The deal is characterized broadly: “[The agreement] will enable its imprints Broken Bow Records and Stoney Creek Records and its artists to share in revenue across Clear Channel’s broadcast radio and iHeartRadio streaming stations.”
The broadcast portion of that agreement provides performance royalties to the labels and their artists, which Clear Channel (and all terrestrial radio) is not compelled to pay by government licensing regulations. For the most part, labels and performers do not receive any compensation for airplay of their recordings in the U.S.
By bundling a revenue-share agreement across terrestrial (radio) and online (iHeartRadio) platforms, clear Channel presumably packages a favorable licensing arrangement for itself with an eye to the future, with lower online royalties in exchange for broadcast revenue. Terms of the deal, and the nature of reciprocity to Clear Channel, are not disclosed in the press release. Clear Channel’s most publicized prior deal of this sort is with Warner Music Group, finalized in September. Competing radio group Entercom has made on-air/online royalty deals with independent labels, also. Industry reaction to arrangements of this type are generally favorable, while leading lobbying group of the recording industry, the RIAA, calls for a legal remedy to the lack of compulsory royalties for broadcast use of recordings.