Slashdot Mirror
Shocked, Shocked at Payola
"It costs a record company about $250,000 just to launch a single on rock radio today. That doesn't guarantee success; it just gives the single access to the airwaves. If the song catches on and eventually crosses over to the mainstream Top-40 format, indie costs balloon to more than $1 million per song." Salon.com has a pair of articles on payola today: one on
the widening scandal
and one specifically on
a curious Clear Channel case. For context, here's
our latest payola story,
or if you want the background on why the labels hate the promoters but can't shake the habit,
my writeup from a year ago.
(If you want some beach reading on this topic, go check out
"Hit Men.")
If the record companies have to pay so much to get broadcast radio to play their music, you think they'd be happy to let the internet radio stations do it for free.
Clear-Channel puts SO MANY ADS on their lame ass radio stations, it must cost so much to put on a single because no one will listen to their damned sprint commercials all morning long.
Here's a tip for clear-channel: You want more listeners? PLAY MORE F*cking music and less DUMB DUMB DUMB RETARD LOVING CRICKET COMMERCIALS@!!!&^$!
Linux is dead.
LU
So I would expect this to continue until someone with political clout (e.g. Clear Channel) is hurt; at that point there there will be a big brawl in Congress but again the individual consumer will not be at the negotiating table.
sPh
What gets me is that on one hand, the labels are whining that the radio stations WON'T play their music, and on the other hand bitching that webcasters ARE playing their music.
Free exposure was there for them, but they shut it down!
I'm not a Libertarian per se, but to tell you the truth I don't see the problem here. Why does the government need to step in and tell the market how it's "supposed" to work? If the public doesn't like the music being played on radio stations, don't listen. It really is as simple as that.
If a band can't afford to be played on the radio, then use other ways to promote. If their music's any good, then it might find a market. And maybe it won't. Big deal. No one is "owed" access to my ears.
Maybe someone can explain to me what the problem here is.
Sometimes it's best to just let stupid people be stupid.
The RIAA is complaning monopolistic practices costing them more money. Talk of the pot calling the kettle black.
And I like to add:
So let's start spreading the word, especially to the music artists we know. Maybe it will change something...
Oh yea, I forgot: I have no ideas on how much can a CD cost in the US. Here in Europe they cost like 20 euros each (which is more or less 20 dollars..). And please forgive me for my bad English, I hope you got the point and won't start bitching me around for spelling. Cheers.
-- There are two kind of sysadmins: Paranoids and Losers. (adapted from D. Bach)
When has the music industry not been one giant mess? Wasn't there a payola scandal in radio in the mid-50s or ealy 60s?
I'm dating myself but when I was a kid you could go into record store (yes vinyl records) and right up front see the rack of the Top 40 "45s". Even 10-year-olds could figure out that the ratings weren't exactly based on what other people thought of the songs. For instance how did a song get into the Top 40 to start with? The Top 40 rack was the only source of 45s in the store and the LP containing the songs on the 45 didn't usually make the racks until well after the "hit single" was in heavy rotation on the local radio station. So who was "voting for" or buying the 45s to get them into the Top 40 in the first place? Nobody heard the songs until the 45s appeared in the rack.
Periodically obvious poop made it into the Top 40 temporarily. Nobody and I really mean nobody listened to about a quarter of the 45s in the Top 40.
I've heard that the music industry is totally 0wned by the mob but I'm not too sure about this. If mob-0wnership is the case the situation just won't change.
Quit playing Monopoly with Bill. Switch to one of many non-Microsoft products today.
"So I would expect this to continue until someone with political clout (e.g. Clear Channel) is hurt; at that point there there will be a big brawl in Congress but again the individual consumer will not be at the negotiating table."
Ah yes, welcome to the New America. Of the Corporations, By the Corporations, and For the Corporations. And absolutely no one looking out for us mere "subjects."
That low-level whirring sound you hear from Massachusetts to Georgia is the sound of our Founding Fathers spinning in their graves.
Learn from the mistakes of others. You won't live long enough to make them all yourself.
Satellite is, if anything, worse. Instead of being one major player with a few minor ones and thousands of stations, there are 2 companies and like a hundred stations. Satellite is super-scary in that respect. If it seriously displaced terrestrial radio, the amount of control would make today's situation look like anarchy/a free market.
I don't think that Congress would be willing to condemn this since it closely parallels the current system of lobbyists.
Dupe posts are
Statement of US Senator Russ Feingold on Market Concentration in the Radio, Concert, and Promotion Industries
"Thank you Mr. President. I rise today to voice my concerns about the concentration of ownership in the radio and concert industry and its effect on consumers, artists, local businesses, and ticket prices.
