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April 22, 2005

Payola

A classic post from Lockjaw's Xanga Page

While reading Marginal Revolution, I was goosed to write on Payola. MR linked to a John Mellencamp interview snippet in which he discussed the issue. The original interview was on Salon, but who reads Salon, anyway?

Payola is the term used when record companies pay radio stations fees to put certain songs into rotation. If the record company had a new artist that they wanted to push toward stardom, they simply paid the radio station a fee, and the station played the song. It was a simple system, and it worked very well for both the stations and the record companies.

As with any good market system, somebody (Congress) decided that it was unfair to the artists who couldn't afford to pay the fee, and started forcing changes on the radio stations.

Now, I have some familiarity with the radio business. The program directors for radio stations get a LOT of new music sent to them each week. Assuming that each song sent to the station for consideration as a new single is 3 minutes long, and that the station receives a mere 10 singles per day, you can easily have two and a half hours of work time eaten up per week just to listen to new music. 25 singles per day, and you've blown a full workday just to listen to new music. One way that program directors gets around this time problem is that they don't even listen to the songs. Often, a PD will give a song 5-15 seconds to catch their ear, or they'll toss it away. Priority is given to established stars and singles with major support from the labels. Major support from the labels means letters, emails and phone calls from the labels, which eats up a lot more than 3 minutes of time.

What is a program director to do?

Payola was one answer to that question. If a record company was willing to spend $200 to have their single put on medium to heavy rotation for a week, the station could not only have a good chance of airing what would be a hit, but could also make some back-end money on the deal.

Payola allowed the PD to put the single at the top of the stack of songs to review for airplay. Since the record company was writing a check, it didn't take multiple phone calls, letters and emails to determine if the record label was giving the song major support. They were. Half of the Program Director's job was done for that single, before he ever heard a single measure.

For the record label, getting airplay for a song was as simple as knowing the asking price for a select number of major radio stations, and putting those numbers into the ad budget. Airplay automatically meant money for the artist in question, obviously.

What if the song stunk? What if a record label was offering money to air a horrible load of stink, and the program director knew it? Quite simply, the Program Director turned the money down. The first job of a PD is to create a product. That product is the many ears of the listeners. If the PD programs a station that plays bad music, the listeners will go elsewhere. If listeners go elsewhere, the amount of money that can be charged for advertising must be reduced, or advertisers won't buy.

What if a song comes across the PD's desk that's perfect for the station, but there's no payment for play? The PD puts the song in rotation. Again, the job of the PD is to get listeners for the station, so the advertising department can sell ads. Good songs mean people listen.

What about that middle road? What about the songs that are good enough, are backed by payola, but for some reason never catch on. You've got a record label paying for the first week, but nobody seems to notice the song. The second week, the label is still paying, but the listeners still don't care. The third week, that song will be tossed into the stinker pile, and the station simply doesn't cash the check for the third week. Payola money isn't where the big bucks are, and advertising is.

That pretty much leaves one group. What about the artists who don't have enough support from the label for the label to pay for play? Those artists have two choices. They can either pony up the payola money out of pocket or they can make good enough music that payola isn't necessary. If they can't do either of those things, then they may just fail to get noticed.

Sidebar time. What are the odds of a new song getting added to rotation, with payola taken out of the equasion? Let's go back to our basic assumptions. We've got 50-250 new singles arriving on the program director's desk per week, at 3 minutes per song. Without commercials, announcements or any other interruption, 20 songs can be played per hour. That's 480 songs per day. Of those 20, 3 will be played once every two hours. Another 5 will be played every 4 hours. Another 8 will be played twice a day. That leaves 318 song slots per day to be filled with other songs.

Ever listened to pop radio? They're not commercial free. In fact, some stations fill almost half of their time with advertisements. Now, that 480 total slots we started with per day has become 240, and the available slots after repetition becomes 168. That 168 is filled, primarily, with songs from the current top 40, older top 40 songs and the like. Then we have morning drive talk, song announcements, traffic and weather. That 168 has now become 100. Out of that 100 slots, the PD will probably fill 5-10, at most, with new songs from that pile on his desk. Those songs will be chosen on a weekly basis. This means that out of 50-250 songs the PD receives each week, he'll probably never choose 5 to be added to the rotation each week that aren't sure to be hits.

The job of the record labels, when dealing with the radio stations, is to get their artists into that short list of 5 songs selected each week. If your band can't get into that short list of 5, too bad. If you can, chances are you'll make money.

Simply put, payola is a useful tool in the music business to ensure that those artists who receive heavy investment from the record labels get the airplay that the labels think they deserve. In that regard, it is a good thing. Likewise, those who don't receive the benefits of the payola system are thrust into the heartless hands of Program Directors around the country to sink or swim based on the whims of individuals. Without payola, the PD must rely on other, less efficient methods of determining which songs are sure hits, and those other bands will STILL be focused on the whims of the PD.

Count me as one who thinks payola is a good thing.

Now, if you've ever heard the song "I Can Only Image" by the band Mercy Me, you'll understand when I say that all it takes is a great song, and no payola system or back-end corruption can overcome the urge for Program Directors to provide good radio. Listeners to a Dallas pop radio station called and repeatedly requested that the song be played. The morning "zoo" type show knew the song wouldn't fit in, and with repeated mentions of Jesus and an overt christian theme, it wasn't the stuff of pop radio. One day, they decided to play the song as a joke, and actually joked as they played it. Listeners responded, however, and kept requesting the song. Next thing you know, the song is picked up by other stations, and pretty soon EVERYBODY has heard it. It's broken the top 20 on the Adult Contemporary chats, and the top 40 on the pop charts. I've heard the song on country stations, as well. That's with no payola, no major label support to the pop stations, and with most of the Program Directors having not decided to play the song within a year of its release.

Payola is a useful tool, yes. An even better tool, though, is just good music. These days, good music is rare on the radio.

Posted by Lockjaw at April 22, 2005 11:35 AM

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