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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.")
What is this "beach" you speak of? It sounds suspiciously like something that involves "fresh air" and "natural light".
"More organs means more human." - Zim
I'd launch a single for them for $1000. My only over head would be the disc, the duct tape, and the Estes Rocket.
In another shocking story, the *sun rose in the east* this morning....
In Soviet Russia, Chuck Norris will still kick your ass.
In the index, of course.
Best Slashdot Co
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
They pay Clear Channel, yet shut down SomaFM for not paying more than they already do.
sulli
RTFJ.
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 sure exactly how the whole satellite radio thing works but don't they have their own radio stations for satellite radio (i.e., Clear Channel-free) with their own disc jockey's and whatnot? If so, I wonder how the payola involved in satellite radio compares with that of FM radio.
As with the sun's light
My mom was magnificent
Unquestionable
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.
yes, but the internet is bad. the internet means piracy, which means profits go down. at least that is the 'company line'.
actually the real reason is the record companies like the CONTROL they have over radio. sure, it costs them money to pay off clear channel, but the record companies really choose who gets played by paying the big bucks -- it's a high cost of entry and they are the only ones with the money. in turn, they strangle the artists by saying "do what we want or we won't have you played. sign our contracts or we won't have you played and you'll never become anything." since (at least before the recent LoC levy on internet broadcasts) the cost barrier to the internet broadcast was very very low, they were afraid of this.
the real reason the record companies wanted the prices higher was to regain the effectual control of the medium by raising the cost of entry to a price only they could afford. either that, or they wanted it so high, that no one could afford it.
i actually really believe that the record companies are getting ready to deliver their own internet broadcasts -- and this will be at no cost to them as they do not have to pay their own copyright fees.
-rp
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
Because the airwaves are publically owned and therefore the usage of them needs to be regulated. The spectrum is limited, and the FCC is granting a natural monopoly of sorts to each broadcaster in each region on a specific frequency. As competition is inherently limited, and the airwaves are in the end owned by the people, the FCC damn well better be regulating the market.
Would you want every commercial radio station gathering together and agreeing only to play paid advertisements and no music? Well, they can't do that under law (broadcast TV and radio have max times for advertising breaks... although this is often circumvented with a "You're watching XXX... which will be back shortly" message, that's besides the point) and that's a good thing. Payola should be limited in a similar fashion because I shouldn't be forced to listen to music that a record company wants me to listen to on *my* airwaves.
As for enforcing payola laws, do so only if you do it unilaterally. We don't need to make a 21st century Alan Freed.
-bugg
Since I couldn't get this story submitted (too much Microsoft crap to fight through, apparently), this seems like a good place to pass on the story: Cuban says Yahoo!'s RIAA deal was designed to stifle competition
Mark Cuban:
As originally seen at: http://www.dnalounge.com/backstage/log/2002/06.htm l#24-jun-2002, although JWZ seems to have taken down that news post at the moment (?).
P.S. Does anyone else who lost moderator access on the Thread of Doom find that they can't get any stories submitted any more, or is it just me? I'm beginning to cultivate a healthy persecution complex :)
Your right to not believe: Americans United for Separation of Church and
Hilarious. Payola used to at least buy you a hit. Now all it does is get your foot in the door. For a quarter-mil you buy the chance to have a hit. At least Alan Freed gave you an honest hit for your money.
A fight between the 800 pound gorillas and the public suffers.
/. geek would love this station merely for the technical expertise that Bill Goldsmith pulled off when he set this up.
You could launch a record and get it played on the radio for cheaper but it won't be on Clear Channel. Clear Channel does all kinds of evil stuff besides that, like piping in remote DJs and making you think they are local.
This sort of battle was inevitable when the FCC lifted regulations on radio ownership.
The solution for you, the public might be to try to patronize stations that are not conglomerate owned.
I DO listen to one radio station that is both terrestrial and internet streaming: 97X out of Oxford Ohio. Here's some of the NEW stuff I'm enjoying..
Elvis Costello
Hives
Cornershop
Idelwild
Girls Against Boys
The complete playlist is here
Great music that is bucking the current cock-rock trend of Linkin Park, System of a Down, Korn, etc. being offered by local Washington DC suck ass radio in the form of WHFS and it's "Most Played" list. (It's not Clear Channel, It's CBS, just as bad)
Then there's Radio Paradise.
Any
Just boycott Clear Channel. Turn it off.....
You needn't follow the flock is you refuse to be part of it.
Payola distorts the system. It makes it harder for the public to hear what it wants to hear. Payola is also illegal; that's helps explain why people "jump to the conclusion" that it's a bad thing. Incentives for distribution of music (sales incentives, advertising deals with music stores, etc.) are not illegal, because music sales aren't regulated in the same way.
#include IANAL.h
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?
Link - Online Tonight
"It is a greater offense to steal men's labor, than their clothes"
A payola-free system is inherently unstable, it relies on the record companies to simply never offer payola to a radio station. A payola-free system is better for the whole music industry. So why don't we have this better payola-free system?
The incentive is huge to be the first to start offering payola to radio stations in a payola-free system.
That is where legislation might not be a bad thing, it can stabilize a payola-free system by creating strong disincentives to offering payola.
An alternative however might be for labels to forbid stations from playing their music if the station accepts payola... but that takes guts. Still, the labels are not as powerless as the article indicates.
(I don't think the above is a troll, I don't know why it got modded down)
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/
Would you want every commercial radio station gathering together and agreeing only to play paid advertisements and no music?
Think about what an absurd statement that is. The whole point of advertising is for people to listen. You seem to think they if they could, they would be able to sell all 24 hours of radio time to advertisers. How much do you think they would sell if nobody listened?
Payola should be limited in a similar fashion because I shouldn't be forced to listen to music that a record company wants me to listen to on *my* airwaves.
But you're not "forced" to listen to anything. Maybe I just don't have the correct "entitlement" attitude, but I just don't care what is put on "my" airwaves. If there is something worth listening to, I listen. If there isn't, I don't and do something else.
If people would just stop bitching and turn off the radio when you don't like the music, then all this will stop.
Sometimes it's best to just let stupid people be stupid.
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.
I have an article on the same topic submitted but undecided upon - and from the way I read things, there's some other shady business practices happening in addition to the things you mentioned -- Cuban goes on to state that he had worked with Yahoo to undercut the royalty payout as well by using multicasting and then only paying royalties based on the single stream being broadcast, and forcing those webcasters who needed percentage-of-revenue rates to subsist and were bound and determined to stay on the air to pay fees to Yahoo to have their material broadcast.
This whole mess just reeks of Mafia boss tactics. You pay us a "protection" fee, and we'll make sure your bandwidth doesn't get cut off.
Oh, and for a good read on the whole "media control" thing, check out The Media Monopoly by Ben Bagdikian. It was written in the 80s, but has been updated since to include new mediums of communication. Very interesting read.
--
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!
It's the bands who are being screwed, not the RIAA. Any promotional costs are charged back to the artists, against their royalties.
from M4 Radio: all indie music all the time
Q: What is Indie Music?
A: Any band or a style of music that is either not yet signed to a major music company or if they are signed to a small independent label.
"Facts are meaningless. You could use facts to prove anything that's even remotely true." - Homer Simpson
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.
Of course, doing so would allow consumers to make independent judgements on what they like, and why certain songs are being played. So I guess we can't have that!
sPh
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!?"