...
In 1996, prior to the passage of the Telecommunications Act, there were 5133 owners of radio stations. Today, for the Contemporary Hit Radio/Top 40 Formats, four radio station groups - Chancellor, Clear Channel, Infinity, and Capstar - control access to 63 percent of the format's 41 million listeners nationwide.
...
Many of the same corporations that own multiple radio stations in a given market wield their power through their ownership of a number of businesses related to the music industry. For example, the Clear Channel Corporation owns over 1200 radio companies, more than 700,000 billboards, various promotion companies, and venues across the United States. Also, just three years ago, in 1999, Clear Channel bought SFX productions, the nation's largest promotion company.
...
Ticket prices have gone up by nearly 50 percentage points more than consumer prices since passage of the Telecommunications Act - and that doesn't even include the facility fees, parking charges, box office charges or food and beverage increases.
...
It isn't just about who's talented, and who deserves to be played. It's about a shakedown, and that's just unacceptable, Mr. President, for the industry, for the artist, and for all of us as who listen."
Travis
Doh SomaFM got shut down too? My personal favorite monkeyradio just got shutdown by the RIAA. I have listened to soma occasionally. After MR got shutdown i was looking for the Soma stream but i guess the RIAA thugs got to them also. The sad part is MR could probably get permission from most of the copyright holders but that doesn't matter. Just streaming audio on the net and you get shakendown. I mean the RIAA has a real racket going here. They are just thugs. I mean basically you have to pay for "protection" from the lawyers. how is that different from paying the mafia for "protection" from getting your nightclub burned down or your cargo tossed into the ocean? It's just a big scam, only difference the RIAA does it with the blessing and aid of our government.
It seems that the the Deal that Yahoo struck with the RIAA a while back has an awful lot to do with the back room shennaniganns that were somewhat implicate in the CARP arrangement.
This deserves major news coverage of it's own.
Kurt Hanson of Save Internet Radio has a letter that he received from Mark Cuban, former owner of audionet.com/broadcast.com/Yahoo! Broadcast on how the Yahoo!-RIAA deal was structured. Read the entire letter here.
Bottom line:
- The voluntary royalty deal between Yahoo! and the RIAA that the Librarian of Congress announced as his template for the entire industry last week was a deal crafted by Yahoo! to shut out small webcasters and decrease competition.
- The villian in this story is not Yahoo! (They were simply being savvy businesspeople!) The villian is the CARP process by which this anti-broadcaster, anti-small-webcaster deal became the template for the industry
- As Mark Cuban says, they didn't want percent-of-revenue pricing art Broadcast.com Why? Because "it meant every "Tom , Dick, and Harry" webcaster could come in and undercut our pricing because we had revenue and they didn't".
End Result? We probably need to start screaming at Congress again."It is a greater offense to steal men's labor, than their clothes"
If they're good, they can get a record contract and get on the air too.
Quantity and quality aren't necessarily the same thing.
The music industry spends a lot of money finding (or making) what people want.
Actually, considering that more than 90% of major label releases lose money, and that the record industry as a whole has been on a downward sales slide for the last couple of years, a more accurate statement would be to say that the music industry spends a lot of money finding/making what people don't want.
I think a while back the tech industry learned the lesson that "push" technlogy was only viable to a certain extent. People didn't mind getting headlines refreshed on their desktops or reminded of "buddies" logging on to IM systems, but they got annoyed pretty quick if they felt like something was getting rammed down their throats and they were getting raped monetarily.
The exact same lesson is getting played out on a much slower time scale in the music and film distribution business.
The payola problem simply highlights the inefficiencies built into the current distribution system. The weight of it creaks and the smell of it reeks.
"Provided by the management for your protection."
But I feel I should have a go at putting some numbers that I was once quoted out there for /.teers to shoot down. Here goes.
The music industry in the US releases about 30,000 albums every year in total. That's about 600 a week. You can verify this figure plenty of ways - including looking on the web. Now here's where the figures start to be pulled out of someone's arse. It's been said to me by people who should know that some number way smaller than 10% of these releases actually make money. This is the missing information that people like Courtney leave out of their diatribes against those bloodsuckers in "the industry".
So when records go off like a bomb, and record companies sit there raking in the profits, don't forget that these profits go to pay for the other 90% of albums that didn't make any cash.
The record companies are not making that much in total, anyway. Their annual reports are online, so you can check this stuff too.
Basically, I'm just a bit bored with hearing the same old charges raised and accepted without any support
So on to payola. Again, this is essentially a storm in a teacup, with lots of missing information that never seems to get presented. For example, payola is the same story as in the supermarket game.
