Clear Channel-Warner Music Deal Rewrites the Rules on Royalties

For decades, Clear Channel Communications and other big radio companies have fought fiercely to avoid paying record companies for songs they played on the air. But with the business going digital, Clear Channel is now eager to make a trade.

The company announced a deal with the Warner Music Group that would for the first time allow the label and its acts to collect royalties when their songs were played on Clear Channel’s 850 broadcast stations. In exchange, Clear Channel will receive a favorable rate in the growing but expensive world of online streaming. Warner, the smallest of the three major labels, will also get extensive promotion for its acts, which include Bruno Mars, CeeLo Green, Coldplay and Green Day. Over the last year, Clear Channel has struck a number of similar licensing deals with smaller companies, including Taylor Swift’s label, Big Machine. But Warner is the first major company to do so, and the deal highlights both the importance of streaming and the continuing debate in the music industry over how music should be licensed and paid for. For Clear Channel, these deals are a bet on the future of digital radio, as well as an attempt to control its costs.