ve got. We understand people are streaming, we get it. I’m not saying we’re not gonna be there. I think people want to keep streaming new music. Well, news flash: If [we] keep making $0.000001, we’re not gonna be able to afford to keep making records. So there is a value there and we’re going to keep pushing to make sure that value is appreciated by everyone.”
On the terrestrial radio front, Big Machine became the first label group to sign a strategic alliance with Clear Channel that allowed the company to share in the revenues from promoting its artists like Taylor Swift, Tim McGraw and Rascal Flatts across Clear Channel’s 850 stations as well as its digital properties. Earlier this month, Warner Music Group became the first major to join the fold, which Borchetta described as “the biggest ripple in the pond.”
Since inking the deal with Clear Channel, Big Machine has entered into similar agreements with Beasley Broadcasting, Greater Media and Entercom, accounting for four of the six major radio conglomerates. That leaves only Cumulus and CBS Radio -- a fact not lost on Borchetta, who said to the camera, “Come on Leslie [Moonves], come on Lew and John [Dickey].”
Also keeping Big Machine busy is a publishing joint venture the company started earlier this year with Dr. Luke’s Prescription Songs. Borchetta reports that he has not only signed “a couple great writers in the program,” but he and Luke are also “working on a couple TV property ideas -- so nothing I can reveal.” He hoped to have news by IHeartRadio 2014, by which point one of the names mentioned as part of that TV strategy just might be Judy McGrath. The longtime MTV vet joined Sony earlier this year to form her own production unit, Astronauts Wanted: No Experience Necessary and is a “big pal” of Borchetta’s, too. “You know, when she was at MTV, she helped me break Taylor Swift. She’s a fantastic mind. I always welcome the time to spend time with Judy McGrath.”
In a wide-ranging Q&A with Billboard Biz, Borchetta also discussed his artist Justin Moore, who’s aiming for a surprise No. 2 debut on this week’s Billboard 200, the current rock and hip-hop leanings of country music, and the impact of the Jay Z-Samsung deal.