Did you know that supermarkets make more money from placing the product on their shelves than they do from taking it off their shelves (ie selling it to you and me)? Standard stuff. So it is with payola. The radios make more money playing the music than squeezing in the ads. That's how they can afford to play that "nonstop hour of music" or whatever at lunchtime!
Of course record companies, or anyone, need to pay to get their products placed! I don't know why anyone thinks it is any different! The radios are businesses, and they can play what they like, so they play what is in their shareholders interests to play.
Flame away, but I don't understand the shocked gasps that always follows this kind of "revelation", just like I don't understand how people get away with painting the record companies as ravening beasts, when a simple look at the balance sheet tells you they are out there makin' deals just like every other business since the dawn of time. If they were super-profitable, don't you think everyone would be doing it?
This is true, the radio companies do pay for paying the music and the labels pay to get it played. The reason for this is that it is two different groups paying and being paid.
A long time ago the recording industry agreed to separate mechanical reproduction rights from performance rights. When a CD is made it is governed by the mechanical rights. A radio or Internet broadcast is a performance right. The labels take 100% of the mechanical rights and the composers get 100% of the performance rights. Doing the split this way means that the composers don't have to trust the labels to honestly report their sales.
That is why the recording industry does not want Internet radio, p2P or the rest, they don't own the rights. The real point of the Hollings bill (what is it called this week? DALEK?) is that once the vehicle is on its way an ammendment will be slipped in behind closed doors to steal the performance rights from the composers.
This situation is a bit like the situation in Israel, Shaorn would like peace but he cannot resist the temptation to appropriate the Palestinian's property for settlements. Then when the inevitable attrocity happens they go asking for sympathy. In the same way the RIAA is scared stiff of the threat of piracy but it just can't resist the temptation to loot, just as they could not resist the temptation to steal artist's recovered rights in the DMCA. But when Napster or Bearshare comes along the threat to private property is soooo desperate that immediate legislation is required to force all PCs to be tricked up with DRM within 24 hours.
Ultimately I think we will see radio displaced by Internet Radio and Satelite Radio. The cost advantages of addressing a larger market are devastating. The real problems are lack of the right standards for distribution and the lack of appropriate hardware. I don't want to tie up my PC with Internet radio, nor do I want to have to lug a PC with me just for radio. I want my Internet radio device to connect to my home network via WiFi and play any station I might want to listen to, or play from my (ripped) CD collection on the main server.
Looking for an Information Security student project suggestion?
Try http://dotcrimeManifesto.com/
exec #1: Boy, who would have thought our payola efforts would have come back to haunt us like this?
exec #2: Not me! Sure miss the old days when a smaller amount of our billions bought way more influence.
exec #1: This whole consolidated radio network thing stinks. I wish we could just get rid of radio.
exec #2: But we NEED radio to keep distributing free music so people will want to buy CDs!
exec #1: I know. I just can't get around that. If only there were some other avenue for distributing our music freely so that people could listen to it and decide they want to buy it.
[silence]
exec #2: Well, the good news is that we've managed to successfully shut down Napster and some of its ilk. At least we'll have more money from those sales we would have lost to make the payola!
exec #1: Maybe we could sue Clear Channel, or lobby congress for a new law that would favor us! You're brilliant, #2!
Libertarianism is rich wolves and poor sheep playing gambler's ruin for dinner.
Hey, Mr. DJ, I Thought You Said We Had a Deal:
I could never sleep my way to the top
'Cause my alarm clock always wakes me right up
And since my options had been whittled away
I struck a bargain with my radio DJ
I said I'd like this song to be number one
He said "I'd really really like to help you my son"
And then I knew that I would have him to thank
Because he asked me how much I had in the bank
He said to think long term investment and
That all the others had forgiven themselves
He said the net reward would justify
The colossal mess they'd made of their lives
He said the record wouldn't have to be hot
And no one ever seemed to care if it's not
It would depend on something else that I've got
And that the other ones who'd given it a shot
Had seen a modest sum grow geometrically
And then they had forgiven themselves
Because the net reward had justified
The colossal mess they'd made of their lives*
Hey Mr. DJ, I thought you said we had a deal
I thought you said, "You scratch my back and I'll scratch your record"
And I thought you said we had a deal
Well, I told you about the world (its address)
I wonder when they're gonna clean up the mess
You know the rabid child is still tuning in
Chess piece face's patience must be wearing thin
Because they haven't played this song on the air
Not that anyone but me even cared
And the Disk Jockey has moved out of town
The district courthouse says he's nowhere to be found
He said to think long term investment and
That all the others had forgiven themselves
He said the net reward would justify
The colossal mess they'd made of their lives
Hey Mr. DJ, I thought you said we had a deal
I thought you said, "You scratch my back and I'll scratch your record"
And I thought you said we had a deal
In Capitalist America, bank robs you!
