Elizabeth Grattan

Another broadcast panel debate regarding royalties and the balance between artist/label and radio station.

Read on…

Participants
My Input

Station owner Rick Murphy started the discussion with the thought that the balance is off:

Remember when radio could secretly charge musicians to play their music. Alan Freed made it popular and profitable. That is when record companies and artists thought radio had value. Maybe they still do; just that the Feds have made the practice illegal. Now, because the current model no longer works, they want radio stations to pay for the right to promote and build reputational currency for their creations by charging RIAA, ASCAP, BMI and ASCAP fees. Radio stations pay hefty annual FCC spectrum fees and have the legal right to play whatever they want. Soon we will choose to play royalty free music from China and Brazil. Think about the billions (not zero) of dollars of celebrity and credibility that these foreigners will receive from free radio. Musicians/record companies need to look for other ways to derive revenue instead of killing the golden goose…Radio! Music will be free soon enough in much the same way that record companies, travel agents and movie rental stores are dropping like flies.

Eric Stevens agreed:

Rick,

This is one time I can get behind what you’re saying 100%. After all, advertisers have to pay for their radio exposure, so why not the artists? Same should hold true for ‘net radio too, don’t you think?

I didn’t:

Except that without the songs, there is zero content.

It is a balance. Sometimes off balance, but a balance no less. And sometimes artists can do this still, by purchasing the avail with disclosure. But a station will lose all integrity if it goes back to pay for play.

Not only that, you’ll alienate the audience, because programming isn’t about which artists have the cash to get their song spun, it is about what the target demo wants to hear.

Eric added some Ad Hominem (those are omitted from this entry) and then went on in an attempt to illustrate his point:

It would have to be from the record companies, based on a few cents per play (and play would have to be verified. So an abacus just won’t work…) and could be based on the ‘pay to play’ plan they’re trying to impose on the radio stations. Popularity of a song in reverse, would determine the amount of pay per song. When it falls off the charts, so does the required payment. But of course, you know everything about that too, just like everything else, right?

My reply:

Eric, a tip: Ad Hom is not an argument.

Your suggestion in no way includes the listener.

If you think “charts” have anything to do with the listener, you show your lack of knowledge of how programming actually works. Charts reflect the airplay, not the research. If a song moves up in rank in the charts, that is because the station’s audience showed interest in more spins AND that the station cared enough to report it. (some don’t even find it worth their time).

Your strategy suggests that programming be dictated by record companies and artists rather than the audience. And is problematic not only because you don’t seem to understand what charts are representing (they really are not that relevant to anyone but the label/artist – charts are basically just gold stars and kudos – they have no real significance to the station/listener at all.), but you are ignoring the target demo. In doing that, you lose the advertising revenue.

Go ahead and experiment and see how long you can sustain a station based on only payment from labels. Because that is exactly where you will be.

Eric chose not to address his correction about a chart system and moved his attention to legislation:

Rick,

Did you happen to see the legislation involved with this. I tried looking it up a few months back but didn’t find much if any, information on it. Guess it was still new at the time and haven’t thought much about it since. Any chance you have the docket number? I’d like to find it and read it.

Regardless, I do agree with your assessment, especially when it comes to fees for broadcasters. Seems like we’re paying enough as it is, but here’s the problem all Americans face today (and probably has for decades) and that’s with getting your legislators to pay any attention to what anyone has to say about their proposed legislation. I can only speak from personal experience, but recently I wrote both of my congressmen and I received but one answer. And when I got that, it was completely unrelated to the topic at hand. It wasn’t even close.

Question is, is there enough time to get organized and rally against the idea before the legislation gets passed? I’m also under the impression they did it to Internet radio already, which kind of sets the precedent for broadcasters. I think you know as well as I do that Congress will make that a selling point since ‘it already works for Internet radio’.

If we don’t start responding before the bill comes before the House and Senate (if it hasn’t already), it’ll most likely get passed and once again and as we Americans tend to do, we’ll end up being more reactionary than pro-active.

My reply:

Once again,

This isn’t about legislation. It is about whether or not a station has content that considers the listener or not.

Suggesting pay to play means that content is dependent not on what the listener wants, but what a label or artist has to spend. That isn’t radio.

Michael Klein joined us:

I don’t know of any business that is guranteed a return on their investment. It seems that a record company releases a song, and is paid simply because the song was played somewhere. Not because the song sold a record, but because it was played. To me, unless the song is played at least once, it is never heard. Does that sell records?

In the early days of radio, before recorded audio was permitted to be broadcast, radio drama was king content. Music was provided by a studio band/orchestra, and was paid by the station as an “employee”. Voice actors ruled the airwaves instead of a record company’s music chart.

If an automaker designs a car for the general public to enjoy, the company doesn’t get paid every time a picture of that car is shown – only when it sells a car. Same should hold true for any business. Record companies hire what is essentially a talent scout to find new artists and music. They get paid for what their tastes bring to the table. The record company gambles on that new artist that the public will receive the offering. If their choice is off, why should they still get paid?

While several marketing methods are used by the record companies, radio has always been THE tool used in music promotion. How else do you get the consumer to hear a track (not the whole album) and then buy the product to hear the rest? Maybe I’m prejudiced, but it would seem that the record companies would depend on radio more than any other medium.

On the other hand, paying radio to play the music is not the answer either. Today’s radio depends on the new releases to keep up with “Station B” across town. Content is what makes the station popular, and if the music gets old, so do the listeners. But if a station received “X” amount to play one song, and “Y” amount for another, one song would get played more than the other. We’re all honest broadcasters, but after all, it’s the bottom line that keeps us on the air.

