Groundbreaking Clear Channel, Big Machine Deal Pays First Ever Artist Performance Royalties

(UPDATED) Big Machine Label Group, home to Taylor Swift and Tim McGraw has struck a precedent-setting deal with Clear Channel Media that makes it the first record company who, along with their artists, will directly participate in terrestrial radio revenue.

The record industry has long sought to expand broadcast royalties beyond songwriters to performing artists and labels. Prior to the Big Machine deal, only internet and satellite radio has paid artist performance royalties, also known as sound recording performance royalties. Notably, the Big Machine deal was made without the help of a performing rights organization and by-passes SoundExchange for digital collection.

Details of the deal we're not disclosed, but statements by both sides hint at a broader partnership that may include lower digital rates, at least for now. "Today, 98% of our listening is terrestrial broadcast and 2% digital – with record labels and artists only paid for the 2%," said John Hogan, Chairman and CEO of C lear Channel Media. "This new agreement expands label and artist participation from just digital to terrestrial broadcast radio revenues…that will give all of us a great incentive to drive the growth of the digital radio industry, and allow everyone to participate financially in its growth."

"For years, record companies and media companies have looked for a new way to do business together that would bring our interests into line," said Scott Borchetta, President and CEO of Big Machine. "Not only does this partnership enable Big Machine to participate in terrestrial broadcast revenues, but we are also helping to grow digital radio – a great opportunity for all of us and a breakthrough opportunity for Big Machine artists."

Artists with Big Machine's wholly owned labels who will benefit from this agreement include Big Machine Records artists Swift, McGraw, Rascal Flatts, Edens Edge and Ella Mae Bowen, along with Valory Music Co. artists Reba McEntire, Justin Moore, Brantley Gilbert, The Mavericks and Thomas Rhett.