...why don't you people observe that while radio *ownership* was deregulated, radio *broadcasting* is as tightly controlled as ever.
Setting up a local FM radio station has been cheaper for the last 15 years than most internet-based radio today. I broadcasted pirate FM radio in junior high-school using a rig that cost me less than $100.
Why can four companies control 60% of the radio market? Because the FCC has established extremely high barriers to entry. So new radio stations require investments of millions of dollars. Withour regulation on ownership, but with high barriers to entry, oligopoly is inevitable. It's microeconomics 102.
'Net radio and sat radio are good paths out, but we could also see significant improvements in radio diversity by simply allowing localized homesteading of frequencies without "broadcast purchase" policies taken by the FCC now.
Imagine an open-ended cooperative of home-based rebroadcast stations on an FM frequency that relayed an internet radio station. Imagine being able to tune your home broadcast station to a 'net radio source for 20 hours a day, then come home and do your own show.
Before people start screaming for "trust-busting" of Clear Channel, how about screaming for deregulation of frequency allocation? I'd love to see how long the payola scheme would last in a world of nerds with $100 FM broadcast stations doing a relay of Radio Free Slashdot.
It's the bands who are being screwed, not the RIAA. Any promotional costs are charged back to the artists, against their royalties.
wouldn't the broadcaster still being paying all those rights to ASCAP, BMI etc? That'd be the back breaker for me. IF you're going to do the "pirate" radio (we have one here) I guess you're not paying the fees, but I guarantee that Powell won't let anybody on the air without paying mucho bucks to somebody.
The general sentiment regarding FM radio these days seems to be: it sucks.
With radio stations having to pay an increasingly large fee for each song on the playlist, it's no wonder that they play a much smaller selection of songs than they used to (say, back in the 80s).
Clear Channel claims (paraphrasing) "We're just playing what people want to hear". However, there are several really interesting side-results of these shrinking playlists.
First, we have to lay down some facts. The first is that fewer people are listening to the radio, period. The second is that for those who do listen to the radio, they are listening for shorter and shorter periods.
Now let's assume you're a casual radio listener as most people are. What kinds of songs are you going to request most? Probably the ones you've been hearing recently that you like. No diversity in songplay equals everybody requesting the same thing, and everybody requesting the same thing means radio stations play the same crap over and over again (which is fine by them, since they don't have to pay out extra cash for more songs on their playlist). In a sense, it's cyclic: people request what they know, and stations play what they request.
From one perspective, Clear Channel is correct when they say they are playing what people want to hear. But that's taking a small picture view, because when taken in a larger context the statistics really are supporting the fact that people don't want to hear the radio at all! Ask any radio listener what the biggest problem with radio today and he'll tell you lack of variety. Thus, the sucking. And the more sucking there is, the fewer people will listen.
Here's another interesting thing that I haven't seen discussed: How this affects CD sales. Let's consider 2 scenarios. In scenario A, the radio station is playing 60 tunes in regular rotation and a few classics, and replace songs in rotation at the rate of 10 per week. In scenario B, the radio station is playing 30 tunes in regular rotation, plus a few classics and replace songs in the rotation at the rate of 2 per week. Which station is going to generate more CD sales?
Let's assume (for the sake of simplicity) that each station has exactly 1000 listeners. Each listener has a 1/10 chance of liking a song enough to buy a CD. Each listener is also going to listen for 120 songs in week 1, and 120 songs in week 2.
The people listening to station B hear each song 4 times during each week. They are exposed to 32 songs (30 from week 1, plus the extra 2 rotated in during week 2), and buy an average of 3.2 CDs due to this. 3.2 * 1000 = 3200 CDs sold.
The people listening to station A hear each song twice during each week. They are exposed to 70 songs, and buy an average of 7 CDs due to this. 7 * 1000 = 7000 CDs sold.
This, of course, is a very simplified case, as it doesn't take into account disposable income, but neither does it take into account song burnout (when you like a song but are so sick of it you never want to hear it again), but I think it makes it's point. Oh, and in case you didn't get it, radio stations today are like station B.
As a result the music labels complain that people aren't buying music and point their fingers at Napster, I don't buy it as the sole reason. I point my finger at station B and say "people are listening to the radio less than ever and being exposed to less music than ever. What did you expect!?"
Basically, as long as its legal, the Top 40 will be bought and sold. Not that the abolishment of the practice will get good artists like Liquid Tension Experiment on the chart; the radio demands a certain format to pay for itself.
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