The answer has to be ultimately with the listener. In the days before automation, DJ’s actually took listener phone calls, requests, comments and so forth – involving the listening audience – connecting with them. Depending on what that listener said about a song, how many times it was requested, and so forth, that’s how early music became popular, and how the first music charts were compiled. New music wasn’t rammed into the ear 20 times in a 24 hour period, and there was more variety in the music that was aired.

Whether Internet or terrestrial radio, I believe if the record companies operated like any other business and made their income from record sales, concerts, T-Shirts, mp3 downloads, ball caps, stickers, etc. – and quit taxing the bloodline that fules the frenzy, everyone would be happy.

My reply:

Spinning a song once isn’t going to make much of a difference. I think the misconception is that radio is what is going to be the bread and butter for an artist. That really has never been the way it is. Selling the music via concert venue, clubs, shows, etc… that gets the fan base going. And itunes and other sites now allow artists to get their songs heard and played for. Radio gives a band exposure in exchange for content. Relying on a station’s playlist to garner wages is naive on the part of the artist.

To hear it called “the tool” for promotion isn’t too much of a stretch, but again, that is a grand mistake for an artist to make. They *shouldn’t* only be relying on radio as the medium, especially not this day an age.

So yes, I agree with you that record companies and artists need to stop thinking of this amazing microphone as being all they need. Work it. Earn it.

As to content getting old, not really. It’s about whether or not a song is a hit. Currents do not dominate a playlist. Golds do. Times have not changed that truth. Listeners want to hear what they know and love, not what is new. In fact, listeners (especially women who make up most of the music radio demo) will pick familiar songs they simply tolerate before they will desire something unfamiliar. New music is a risk for a station and this is why conversions are a thing of yesterday – because artists are back to having to prove the single, not just their brand.

Automation has not alienated the listener. Requests never represented the whole of the audience, let alone the P1. It is a myth that requests are good for playlists. Most people do not call radio stations, let alone call in a request. And programming a station based on those calls is anecdotal and just bad policy all the way around. As to taking feedback, that’s done these days through better research than the anecdotal dj days of old. – Besides, a heck of a lot of pay for play passed off as “request” was going on. Instead of a cash dollar, it was often a line or so…

Just because automation makes the process simpler and gives programming a better edge, doesn’t mean the listener is not getting the best, or a variety – in fact, they are getting MORE of that with automation available to PDs. Because now we have the ability to set genre, tempo, artist, mood, beat, etc… – to get a better flow out of that radio.

And new music is not played 20 times in 24 hours. Most currents will be spinning every two hours, at best. Hit stations may increase that rotation a bit, but 2 hours is pretty typical for current spins (which is really no different than when Top 40 was just in fact 40). – That’s about 12 times a day, not 20, depending on the format. And the reason for the frequency in spin is again, based on testing the strength of the song and getting listeners familiar with it – but mostly because – listeners want to hear WHAT THEY WANT WHEN THEY WANT IT. (caps for emphasis).

Given that TSL is limited (even passive at work), it is essential that the station be playing the song desired when their target is listening. Heavy rotation ensures this. Because that scan button is searching for that song. If it isn’t on, but your competition has it, you lose them. That isn’t so much shoving the song in the listener’s ear – it is giving the listener what they want to hear.

But yes, you are right… paying radio to play the music is just a bad idea – because then it stops being programming.

Rick again:

OK Elizabeth. You are one of the most prolific writers I have encountered and you clearly know your trade. But, let’s see how good you really are! I would like to see you argue the other side. I mean, truly, the other side! Somehow, I think you can do that more convincingly than I ever could! Back to you!

My reply:

Ha. Well Rick, I don’t think your side is a valid argument, way too many fallacies in it to sustain the premises… however, I think that a proposition that could be made simply comes back to what is already in place: promotional gear and advertising avails. In addition to free concerts and artist showcases for P1s. Labels and artists ought to be servicing the station and their audiences in these same ways, but even stronger.

And a label can utilize the advertising already in rotation at the station. Use :20 to spotlight your artist in a stop set where that single is coming up in rotation. Provide the station with product and better concepts for contests. Fly the listener out to L.A. for a private show. Heck, come to the city and offer a back yard BBQ.

Point being, labels and artists are already offering payment to stations in the form of promotion and product and *experiences* that the station can’t offer alone. But because we don’t see those values in the bottom line, we pretend they cost nothing. The reality is, they are listed in the label’s budget. We just often times forget that.

Sorry it wasn’t your argument. But again, the context is *programming* and so, any argument that suggests pay to play will be riddled with fallacies in reasoning.

Rick:

I am not sure where we go off on programming. My initial comment was about economics?

My reply:

Rick,

Because you are talking about radio programming whenever you are talking about the playlist and how music gets on it.

A bit more Ad Hom from Eric and then Rick again:

I can take it. Elizabeth is very very smart and she will wake up in her sleep and realize that there IS another side to this argument and she is just the one to make it.

1. That soon, the record companies, who have unsuccessfully tried to kill the golden goose will embrace radio instead of encouraging us to play royalty free music from Brazil and China. ( Before you respond to this Eliz, read FREE by Chris Anderson)

2. That radio will find a way to survive even without the current model pushed by record companies.

3. That artist will come to us direct and appreciate the free publicity for their art.

4. That the record companies have worse problems than getting attention.

5. That artist will soon (like in China) discover that we are doing nothing more than giving them free publicity, celebrity and credibility allowing them to have successful concerts and additional money from commercials and ring tones. Who here gets the reputational currency delivered by radio. Not radio! we simply deliver an audience and then, like Google, monetize it.

Everyone here needs to remember why BMI was formed.

Sleep tight!

My response:

Rick,

I am not sleeping.

