Naples-based radio operator Beasley Broadcast Group continues to focus on growing its digital broadcast opportunities.
The company Tuesday announced a licensing agreement with Nashville-based Big Machine Label Group, whose award-winning artists include Taylor Swift, Tim McGraw, Rascal Flatts and Reba McEntire.
"It's a very progressive deal," said Caroline Beasley, executive vice president and chief financial officer for Beasley Broadcast, in a phone interview.
Founded in 1961, Beasley Broadcast owns and operates 43 stations in eleven markets, including Fort Myers-Naples.
Under the agreement with Big Machine, Beasley will share a percentage of its over-the-air broadcasting and digital revenue with the label related to the use of its music.
In the past, Beasley has paid no fees for using the label's music over the air. But the radio operator has been paying for digital music streamed online based on how many times listeners "dial in" to hear it, Beasley said.
While it will add to the cost of over-the-air broadcasts, the agreement with Big Machine will ultimately make the cost of the digital music more predictable and affordable, she explained.
"It helps us plan ahead and to know what our costs are likely going to be in the future," Beasley said.
Beasley follows only a few other broadcasters who have struck similar deals with Big Machine, including Clear Channel. Such agreements have been described as "trailblazing."
"It hasn't been done. It's just starting. We have been in business for 50 years for a reason and that is because we are always looking ahead," Beasley said.
In a statement, Big Machine's CEO Scott Borchetta described the Beasleys as "innovators and great entrepreneurs with extraordinary vision."
The announcement of the agreement with Big Machine came the same day Beasley announced its fourth quarter and year-end financial results for 2012.
Beasley discussed the deal struck with Big Machine and Sprint's preliminary agreement to activate FM chips in 30 million of its mobile devices over the next three years, which she said would be yet another way to grow digital broadcasting and its reliability.
"Most people use their smartphones today to listen to music and stream music," Beasley said. "If there is a disaster, many times your cell service goes down, but if this chip is activated you'll still be able to get your local station."
Beasley Broadcast reported revenues of $27.4 million for the fourth quarter, up 9.1 percent from a year ago. Meanwhile, net revenue at its same radio stations — or stations owned at least a year — increased nearly 5.7 percent.
Profits rose more than 6 percent to $3.6 million, or 16 cents a share, in the quarter, up from $3.4 million, or 15 cents a share, a year ago.
During the conference call, Beasley said fourth-quarter revenue increases were driven in big part to an increase in political advertising, she said.
Political advertising totaled about $1.2 million in the last three months of 2012, with the Obama campaign the largest advertiser in the quarter.
For last year, Beasley Broadcast reported net revenues of $100.2 million, up 2.6 percent from nearly $97.7 million in 2011. Profits rose 9.2 percent over the year to $11 million in 2012, up from $10.1 million.
Shares closed at $4.84 on Tuesday, down 6 cents, on Nasdaq.