Clear Channel's Greatest Hits: Clear Channel drops royalty grab

We won!

A little over a week ago, the Future of Music Coalition announced a new campaign to end a sneaky move by Clear Channel to not pay indie artists’ royalties. We are pleased to announce Clear Channel has capitulated – in just 10 days.

We couldn’t have done it without your work, but we still need your help to bring about a better music industry (more on that later).

Here’s the background: As part of a settlement to end an FCC investigation into allegations of payola at some of their stations, Clear Channel and other broadcasters agreed to play 4,200 hours of local and indie music. Clear Channel set up a web page attached to each of its stations’ web sites that allowed local and indie artists to submit their music for consideration, but there was a major catch: artists had to check a licensing agreement that said that the artist granted “Clear Channel the royalty-free non-exclusive right and license, in perpetuity […] to use, copy, modify, adapt, translate, publicly perform, digitally perform […]” the content submitted via their website.

Clear Channel was asking artists to waive their performance royalties as a consideration for airplay. In other words, Clear Channel had responded to allegations of payola with a pay-for-play scheme aimed at indie artists.

This was an unconscionable action. As we shift from a physical to a digital music marketplace -- especially one in which fans will increasingly pay for access to music via subscription services -- performance royalties will become a more significant portion of artists’ revenue. It is critical that precedents are not established that require artists to relinquish royalties as a condition of airplay.

Last Monday, July 9, we launched a week’s worth of daily blog posts devoted to the topic. Then, Congress got involved. On Thursday, July 12, Senator Russ Feingold, D-Wis., sent a letter to each of the major radio station groups, questioning their intent to honor the conditions of the payola consent decree. Feingold referenced the Clear Channel royalty issue in the letter, saying that the “required royalty waiver seems to violate the April commitment not to barter access to music programmers. I encourage you all, and Clear Channel in particular, to clarify this issue.”

If you remember, we also promised you a surprise at the end of the week. On Friday, July 13, we filed a Request for a Declaratory Ruling at the FCC over Clear Channel’s actions.

It was clear by the end of last week Clear Channel had had enough.

As of Monday, July 16, Clear Channel had revised the language in the licensing agreement. The new language removed the words “royalty-free” from the agreement, which ensures that artists can keep their rights to their public performance royalties. One of the nation’s smallest music non-profits beat back the nation’s most powerful broadcasters.

The victory is good for FMC, but great for all musicians. It proves that we can take on the most powerful forces in the radio industry and win. It also shows a more equitable music business is possible if we band together to make a concerted effort.

You can continue this work by taking one or more of the following actions:

1) Get five artist/musician friends to sign up to receive the FMC newsletter.

2) Join the Rock the Net campaign, which brings together artists, labels and music fans to support net neutrality.

3) Attend our 7th annual Future of Music Policy Summit, September 17-18, 2007 in Washington, DC, where an unprecedented group of panelists and keynote speakers together with an engaged, diverse audience for a robust debate about the critical issues at the intersection of music, law, technology and policy. Registration is open now, and we have scholarships available for working musicians.

4) Donate money to FMC.

5) Support the fight for Low Power FM Radio, which will help break the corporate control of the airwaves.

Thanks for your help.