Your premises are totally loaded. First of all, the record companies are not attempting to kill the golden goose. That’s an assumption you are making based on bias. There is a strong argument FOR the royalties. After all, they are providing radio stations with their content. I certainly must pay for the rights to play the songs I want to, a station should be no exception. In fact, the argument could be made that they are even allowed to distribute at their leisure as well, a right I do not personally have. Remember, you don’t “own” the music. Just the right to play it.

Artists already do go to stations directly. Labels give artists more credibility. No different than any other agency – or better yet – bank. The label is the one who has put up the money investing in the artist. Not all artists opt for this route. But that isn’t to say that route is a bad one to take. All depends on the artist and their own goals. But radio is never restricted to only spinning what comes from labels. So that point isn’t even relevant.

Record companies have their own problems based on distribution. That isn’t relevant either.

Artists KNOW as I stated above, that stations are nothing without their content. It is a balance, as it has always been. And the publicity isn’t free. Every single time a song is chosen to spin, another is swapped from the playlist. It costs the artist and the station to go from a melody in the mind to a song being heard on a long drive.

Your argument again is completely without objective premises. You have forgotten the trades being made. Sure, radio stations offer artists great exposure IN EXCHANGE FOR CONTENT.

And you also present a false dilemma argument. There is no reason at all why artists can’t continue to offer content to stations AND also work to make income other ways. As I said earlier, it is a myth that radio is the only vehicle for artists.

You keep pretending radio gets nothing out of this deal. Without the music, you have nothing to program.

Rick:

I may be crazy here…but, you said 4 times that I don’t have a point yet you really didn’t give a VALID counterpoint. Or did you and I am too dense to get it? Not going to compromise on this?

My reply:

What I said is that your argument lacks a valid premise. And so, a lot of the argument just unravels. I rejected your premise that the artists and labels get exposure, etc. for “free”. It’s incorrect. I also rejected your premise that labels are trying to kill a golden goose.

In other words, your entire argument is based on the incorrect premise that there is no trade taking place between the artist/label and station. The only counter argument I need to make is on that. And I did.

Rick:

I still want you to take an honest look at the other side. I can’t not pretend to be so knowledgeable that I can say the your points are invalid. I would like you to do a better job of validating them and truly looking at what the future holds for these dinosaurs. I happen to know that you can effectively look at both sides of an issue. I am just waiting.

My reply:

Rick,

You are asking me to argue a point based on an incorrect, not valid premise. I’m not sure why you aren’t getting that yet? You keep suggesting there is another side, and I am telling you that you are basing that on the incorrect statement that radio is offering all this “for free” and that labels are giving nothing to radio. It is *not* true.

I don’t know how you want me to validate my argument more. It’s pretty clear in what I stated.

Artists/Labels give content. Radio gives exposure. That’s the trade. Until you acknowledge that is an equal exchange (even if you feel that it might be slightly leaning towards one or the other at times) you will have no argument that works.

You suggest that artists start paying stations. That presumes that they aren’t now. And again, that is incorrect. They are paying with content. You presume that the legislation and royalties are unfair. And yet, royalties are par for the course whenever you are dealing with distribution of someone else’s works.

In other words: you are asking me to make an argument for you that is fallacious and not based on logic or reason. That, I will not do.

Rick:

At last. It is a fair and balanced exchange! Can we then agree that neither party should pay the other one?

My reply:

No. Because as I said, the station does not own the music.

And again, artists/labels provide more than just content to stations through promotion, product and other costs.

Both parties ARE paying each other.

Rick:

Semantics.

My reply:

No, not semantics.

Again: take away the music and you have zero content for programming. If you opt for different music that you won’t be paying royalties on, you still have to please your listener. And if your target wants to hear a song an artist has produced that costs your station a royalty to distribute… you better give it to them. Because if you don’t, you will lose that listener and there goes the revenue from advertisers and if that happens, there goes your station.

Trust me, when radio stations cry foul because of royalties, I don’t have a ton of sympathy at all. There just is no argument for penalizing an artist or label (or songwriter for that matter) by denying them their due when they have in essence created the entire content for the station. And in allowing that distribution, given a station a profitable business – where an owner can garner revenues through advertisers that are after their new found audience.

Rick:

I love the artist and want to promote his/her wares. Just want to do so without being shat upon. I am truly surprised that you are not allowing yourself to look at the entire picture. Is there something I need to know about you and some prejudice? You can do this. It is hard, but I think you can argue either side. In fact, I know you can. Let’s see it now!

My reply:

Rick,

You aren’t being shit upon. And actually, I am looking at the entire picture. More so than one who comes in with the loaded premise that ignores the fact that you *need* the artist – more than the artist needs you. Because your content is dependent on the music. There is no way around that. They are *not* dependent on you. Whether you accept that or not, it is the reality.

If there is any bias here, it is coming from you. Again, my argument isn’t based on incorrect premises, yours is. I’d appreciate the acknowledgment of this fact and an end to the very patronizing suggestion that I’ve not met my burden in showing you your fallacious reasoning.

I might suggest, that your statement “I love the artist and want to promote his/her wares” is the kind of statement that instantly highlights your lack of objectivity. It is a statement that illustrates your position (and an incorrect one) that you are doing the artist some sort of favor.

You think paying royalties is being shit on. And yet, you have yet to illustrate how that premise even works in light of the fact that a station gets massive distribution rights and some. A station also reaps benefits and profits with huge revenues from advertisers based upon that distribution. None of those advertising revenues kick back to the artist/label. In other words, you are banking on the backs of the artists who are providing you the very source of your revenue stream. And you are bitching about being shit on because you have to pay a royalty?

If I asked you to produce content for me and then generated a revenue stream through distribution of said content – you’d expect to be paid. And you might even expect to be paid with something more than “well, I let people know about you”.

Again, it’s a balance. And in this chicken/egg argument, radio stations have forgotten that they did *not* come first.

