Warner Music Group + Clear Channel = Proof the Long Tail Was Bulls*&t…

tailbiter

It’s a strange, inverted paradox: instead of creating smaller niches and more powerful indie relationships, the internet is only breeding bigger blockbusters and possibly, even more powerful media companies.  “So, while the tail is very interesting, the vast majority of revenue remains in the head,” Google executive chairman Eric Schmidt eventually admitted, despite being a major endorser of the niche-focused Long Tail theory at first.  “And this is a lesson that businesses have to learn.”

 

“While you can have a Long Tail strategy, you better have a head, because that’s where all the revenue is.”

 

All of which brings us to a pair of companies that were supposed to be dead by now: Warner Music Group and Clear Channel Media & Entertainment.  Instead, Warner remains one of the largest music companies in the world, while Clear Channel is among the most powerful broadcasters, online or off.

As of this morning, the two companies have started a formal relationship in which Warner will feed Clear Channel with artists in a direct, private revenue-sharing deal between the companies.  “Through this transformative alliance, WMG will share in revenue from all platforms and gain unprecedented opportunities to promote the music of its emerging and established artists across all of Clear Channel’s unmatched multi-platform assets,” the companies emailed Digital Music News early this morning.

In other words: they pick the artists, and then promote the crap out of them across all platforms that matter.  Which also means, if you want massive, broad-level scale and radio access that leads to a massive career and big blockbusters, this is one of the few groups that can deliver it.

 

ceelogreen

The question is whether smaller artists can adequately survive in this climate.  One upon a time, Cee-Lo Green was an artist with a distinctive sound and Atlanta cred; now, he’s an artist the world has heard of.  “The reach of radio, its power to promote, coupled with a recognition of the value of music makes this a great opportunity for artists and a promise to all people that finding their favorite music is fun and fundamental,” Green told Digital Music News.

And with that, here’s just a sampling of the platform that Warner and Clear Channel will be sharing (and controlling).

 

(1) Clear Channel Terrestrial Radio: 850 radio stations nationwide; 243 million monthly broadcast radio users; more than 20,000 nationwide events;

(2) Clear Channel Online + iHeartRadio: 60 million monthly uniques across all digital properties; iHeartRadio theaters;

(3) Clear Channel Outdoor: 143 million person monthly reach of its outdoor assets;

(4) Commercial Advertising: Joint programs will dedicate commercial time specifically to launch new music by providing prioritized new song exposure through Clear Channel’s Artist Integration Program (AIP), which will deliver “carefully timed and continuing promotion”;

(5) Mainstream Television: Major nationally-televised events, including the Jingle Ball annual holiday concerts, the iHeartRadio Music Festival, iHeartRadio Ultimate Pool Party events, iHeartRadio Album Release Parties, and more;

 

Any questions?

 

31 Responses

  1. mdti
    mdti

    The long tail is not necessarily bullshit… as long as you own the whole long tail… and as long as there is an actual long tail.

    Reply
  2. GGG
    GGG

    I disagree that the ENTIRE concept of the long-tail is bullshit. The fundemental idea that niches would flourish relative to mainstream is certainly bullshit and why you need a head to make huge amounts of money, but I think plenty of niches are flourishing incredibly, relative to where they had been in the past.

    I would also like to know what your definition of success for an artist is. If you think some bluegrass guy should make half a mil a year because he’s an incredible banjo player, great, I agree, but let’s be realistic here. If you want to make the most amount of money, I hope you’re a hot piece of ass and/or willing to put on some dumb persona 24/7 and sell yourself as a brand, not a musician.

    Reply
    • Mike Corcoran
      Mike Corcoran

      Agreed. Maybe the idea that the Long Tail would eclipse the Head will not come to pass, but that doesn’t mean the Tail should be dismissed as insignificant. As you mentioned, the Tail is flourishing relative to where it was pre-internet.

      And if you define “success” as making a decent 5-figure living with your music, musicians have a much better shot at success than ever before.

      Reply
      • GGG
        GGG

        Exactly. People on here seem to think success is being rich and famous. If you can make an above average salaray doing what you love, playing music, that’s success to me. You can certainly want and strive for more, but don’t act like you’re a failure. And yes, even making 50K a year can be hard for a musician and depending where you live that might not be a particularly livable salary, but it just seems like people think if they aren’t in 6 figures they’re being fucked by everyone.

        Reply
    • hippydog
      hippydog

      On a bit of a side note..

      Also keep in mind that history (and some examples come directly from the music industry), has shown that as monopolies increase in size and restrictions they also increase their chances of being toppled and replaced (transformed)..

      IE: at some point that “long tail” might just break off and grow a new head 😉

      Reply
  3. Tune Hunter
    Tune Hunter

    It is brilliant synergy made by accident!

