Clear Channel: Here, Buy a Listen

Chicago’s FullAudio Corp. Monday was the winner of a significant contract to provide Web services to 30 of broadcasting behemoth
Clear Channel’s 1,200 stations and inked a licensing agreement with record label giant Universal Music Group.


Terms of the deal were not disclosed, but San Antonio, Texas’ Clear Channel is expected to launch the first co-branded service of
the exclusive pact this January for monthly fees that could range from $5 to $15. The stations will represent five diverse, major
markets, including Chicago, Houston, Los Angeles, Phoenix and Salt Lake City.


Basically, users will have access to music in addition to a library of digital music from multiple formats. Incidentally, this
library was bolstered Monday when FullAudio tabbed Universal Music Group’s catalog, agreeing to a two-year, non-exclusive agreement
deal in wich it will offer customers tethered downloads from Universal’s catalog.


How will this work? For example, listeners of Los Angeles’ KBIG (104.3 FM) can listen to KBIG’s Adult Contemporary format just by
downloading the music online from any Web-enabled PC. The appeal is that, before the deal, you couldn’t get un-radio-friendly music
from Clear Channel. Now you can.


Moreover, FullAudio is lauding its “cache-download”-driven service over traditional streaming music services, which the firm said is
only as good as a PC’s Internet connection. FullAudio said its music quality will be almost CD-like and will allow consumers to play
tracks on their PC when they’re not connected to the Internet.


FullAudio likens its subscription service to cable television, in that users need to make sure they pay the company so their service
is not interrupted. Like RealNetworks Inc., FullAudio also offers varying depths of service, including Silver, Gold, Platinum.
Lastly, FullAudio music is unlocked from the memory on the consumer’s PC by the service.


Jerry Kersting, chief financial officer of Clear Channel’s Radio division, discussed how the agreement will benefit music fans and
businesses in a public statement Monday.


“The FullAudio music services provide our listeners terrific quality and selection, and the ability to listen to some of their
favorite Clear Channel radio stations far beyond the reach of those radio waves,” said Kersting. “This new service also delivers
more impressions to the advertisers on our radio station websites. And it allows us to deliver Internet radio in a manner that
protects the rights of the music copyright holders.”


In addition to FullAudio’s newly-announced contract with Universal, the firm also licenses content from EMI Recorded Music, EMI
Music Publishing, Universal Music Publishing and BMG Music Publishing — all major label plays. This is symbolic of the mish-mash of
the competition and evolving synergy in the digital music subscription arena, as FullAudio competes with major label-backed players
such as MusicNet and pressplay, yet still licenses content from the labels. After all, they have to get the music from somewhere.


In other Web music news, Yahoo Inc. Monday penned a deal with Citadel Broadcasting Co. to nationally broadcast Citadel’s 140 radio
stations on Yahoo! Radio. Financial terms were not disclosed, but the real significance is
Yahoo!’s in-stream advertising technology, which allows online ads to be inserted over the stations’ local advertisements.


The push toward this technology springs from compensation-related advertising issues that have plagued terrestrial radio. In April, Clear Channel Internet Group (CCIG) pressed the pause
button on its audio Web sites and paved the way for a number of media sites to follow suit after pressure from advertisers, who
inked a contract with the American Federation of Television and Radio Artists (AFTRA), the union that represents actors who voice
radio commercials, last fall.


The contract pays the actors 300 percent of their normal fee if radio stations play their ads on the Internet as well as on the
radio. After these advertisers were reminded of the fees, they asked Clear Channel, an operator of 750 interactive Web sites, to
cease airing radio commercials over the Internet.


But two months later, Clear Channel was back in business
after it inked a revenue-sharing deal with Hiwire, one of several firms that provides streaming ad insertion technology to
terrestrial stations. Hiwire detects upcoming commercials in a broadcast, and strips out the commercial as the stream is rebroadcast
on the Web. In its place, Hiwire inserts an AFTRA-compliant ad — one for which advertisers have paid Web repurposing fees.


Yahoo!’s deal Monday with Citadel recalls this pact.

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