Eric had some more thoughts:

Rick,

The performers need to go back the the licensing organizations (BMI, ASCAP, SESAC) that are already collecting fees, instead of the radio stations.

The performers could be getting their fair share of the royalties that already go to the writers and publishers, since if it wasn’t for a particular performer’s version of a song becoming popular through the exposure of free radio air play, they wouldn’t be receiving any type of royalty revenues at all.

Maybe BMI, ASCAP and SESAC would feel they need to increase their licensing fees a little, but I believe more of it it could be held in check much easier than what could happen if Congress gets their grubby little paws on it. As we’ve all seen, every time Congress seemingly does something ‘for broadcasting’s own good’, we all end up paying a lot more than it was really worth to begin with, in expenses, time, effort, bookkeeping, etc. At least with the licensing organizations, the framework is already in place and if it’s eventually forced to come about, stations might find themselves with a bit more bargaining power with the licensing organizations than they would have if they had to deal with Congressional mandates.

Maybe it’s time for the publishers and writers to own up their own responsibilities to the performers who created their revenue stream, by helping to make their songs popular in the first place.

And Rick:

To poorly paraphrase Clay Shirky, every revolution destroys the last thing before it turns a profit on a new thing.

Eric again:

Hmmmmm………….

Yeah, I can see the point. I’ll have to keep that in mind. I like it.

Looks as though the industry will be raising the advertising rates and/or cutting back even further on the staff to cover the additional costs. Been searching out more info on the ‘net and it’s looking as though the legislation may pass this time around.

May be time to search out the artists that’ll be willing to work out some type of ‘side deal’ to take a pass on the fees for the additional airplay. Maybe there’s some good indie’s out there too, who are also willing to ‘work something out’. (Looks like Billy Craig may yet have a chance after all, if he plays his cards right…..LOL) Failing that, there could be a lot of new Korean and Chinese artists who are about to become international stars. Or, some stations could just go to a talk format since some of them are operating marginally, anyway. (Something new to gripe about, I wonder….too much talk on radio, not that I don’t have some favorites in that genre.)

Got a feeling there’s going to be a lot more properties up for sale, and cheaply, too. Might as well kiss my on-air broadcasting career good-bye and just focus on engineering. Then again, maybe I could find a Saturday night, voluntary gig on a LPFM, just so I can have a few hours a week to ‘play at radio’. LPFM’s, college and the not-for-profits may end up the only ones playing music by the time this is over. (I’m sure it’s an exaggeration, but it may end up seeming to be that way….)

It’ll be interesting to see what happens in the short term and then in the long run. I think the topography could change quite a bit. We’ll just have to wait and see. It seems all so disheartening.

My reply:

“May be time to search out the artists that’ll be willing to work out some type of ‘side deal’ to take a pass on the fees for the additional airplay.”

Which is pay to play and illegal. And really horrid programming since it neglects the listener.

That you think radio is just “play” speaks volumes Eric. I’m not sure where you got the concept that it’s just about you and a studio and playing songs you want or from people who will pay you to play them… but that isn’t broadcasting.

Suggestion: Why don’t you just build a website and charge artists a fee for exposing their music there. It sounds perfect for you. You’ll get to “play dj” and you can even add some adwords and see how well you do.
1 day ago

More Ad Hom from Eric…
And then Bill Sepmeier joined in:

Wow. A flame war. A flame war over someone stating that it’s against federal law to play for pay on the public spectrum, since all advertising has to identified as such. That’s only been the law since .. 1934? I think there’s a 10% of “proceeds earned illegally” reward for turning in people who break federal law, unless they work for Goldman Sachs of course, and last I checked, GS isn’t into running unprofitable businesses, so they never got into radio directly .. so Eric, if you’re cutting side deals with artists, be sure you’re stating this on-air before each song, or you may have something to fear from the group’s membership, which includes a few FCC inspectors and a bunch of hungry radio people who’d take that 10% of your proceeds and happily use it to pay their own BMI/ASCAP fees.

As for music radio’s future? The money that could have been used to hire some talent back into this business; people who could entertain rather than say poopoo and peepee between 6-10am, was spent on the IBOC/HD scam by a lot of groups .. and the audience has moved on, to IP. We deliberately lowered content standards to the level of a multi-vehicle crash on the highway and made the decision to become a “background media” years ago. Now the noise floor’s risen enough to “mask” the background offered by music radio. Poopeepoopoo in the morning isn’t dragging ‘em in like it did for Randy back in the *80′s* … 12 in a row? 21 in a row? Who cares? Do you listen to your own station for the content?

With all of the Internet choices, wired or wireless, people get infinity in a row, and they can interact with the “radio” online, honing formats to their exact tastes. Broadcast music radio is a zombie, and if performance fees are the wooden stake, such is life. Maybe someone will pick up a bunch of dark FM stations at a reasonable stick price who has a clue about programming them in today’s world and revive the broadcast model. If you believe in the power of the market, it would be what to expect. (If only the failed but zombie banks would actually fail and people who knew how to be bankers could re-boot that business, eh?)

Poopoopeepee! Now here’s Sheila in a studio somewhere across the country with the “local” traffic, and after that, 120 in a row isn’t worth the electricity bill, to transmit or receive.

Eric again (his continued personal attacks were again omitted in this post as well:

Hi Bill,

Something’s lost in your interpretation of what I said in regard to stations having to pay for an artist’s on-air exposure when their recordings are played, in that an artist who wants to get additional airplay may choose to waive the fees on a portion, or all of their ‘performance rights’ fees, if they so choose. So, how can it be ‘pay for play’ if no money exchanges hands in either direction? And what laws are being broken if an artist chooses to say, “Yes, feel free to air my performances, free of charge?” It is after all, his personal work, isn’t it, and he should be allowed to do with it whatever he wishes. Then it just becomes, reciprocity. (I think you’ll see some of this taking place, because the artist knows that unless he gets the on-air exposure, he’s likely not to sell as many recordings. We’ll have to wait this one out and see how it plays out, of course.)

