Billboard reports that America’s biggest purveyor of FM crap, Clear Channel, has struck an agreement with a single label, Big Machine, to set up the first sound-recording performance royalty program for terrestrial (as opposed to digital) radio play. Currently, songwriters are compensated when their songs are played on the radio on a pay-per-play basis. Radio stations pay ASCAP and BMI annually, then those organizations distribute the money back out to the songwriters. Artists (when they differ from the songwriter) apparently don’t get directly compensated as part of this agreement, and broadcasters have long resisted such a setup, justifiably noting that the mere fact that FM radio shoves major label music down the throats of America’s youth nonstop should be compensation enough, given that an artist’s popularity at least partially requires heavy radio play to instill.
Scott Borchetta (rhymes with porchetta, a delicious roast pork dish; considering I imagine all major label execs to resemble the porcine Lou Perlman, that seems oddly relevant) of Big Machine came up with a new idea. Instead of a pay-per-play model, why not pay the record labels a percentage of ad revenues? If ad revenues suck, then the labels get less money. The percentage of ad revenues Borchetta brokered with Clear Channel hasn’t been disclosed, but once that money comes into Big Machine, they’ll keep half and then half will be distributed back to artists.
Why only Big Machine, though? While Clear Channel is open to this new idea, they’re not about to open the flood gates to all labels who want sound-recording performance royalties (something they need to come up with a better name for, stat). Once the waters are tested, this new compensation format may be extended to other labels. The bottom line is that this seems like a fishy way to circumvent the agencies that regulate compensation (ASCAP, BMI), and will only encourage radio stations to play more commercials, thus making it an even more insufferable experience than it already is. Yay mainstream radio!