Did the Big Machine/Clear Channel deal just set Webcasting rates at 3% of revenue?

Copyright nerds might want to pay close attention to a brief aside in a post from Oxenford on the Broadcast Law blog. 

In that aside, David refers to possible parameters in the Big Machine / Clear Channel royalty deal: 1% of revenue for broadcast royalties, 3% of revenue for webcasting. (These rates were also reported by InsideRadio).

These parameters were apparently not denied by the President of Big Machine.  Instead,  these rates were referred to as “in the ballpark.”

And what a ballpark! A rate that is orders of magnitude lower than that paid by pureplay webcasters and roughly 40% of that rate paid by satellite broadcasters.

To put the orders of magnitude in perspective… Under this 3% rate, Pandora would pay $12million in 2012 for sound recording use, rather than $130m.

The plot thickens…

2 thoughts on “Did the Big Machine/Clear Channel deal just set Webcasting rates at 3% of revenue?”

  1. I think it’s safe to assume Big Machine would not have settled for 3% of digital radio revenue in the absence of broadcast radio royalties. And we can assume this is a short-term deal that does not constrain Big Machine to 3% of digital revenue if the NAB and RIAA reach a settlement on performance royalties. Given those two factors, what does this deal really tell us?

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    1. The deal, if these rates are true, suggests there may be a far wider space within which to roam, as far as webcasting rates are concerned.

      Particularly given the pile of money the NAB supposedly offered for broadcast radio royalties (from all member stations) was a pile nearly equal in size to that which Pandora alone pays in webcasting royalties.

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