As far as paragraphs two and three of your comments, it’s funny you should bring IBOC up at this time, since I’ve been reading up a lot on it lately, as well as Radio Mondial, etc. and on those points, I happen to agree with you. Unless something happens, it may just all end up with the same results as AM stereo and yes, I do listen for content as well as the signal itself to make sure it’s behaving as it should. Of course, I’m one of those who doesn’t happen to think that radio needs to be dirty, to be good, but a good double entendre at the appropriate time, can be just as funny, if not more so.

My reply:

“in that an artist who wants to get additional airplay may choose to waive the fees on a portion” – how are you not seeing this obvious conflict? Additional airplay cannot even be an option in the discussion. In fact, airplay can’t be a motive at all. Or it is Payola. And illegal.

You call it reciprocity. Again: illegal. It isn’t a matter of whether Ben Franklin gets handed to a person or if swag hangs on a wall… no exchange can take place for airplay. Period.

Royalties are in no way tied to decisions to spin. Those are a completely different vein of the industry and they are paid based on distribution rights. Just as with any other creative work or content that is distributed through a venue.

As to the rest… more ad hom and totally irrelevant to the discussion.

More from Eric:

Bill,

I forgot something that’s taking place all the time and it’s completely, legal.
We almost left out the record company ‘agents’, who may pass on money (such as a credit card, loaded with cash) or some other type of swag to hang on the wall for the air-play adds. Then again, the management or staff can’t use it for personal gain, but at the same time, the ‘promotional considerations’ provided by these agents can really help to offset some of the promotional expenses.

From what I’ve been reading lately, a few of the ‘major players’ are taking in quite a few bucks from it all. Remember the phrase, “Promotional consideration provided by….”?
If that isn’t a form of ‘pay for play’, then what is?

Then Rick again:

Elizabeth, I am an expert on FCC law. There is a sponsorship identification law. It is simple. Just identify who is paying for the song or commercial and it is legal.

My reply:

Eric,

You are totally incorrect. If swag is given to a station or a PD in exchange for airplay it is Payola and illegal.

Often times, promotional items and the like are used in efforts to influence a LISTEN of a spin (when over a hundred singles hit the desk daily it makes sense that an agent or label would work hard to make their brand noticed) – this is no different than other marketing efforts used to pitch something. A pitch is not payment. Pitches are rejected all the time.

Often times as well, agents will set up dinners and such or bring an artist to town help sell the song or artist – this is a marketing effort again. It is a pitch. It in no way can be a factor on whether or not a song is selected for airplay.

Any station that spins a song IN EXCHANGE for swag or other packaging efforts by agents or labels is breaking the law.

Again: no exchange for airplay can take place.

Branding and marketing an artist or single and promoting them to others is not illegal.

Please learn the law. Your continued statements that suggest activities are legal that are not in fact legal at all are irresponsible and damaging to the industry.

Rick,

Eric is not talking about that. He is talking about “on the side”. We already discussed the law regarding full disclosure… Bill covered that nicely.

And I mentioned it early on in this discussion when we were talking about advertising avails.

Eric is talking about payola.

Then Bill:

As long as the audience is informed that promotional consideration has been paid, it’s legal. Play for Pay simply has to be disclosed; those 30 minute program length commercials for miracle vitamin supplements on the AM band all weekend come to mind. It’s another Goat Gland Saturday on the AM band now.

I agree with Elizabeth’s first point though … it’s not a programming method that will build an audience; while you might make some money at first if you could sell every song, your format would immediately become a joke. (Kind of like mortgage backed securities.) Take it one step further – set up a small studio where anyone can trundle in their instruments, stick a VISA card into a slot and get their 15 minutes of fame! Live and Local Music! If it was IP interactive, not broadcast one way, you could let listeners stick in THEIR credit cards and if enough people paid, say $2.00 each, an old electric fence charger hooked to their instruments and mics could be activated, the modern equivalent of “the hook.”

Hell, that might be a hit … but on TV, though – not radio. Is Chuck Barris still alive?

My reply:

It’s a horrible programming strategy. Sure, it worked back when rock was thriving… happened all the time… and I’m fairly certain many of those classic rock hits were the result of plenty of back door parties. Then again, back then, an album had at least nine great tracks on it. Artists weren’t made in the studio, they were made at their shows. Conversions worked as well. Did that make it okay? Nope. But at least we couldn’t really call it bad programming. Hell, college stations would play their buddies single for a six pack even. Those days are gone.

We’ve seen labels purchase entire four minute blocks of programming drive time in an effort to get a song on the air… pretty bad strategy for the label as well… and costly.

And once again, yes, it doesn’t reflect the listener.

The one exception I find that does work is when you have stations devote an entire day to requests for donations – while the format gets screwed, you end up with pretty engaging and entertaining radio if done right… and the cause is usually worth it. Stations can get creative and listeners can get involved and sometimes a song comes along that sticks. But again, a new artist isn’t going to have a breakout hit based on a day like that.

Nor should an artist again expect radio to be what makes them or breaks them. Especially not these days.

Then Rick again:

Forget programming. The only thing that matters in radio is the sale of a commercial!

My reply:

Rick,

Come on… You know this. You don’t sell commercials without programming.

Again, without a market (listener) for the product (content) you have no business (station).

Then Rick again:

Want to bet?

My reply:

Rick…

It’s basic economics. Without a consumer for the product the product won’t sell.

Then Rick again:

Forget programming. The only thing that matters in radio is the sale of a commercial!