    Now lets Shazam in-between as a cash register and we got a traditional business. (minor tune-up required)

    Reply
  4. Casey
    Casey

    Yes, Clear Channel is big. They are also losing considerable amounts of money with a lot of debt payments coming due, at a time when the value of radio stations continues to drop and the competition continues to burn hotter. If it wasn’t for the outdoor advertising unit, the company would have collapsed a long time ago.

    This ultimately sounds like Warner just got everything they could dream of in exchange for lower digital royalty payouts from iHeart? Those royalties were probably a pittance compared to the value of this deal, making this deal very costly for Clear Channel short term. Clear Channel seems to be securing deals to protect their long term future without into account that future deals might increase drastically, making any future savings disappear.

    Reply
  5. Paul Resnikoff
    Paul Resnikoff

    MusicFirst Coalition responds. Here’s an emailed statement we just received:

    musicFIRST Coalition Executive Director Ted Kalo’s statement:

    “While we applaud Warner Music and Clear Channel for working together on a deal that allows more artists to share revenue and we appreciate the forward leaning, pro-artist sentiments expressed by Clear Channel’s leadership, these deals are no substitute for a real, industry-wide AM/FM performance right.

    “Unfortunately, Clear Channel and its trade association, the National Association of Broadcasters, have been the principal roadblocks to ending the loophole that allows AM/FM broadcast radio alone to take music without paying artists or labels. Negotiations are good — but no one can say they are a complete solution when only one side at the table has rights to deal. And no one can dispute that, if creators had such a right, all creators (not just those on labels that negotiated a deal) would be more justly compensated.

    “The NAB faced a brutal week on Capitol Hill, with lawmakers pointing out its hypocrisy in arguing that video creators must be paid for their work while music creators should not. Isn’t it time for the NAB to be consistent and principled rather than hypocritical?

    “Only a legal performance right will provide artists, including non-featured artists, the security they deserve: the right to be paid for their work. And only a legal right will create reciprocity for foreign radio airplay so that artists can receive an estimated $100 million a year in income from overseas.

    “If Clear Channel’s leadership is as forward thinking and pro-artist as their statements suggest, we hope they will at long last publicly break from the NAB’s obstruction of a performance right. Mr. Pittman says that artists and broadcasters need to be ‘more supportive of each other’s needs.’ Supporting a real performance right would be a good place to start.”

    Reply
    • Tune Hunter
      Tune Hunter

      Radio SHOULD NOT pay to play your music.

      Radio stations should be converted to music stores! Yes, you hear me right, MUSIC STORES!

      It will improve the play lists and bring cash to ALL.

      Just eliminate most of the radio display info and convert music ID services to cash registers.

      Radio serves the tunes they can monetize the best (no more same crap over and over) Shazam becomes a TOLLBOOTH on your way to Spoofy, VEEVOO or The Tube.

      Stage one will double the business.

      Stage two will take us to 100 billions /year.

      Discovery Moment Monetization – no more dreaming.

      Reply
      • Mike

        Still, you are asking consumers to pay for something that they liberally and historically have refused to pay for in the digital age. Not to mention, radio, as a participation platform, has been decaying at frightening levels.

        In a later post you say “pay the 39-cents or walk.”

        Sorry, as both a consumer and a retailer I don’t see how this idea makes any sense. And maybe that is why you constantly post it, to gather the masses and all, I am guessing, because nobody in the business takes this idea seriously.

        But good luck with that.

        Reply
        • Tune Hunter

          If there is no info on radio display and Shazam and friends are new tollboots (purchase only option) you will pay – no choice!

          Reply
        • hippydog

          OMG McQ Why are you encouraging him?..

          his idea cant work because it fails even the simplest logic tests.

          Reply
          • Tune Hunter
            Tune Hunter

            Your logic. The best way to predict future is to create it.

            We need creators not wimps consuming investors money on projects giving away all goods!

          • hippydog
            hippydog

            At first I thought you were just a weird troll…

            But now I am actually starting to believe you are insane.

          • Tune Hunter
            Tune Hunter

            My patents (not counting my misused and abused Music ID patent) converted to over 100 million dollars in actual products.

            How many patents you have? Mr. Sane.

        • Tune Hunter
          Tune Hunter

          It has to work – it is not crazy – simple, logical and fair to all!

          There is room for streamers, and there is a room for 10 billion dollar music segment of YouTube.

          I have my one list of “Ten Executors” at labels and RIAA.

          If someone lock them in one room for half a day we will double the business in 36 months.

          Mr. Keeling is not on this list!

          Reply
        • Visitor
          Visitor

          You get it? Because I sure as hell don’t. Especially when he talked about charging for RDS. As if keeping people blind about what music they are listening to would actually increase sales….

          Reply
          • GGG
            GGG

            I get that’s what he wants to do. He posts the same thing 30 times a day. Paul could write an article about brocolli and Tune Hunter would somehow work in his discovery scheme.

          • Tune Hunter

            You are brilliant!

            We do need article about broclli.

            It was must have food for Sokrates and Julius Cesar. It might do miracle for label’s top brass.

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