How Payola Works Today… Or Why You Only Hear Major Label Songs On The Radio


Over at the Tunecore blog, former Rykodisc President George Howard has a post up explaining how payola works today in the world of major labels and radio stations. While I know that a large percentage of folks reading this here are rushing to the comments to declare “ha! who listens to radio any more!” the fact is that a ton of people do, and for the major labels, it’s still a key (if not the key) way to “break” an act. And even though the labels keep getting dinged every decade or so for payola, the process never seems to change much, other than greater efforts to separate out the transactions so that the record labels can pretend that they’re not bribing radio station employees, even though everyone knows that’s exactly what’s happening:

Getting a song added to a stations playlist to get a certain number of plays per week involves a rather byzantine process that brings in various parties, called independent promoters (indies). These indies are first paid by the label. It’s important to note that the money the indies receive isn’t necessarily compensation paid directly to them for getting Program Directors to get a song played. Rather, they work more like an intermediary to pass the label’s money to the radio station. These indies, with the money paid to them from the labels, pay the radio station money for various listener give-aways, bumper stickers and so on. To top it off, these very same indies are often also paid a second time by the stations themselves as a consultant to advise the stations on what songs they should play.

Because of this, the major labels absolutely dominate radio airplay. Independent labels could try to hire the same indie promoters, but won’t get the same attention anyway:

Here’s why: You’ve come to these indies, and they’ve gone to the labels, and they’ve taken your money, and they know that you’re probably not coming back any time soon. On the other hand, the majors are coming every week with money and new artists. Who would you prioritize if you were in the indie/radio station’s shoes?

Now, as Howard notes, and many of you probably have already realized, this is not a sustainable system. Because if radio keeps playing crappy songs based on bribes rather than quality, in an age where there are greater and greater alteranatives, the system won’t hold. More and more people will go elsewhere, where there’s more choice and fewer guys with briefcases full of cash making the decisions.

If you’re wondering exactly why the labels have been trying to shut down popular hip hop blogs recently, look no further than this story. Such blogs have really become “the new radio” for creating hits for the younger generation. But, unlike the old radio, the major labels don’t “control” these blogs in the way they control radio. While some of it may just be the left hand not knowing what the right hand is doing, there are at least some who see this as an opportunity to “regain control.” Forcing blogs offline and/or trying to significantly limit them is a pure power play by the labels against hip hop blogs. It’s got nothing to do with copyright or being worried about someone’s songs leaking. It’s why the RIAA is out there sending takedowns on music that a Universal Music employee purposely put online for free.

Now I’ve said before that I’m not convinced that payola for radio play is necessarily wrong or bad. A play on radio is effectively a commercial for that music/musicians. And paying for commercials is (obviously) fairly common. Is it really so crazy that some in the industry want to “buy” spots? I get the argument concerning the lack of transparency. And, in fact, as technology becomes more widespread, and as the next generation of services launches, radio stations are going to be forced to move away from payola not because they don’t like the practice… but because people won’t be relying on radio so much for leaning about new songs. For the time being, it’s likely that these kinds of situations will last. But consumers just aren’t going to stand for it that much longer.

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