Eric again:

The Communications Act and the FCC’s rules require that:

When a broadcast licensee has received or been promised payment for the airing of program material, then, at the time of the airing, the station must disclose that fact and identify who paid for or promised to pay for the material. All sponsored material must be explicitly identified at the time of broadcast as paid for and by whom, except when it is clear that the mention of a product or service constitutes sponsorship identification.

“Promitonal consideration was provided by………”

Any broadcast station employee who has accepted or agreed to accept payment for the airing of program material, and the person making or promising to make the payment, must disclose this information to the station prior to the airing of the program.

“Therefore, under certain conditions, IT IS LEGAL”

Any person involved in the supply, production or preparation of a program who receives or agrees to receive, or makes or promises to make payment for the airing of program material, or knows of such arrangements, must disclose this information prior to the airing of the program.

Broadcast licensees must make reasonable efforts to obtain from their employees and others they deal with for program material the information necessary to make the required sponsorship identification announcements.

The information must be provided up the chain of production and distribution before the time of broadcast, so the station can air the required disclosure.

These rules apply to all kinds of program material aired over broadcast radio and television stations. Some of the rules also may apply to cablecasts.

“You notice that it doesn’t specify the ‘type of program content’, but just ‘program content?”

“And if an artist chooses to waive his right to ‘performance rights fees’, and since ‘nothing of any value’ (not even a penny) doesn’t exchange hands in either direction, how could that be misconstrued as any type of ‘pay for play’ scheme?”

My reply:

Eric…

The circumstances YOU discussed were *not* legal. Full disclosure was covered early on in this discussion… your suggestions had nothing to do with full disclosure. Your examples were not full disclosure. You mentioned swag and a gift card and promotional items to employees. Your own words regarding artists and getting additional airplay were…”side deal”.

But it is great that you are publicly posting your learning curve. It is always refreshing when a person works to better themselves in their trade.

Eric again:

A ‘side deal’ can be nothing more than an agreement, and without the exchange of anything of value, or the promise of anything of value in either direction, it isn’t illegal. It’s just an agreement, and nothing more.

My reply:

Eric…

This statement from you isn’t really making sense. Agreement for what? What exactly is the “deal”? If nothing is being exchanged or promised then what is the agreement? What are they agreeing to? You’ve just created a contract that has no terms. That isn’t a contract. That isn’t an agreement. It’s nothing at all. I mean, I guess if they are just drafting up a document that says “I know you and you know me.” But why on earth someone would take the time and money and energy to do that is beyond me.

And it isn’t your original position anyway… again… your quote included a side deal with a station for additional play. That includes VALUE. Your arguments throughout this discussion have all been for payola and pay to play. And without disclosure.

Again, not only is it horrible programming, your suggestions were illegal.

Again, good to see you have looked into the law.

Then Rick again:

No one here has suggested “without disclosure”

My reply:

Rick… Do you need me to pull up the quotes in context from this entire thread?

Because I can if I must… but I think that last backtrack that defines “side deal” as no “deal” at all makes it rather clear. Let alone the fact that Eric’s argument against it being payola was that it isn’t “money” changing hands. He also doesn’t seem to think additional adds is value. Then there was the original posts about the misconception of how charts work. I’m fairly confident that based on the responses to the counters to his own posts, we aren’t talking about a situation where the defense was because it will be disclosed.

He also referenced “working something out” (in quotes deliberately) and brought up the swag (for a station wall) and credit cards loaded with cash. I’m sorry, when was the last time you equated those items to a station as a line item in your invoices for advertising revenue?

But again, I’ll pull up the quotes if you need me to…

Besides, your original post was a pro for the days of paying in secret. Context is not lost Rick.

Chris Rolando joins us:

This is a GREAT concept. And… as a broadcaster I can tell you to that I wouldn’t mind backselling a song with “That’s Louie and the Fish coutesy of MCA records….”. If that keeps the RIAA, BMI, SESAC, ASCAP and other “partners” out of my pocket, all the better!

Unlike what many here seem to believe, the FCC has NO say over content, as shown by the recent Supreme Court case. More of these will follow. The FCC chaged the rules when it began to rent spectrum some years back and when it began its campaign of discrimination in who could and who could not own a radio station… what races pay less for a station than others, what genders get preferential treatment in ownership of broadcast licenses and so on. But on the point of content, the Supreme court has slapped the FCC’s hand saying “enough”.

Content? I think we have all had quite enough of Lady GaGa, and Ruch Limbaugh and other such “entertainment”. Imagine a station in Chicago where indies have the same chance of airplay as do signed acts because they all pay the same to be on the radio. This station may not even have to run commercial messages, instead making all of its money from the so called “artists” who appear. Sure a programmer would have to see if the content “fit” but the traditional music director who is trying to copy a sound from 600 other stations… well they also become obsolete.

Here are some predictions that in the year 1980 would have been laughed off by all of you:

Newspaper can no longer afford to print on paper. New delivery vehicles sought

Cable TV franchises in bad shape as phone companies off better packages for
less

Video Cassette rental business in danger as people begin watching movies on demand from Televisions hooked to phone lines.

National Radio Channels fail as consumers won’t cough up $6 per month to hear them

CD sales fail as people buy singles for 99 cents each.

Here’s the next one I’d like to see:

ASCAP, BMI, SESAC, RIAA declare banruptcy on same day, seek protection from creditors. This, the same week as Sony Record division files for chapter 7 bankruptcy.

Go ahead poke all the holes you want into this. But realize that TV broadcast stations right now aren’t worth the steel in their towers because of new TV sets that will tune into the Internet. Services from Microsoft, Apple and others are coming about to provide you “shows” and “movies” as you want them. What happens when your favorite show signs with Microsoft or GoogleTV instead of CBS? You simply tune to that channel. The bacle company and the phone company will compete to provide data services instead of content, leaving that for others.

