Glassnote Entertainment pacts with Clear Channel

Duo ink deal over terrestrial, digital radio

Glassnote Entertainment, home of Mumford & Sons and Phoenix, has become the second music firm to make a revenue-sharing deal with broadcasting giant Clear Channel for terrestrial and digital radio.

The agreement, announced Thursday, succeeds Clear Channel’s groundbreaking pact with Big Machine Music Group (Daily Variety, June 6). The Nashville-based company, whose roster includes Taylor Swift, Tim McGraw and Rascal Flatts, was the first firm to derive royalties from its acts’ airplay.

Clear Channel said the Glassnote deal is geared to supporting “the development of a vibrant and sustainable digital music industry to the benefit of all constituencies.”

Pact with Glassnote was announced the week Mumford & Sons’ sophomore release “Babel” went on sale. The U.K. folk-rock act’s release is expected to debut at No. 1 on the U.S. album chart next week with the biggest first-week sales tally to date this year. Its 2010 debut release “Sigh No More” has sold 2.4 million copies to date.

Glassnote’s other acts include Two Door Cinema Club, Childish Gambino, Oberhofer and the Temper Trap.

Deal between 850-station terrestrial radio giant Clear Channel and another high-profile independently-owned label is the latest step in addressing the ongoing issue of label and artist royalties for radio play. While music publishers benefit financially from airplay, artists and labels do not, and the broadcasting industry has long opposed such payments. Most recent attempt to secure radio royalties fell apart when federal legislation stalled in 2010.

Glassnote CEO Daniel Glass said in a statement, “We built Glassnote to be a next-generation music company that embraces change, including evolving technologies…This partnership aligns our business interests more closely with Clear Channel, and we’re excited about being part of the drive to grow digital radio faster and bring all of its benefits to music fans.”

Clear Channel CEO Bob Pittman added, “…(I)t’s no surprise to us that Glassnote quickly saw this was a great opportunity to help move the digital radio industry towards a more sustainable future. Not only will this agreement expand (Glass’) label and artists’ participation in all of Clear Channel’s radio revenues; it also creates a vibrant new digital radio business model that we believe will provide more money for the artists and the labels and more digital choices for the consumer.”

Clear Channel’s deals are geared to development of the still-infant digital radio market. Firm’s terrestrial broadcasts account for 98% of its audience, with digital taking up just 2%. Clear Channel has sought to stoke its digital side with the online and mobile platform iHeartRadio, which was promoted by an all-star festival in Vegas last weekend.

At present, royalties are federally mandated for digital radio play only. The scale of payment could change for some services like Pandora and iHeartRadio, since a new bipartisan bill addressing digital royalties, the Internet Radio Fairness Act, was introduced in Congress last week.