Fullaudio, Clear Channel Ink Web Deal

In a move that sets the table for radio to become a rival to traditional music retail, Chicago-based digital music subscription service developer FullAudio has entered into a distribution deal with Clear Channel Communications.

Under the agreement, FullAudio will be the exclusive on-demand music subscription provider for Clear Channel Radio station Web sites in five U.S. markets: Chicago, Houston, Los Angeles, Phoenix, and Salt Lake City. FullAudio will provide co-branded services to approximately 30 stations in those markets. A small number of pilot stations are expected to begin trials of the service in January. Participating stations for the test program have not yet been determined.

Determination of which stations will participate in the trial will hinge upon which tracks and genres the company is able to obtain publishing rights for, says FullAudio president of music services James Glicker. Monthly fees are expected to range from $5 to $15 with a base of 50 downloads.

Each of the Clear Channel radio stations in the participating markets will offer its listeners a format-specific service powered by FullAudio. Users of the service will also have the ability to access music from other genres based on indicated preferences.

Glicker says Clear Channel will publicize the service through their stations and on-air personalities. They also plan to offer special themed packages, such as the picks of a certain DJ. "We'll get on-air announcements with their talent as well as some measure of commercials," he says. "Whether it's really commercial is yet to be determined, but we'll get a lot of mentions on the air and on their Web sites."

Chris Copeland Gladwin, chairman/CEO of FullAudio, said in a statement that the deal marks "an industry first and a major stride in [FullAudio's] distribution strategy."

Gladwin contends that after their favorite artists, radio stations are the "brands" music fans commit to most. Indeed, Jerry Kersting, CFO of Clear Channel's radio division, said the appeal of the deal was its ability to extend the brands of its radio stations "far beyond" the reach of their signals. What's more, he noted that the service is intended to deliver more impressions to the advertisers on the sites of its radio stations.

Meanwhile, Universal Music Group (UMG) has agreed to license selected content to FullAudio. The two-year, nonexclusive agreement with UMG allows FullAudio to rent access to downloads from "a broad selection" of the Universal Music catalog.

FullAudio has content licenses from Universal Music Group and EMI Recorded Music and publishing licenses with EMI Music Publishing, Universal Music Publishing, and BMG Music Publishing.