You see… everything is possible… if you open your mind.

My reply:

Chris,

Stations can already initiate that backsell. Purchasing the programming time has already been done. No one here has said that the FCC is forbidding song play. I’m not sure where you get that.

But as to content? In general? You are incorrect. The FCC most definitely still has a hand in content. This ruling didn’t end all that. The door is still open for the FCC to write new indecency policies that would pass the constitutional test.

Also, stations are still required to include certain types of programming in order to meet requirements as well. In other words, content is still very much a reality. Then again, there is the whole political ad mess… etc.

Which I am not advocating, I’m simply just stating that this win in no way means “it’s over” or that content is not still controlled.

Again, I think people are confusing these royalties as something they are not. They are based on the concepts of distribution of the song. It is a false dilemma to suggest either pay for a full four minute ad avail to play a song OR get royalties. One has absolutely nothing to do with the other.

As to your personal preference against artists like Lady Gaga or broadcasters like Rush… irrelevant. They appeal to their target audiences. You don’t like em, fine… but to suggest they aren’t “entertainment” is just a subjective perspective – and one not shared by their fan base. As long as the target listener of a station wants to hear Bad Romance, it will be on the air. As long as the target listener wants to hear Rush rant, he will be profitable in the industry.

As to the assumption that indies will get a “fair chance” because “everyone pays”? Naive. Indies have the same chance now. If the song is tested and does well with the target, it should get in. Suggesting that the Indie will get a better chance at spins when going up against a label with thousands more dollars to spend? You haven’t really changed the playing field at all.

As to not having to run ads… how much are you planning on charging these artists for a spin? And again… who is your listener? What’s your target? Why do you have a station to begin with?

Any programming strategy that suggests pay to play ignores this is radio we are talking about. And radio is about the listener.

Without the listener, you have no consumer. Without a consumer, you have no revenue.

Again, if you just want to play music and make some money for distribution, set up a website and see how that goes. But I can promise you, if you don’t have an audience, why would an artist choose your vehicle for distribution and promotion to begin with?

Chris:

Elizabeth…. there you go again

It is always about content. But I personally believe that many of us in the industry think that we KNOW what the “base” wants when in fact we can never be sure. You see, there will never be a survey that says “among people who will not answer a survey or be in a focus group…” because the CAT theory kicks in.

I think that people may no know what they want…. but when they find it they will know. In the mean time as we continue to experiment, we may just happen upon a new answer to a question that is not being asked.

The back sell I gave you was a Sponsorship message. Just as McDonals is assumed to be paying for the ad when they are mentioned. They don’t have to say “We are McDonals Corp and we approved this ad”. We could sponsor identify songs that are paid for play just that way.

As for the FCC… yes they will continue to spew out rules that may in fact pass consititional muster…. BUT just because a rule may be constitutional, the FCC has never been granted to regulate content. We have all accepted their “power” like sheep, but it does not exist. The FCC is charged with regulation and coordination of the airwaves (whck their site). Under Powell they attempted to put their hand into station hiring, moving toward quaota. That was struck down. Since then they have decided to go against indecency, though they cannot codify it…. they just know it when they see it.

Pay for play? Yeah, I like it. As for indies not having the spending power… you missed my point. I was NOT promoting socialism. I was saying that an indie would have an entry to play that is equal because it is based upon…. wait for it…… MONEY!!!!

As for Royalties… no I do NOT believe in them… for the song writer or for the so called “artist”. Let some new talent bypass radio and turn themselves in to something…. how…. through iTunes? Through Pandora? It hasn’t happened yet, and I just cannot see it working. So WE in broadcasting turn these people into billionaires, and in return, we PAY THEM? Nope, I don’t see it. If RIAA and ASCAPBMIETC really are “partners” as they like to say, then we should be getting kick backs when one of these artists hit. Ah but that is not the way it works. Does that seem like a fair contract to you?

As for station having to ” include certain types of programming in order to meet requirements”, I think you may want to reread your license and the tennants of it. All I am required to do is serve the interests of my community of license. Quite ambiguous if you think about it. Does serving the community mean…. news? Okay, what is news? Does it mean public affairs programming? (ever looked at a diary to see what people are doing during your public affairs programming?). The FCC is trying to bring back ascertainment…. but will they define it this time?

Right now I am required to… lets see… oh yes…. identify the station at the top of the hour. That is mandatory! Other required broadcast actions (on air content regulation)…. Hmmm well maybe I have not read the rule books right. What else IS required?

PS: If you compare a radio signal to a web site as a distribution platform, then you have no idea the value of a radio signal.

My reply:

Chris…

First of all… I didn’t compare radio to a website. I suggested a website was a better vehicle for trying out the proposed “pay to play” model. Still not a good one…

RE: Backsell… right… we already have this in place and it isn’t a dream. Has already been done… and I even mentioned ways to get creative with it as well. So… not sure what you are wanting more than we already can do?

As to what the target wants. You know, I hear this argument a lot and it always surprises me. Demographics are really not so out of touch as what most people assume. We aren’t talking about anecdotal research here (like say, when some suggest requests are great). We’re talking about research. Consistent research. Effective research. Studied and well crafted research that works. The “exception” point never really gets through the time tested standard that like it or not, people *do* fall into target groups. Can a woman prefer classic rock *over* AC? Sure. (I do)… but I’m not expecting the local classic rock station to start targeting me exclusively.

And yes, ambiguous it may be… but it counters your claim that content isn’t controlled by the FCC. The fact that you are mandated to serve the locals is enough of a hold to toss your “no impact on content” argument out of the discussion. So does having to identify the station. And for that matter, having to disclose the payment. Point being.. you can’t claim that the FCC isn’t in the content business. They clearly are.

