Clear Channel Modifies Indie Radio Play Contract After Beatdown
After media scrutiny of their online agreement for indie artists and labels who want to upload their music to be considered for broadcast and digital downloading, Clear Channel has revised its policy. Clear Channel’s unctuous contract forced artists and labels to waive their right to receive royalties, if they participated in the government’s mandated program. The behemoth’s agreement was completely contrary to the intention of the FCC’s settlement, which forced the prominent radio stations to open up the airwaves to emerging artists after they were busted for payola.
The American Association of Independent Music (A2IM) spearheaded the backlash by emailing its members and urging them not to sign the license, and the Future of Music Coalition (FMC) began a press campaign condemning the license, and claiming that Clear Channel was in violation of a settlement agreement reached after an investigation of alleged payola. The group also filed a petition with the FCC on the issue.
Due to the combined pressure of A2IM, FMC, the Recording Artists Coalition (RAC), and even Senator Russ Feingold, a Democrat from Wisconsin, who sent a letter to Clear Channel questioning the move, Clear Channel is now in the process of revising the contract. The revised license will offer three options for an artist or independent label to submit their music for consideration and possible airplay. They can choose to submit their music for: 1) terrestrial radio broadcast and Internet radio simulcast; 2) on-demand streaming; or 3) digital downloading. All statutory royalties established now or in the future will be paid for terrestrial radio broadcast to the respective performing rights organization, and for Internet radio simulcast through SoundExchange (Option 1). Only public performance royalties to songwriters and publishers will be paid for on-demand streaming (Option 2). Royalties will be waived for digital downloading (Option 3). The licenses will be non-exclusive and can be terminated at any time.
Under Option 1, there is no option to waive any statutory royalties for terrestrial radio broadcast and/or Internet radio simulcast. Thus, there can be no claim that an artist is waiving a royalty in exchange for radio airplay. Recording artists will also have the right to choose whether or not to allow for on-demand streaming and digital downloading of their sound recordings without the payment of royalties (except for the public performance royalties paid to songwriters and publishers for on-demand streaming). This allows recording artists the choice of giving away their music as a promotional tool, or not, and the choice to revoke the license for any reason, at any time.
Andy Levin, Clear Channel’s chief legal officer, said in a statement: “This is a perfect example of no good deed goes unpunished. We never had any intention of not paying licensing fees for radio air play or for online streaming of simulcast programs. RAC and A2IM brought to our attention that the licensing agreement could have been construed otherwise, so we clarified it well before FMC filed its misleading and misinformed petition. FMC’s allegations of a ‘payola-like scheme’ are irresponsible and totally false.” He goes on to blame the original contract on “overzealous lawyer.”
The Future: First off, Levin’s statement is a load of garbage. Clear Channel, miffed at being slapped on the wrist for their ongoing payola scams, tried to pull a fast one on the disadvantaged artists who the FCC was attempting to protect in the first place. Leven, the overzealous lawyer, thought that no one would notice the little clause, and Clear Channel could continue their knavish ways of mashing their boot heel onto the scrotum of the independent artist scene. Thanks to a concerted effort by the media and several coalitions, it would be nice to think that the indepedent artist will this battle, but Clear Channel will most likely figure out a way to stamp out the little guy in the end.