Your point regarding Indies was already countered. Again, your assumption about why don’t get played is because they are up against signed artists. They have a BETTER shot in the current model because it is based upon their merits. It is about how great the song is, how well an artist can market themselves and whether the listener likes it. That’s it. Pay to play isn’t going to change the playing field – but to alienate the listener and give a disadvantage to an artist that does have a hit but no $ to spend.

Most importantly, it makes really bad business sense, as I mentioned already because there is no consumer. No audience. And so, the revenue stream will quickly dry up. You still haven’t answered the question on how you persuade artists to pay you to play their music if you don’t have anyone listening? And you won’t have anyone listening if you don’t have a target audience. You don’t get a target audience without a strategy that includes giving the consumer what they want. And if they don’t want the song that just played they aren’t going to listen long. So what good is it to charge the artist for the spin if no one is there to listen to it – and why would the artist even consider your distribution center? Pay to play is just a bad model all the way around. It’s bad business sense.

As to royalties… my guess is that you don’t understand the purpose of royalties. And, as I mentioned to Rick previously, you seem to have this really bad misconception that radio is doing the artist some sort of favor – forgetting completely that the edge is with the artist since – as I said before – they are providing the content. Until you can accept the fact that “royalty” is about distribution rights and that radio is not single handedly turning people into billionaires, you won’t have a case to be made.

When I hear radio talk as if artists owe it all to them it just sounds so naive and bias. There are *so* many people involved in the formation of a breakout artist – hell, let’s give all the credit to the guy who loaned out his garage when the guys were teens… point being – it is highly arrogant of radio to take this position.

Once more: radio needs the artist more than the artist needs the radio. Because without the artist, there is no content. But without radio? Hell, there are plenty of other vehicles to get music heard – not the least of which is just standing on the street corner with a guitar case full of quarters…

Let that sink in…

Chris:

Don’t need to let any of that sing in. Your circular arguements on radio and “artists” are the chichen and egg arguement. Great to say because no matter what you say you cannot be proven wrong.

And last comment to you because frankly I wonder if you have ever owned a broadcast property, made a payroll or lived through decades of change….

IF in fact radio is not important to the artists, then why haven’t these record companies taken a new route. I mean heck, if we really are no better than ome web site, whuy not just stop licensing their music to radio sations all together and move the whatever this new technology is? What am I missing here?

Arrogant of radio? I say it is arrogarnt of so called “artists” to believe that they are in some way supporting those of us in broadcasting. I don’t believe your “methodology” in finding out what people want any more than a turst the weatherman to get the weather right, or the pollsters to correctly call an election margin. You know, as do I and everyone else that even asking 5000 people out of 10,000 will not give you valid results. .

No, I think I will continue to believe a few things:
-Surveys are always wrong by a percenatge – which means they ARE wrong
-”Artists” do not have a vehicle they can use… if they did they would
-Radio is getting the short end of the stick in paying royalities
-The FCC is being neutered, as it should be
-RADIO is a Business (Don Beverage, RAB – Lowes Anatole Spring 1986) and as such should and will act in its own self interest.

“Payola” is not now illegal. What is illegal is non – sponsorship identification.

My reply:

Chris… there is nothing circular about my argument. To be circular, the conclusion must be in the premise. It isn’t. And again, I already mentioned the chicken and the egg… guess what… radio didn’t come first.

And if you can prove me wrong on it – go ahead – but calling something circular that is not shown to be circular isn’t going to cut it. It’s kind of the equivalent of “na ah”.

The personal attacks aren’t warranted either. They are totally unnecessary. Isn’t this a professional discussion? Let’s try to keep it there…

I never once claimed that radio was not important to artists. I also never claimed radio was no better than a website.

Yes, it is very arrogant of radio to think they are the reason artists get so successful. You know what makes artists successful? The listener. The fan. The consumer of the artist’s product. Radio is one vehicle of publicity that an artist may utilize. And they do. But radio forgets that artists are providing their content. Without the artist, the station has no content.

As to the methodology – I’m guessing you have some other sort of way to locate a consumer other than the research? Because I hear folks cry that cry lots of times… and yet never once have I ever seen anyone give their methodology. So, what is yours? Because you must have one. Slamming research because “it doesn’t work” needs to be backed up by a statement of what does work. Or else your claim is that “nothing does”. If nothing works to find out what people want to hear, well then we better call every single company that has ever been successful in marketing and tell them all their jobs are worthless. Every single industry will die because there is just no way at all of knowing what people want to buy. It is nonsense Chris.

Your fallacious reasoning regarding surveys is telling. A margin of error does not mean a survey is wrong Chris.

Artists have loads of vehicles for exposure. They always have. Again, street corners work nicely for some of them who just want enough dough from their melody to buy a cup a coffee.

Radio is paying royalties for distribution. Without content, radio has nothing to program and therefore, has no revenue stream. See previous post regarding the very silly claim radio makes when it bitches about royalty. If you missed it, here it is again: If you provide content for someone, and they make revenue through distribution of your content, it is reasonable for you to seek compensation for provision of said content. Pretty simple stuff here.

I’ve no problem with the challenges against some of the regulations the FCC has in place. I applauded the recent victory. Here in this group I already advocated an end to the decency regulations.

Sure radio is business. That’s been my point. Businesses research their target consumers. They provide said consumer with product. In this case, music is the product. Music comes from the artist. No artist, no product, no consumer.

And Payola is illegal. That statement I just made is even redundant. In fact, the very term includes “illegal practice of”.

And this is where we are. I’ll update the conversation as it takes place, but feel free to join in with your thoughts now. Especially if you can offer a perspective from different areas of our industry.

Thanks.

Elizabeth

*Are we LinkedIn?

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