Last month as we were wrapping up the year, I was in communication with an old friend from the radio/music industry with whom I did business many years ago. As we were catching up, I mentioned that my son is trying to break into the film industry in L.A.
As a Southern Californian himself, he said to me, “Your son is smart. The music biz is over.”
A lot of people in our respective industries feel that way. The rise of digital music, the corresponding fall of music sales, and the emphasis on touring and merchandise have changed the equation of how music icons make their money.
This has hit home for me as I’ve followed a number of prominent artists and their reactions to the digital music model, and its implication on their brands and their livelihoods.
Everyone knows about the Taylor Swift/Spotify situation because it was very public this past fall. But in an interview with Ringo Starr last month by Rolling Stone as the former Beatle is (finally) being inducted in the Rock and Roll Hall of Fame, he talked about his storied career. And along the way, he was asked whether he listens to streaming services like Spotify (where most of his solo albums are available), and Ringo had this to say:
“No, I go on iTunes and pay the artist so at least there’ll be some remuneration for them and they can keep going. I heard the story of some artist, who we all know and love, who had five million streams and they gave him a check for $17. We’re not all very excited about those streamers.”
And then there’s the Pharrell Williams situation with Spotify over royalties he earned for “Happy” from Pandora, based on 43 million streams in just the first quarter of 2014. Originally, the article in Fusion by Rob Wile stated that Williams earned just $2,700 from all this Pandora airplay. The story has since been modified to state that when you add in his performance rights checks, that total comes to more than $25,000.
Sony/ATV chief Martin Bandier calls this arrangement “totally unacceptable and one that cannot be allowed to continue.”
Since that article appeared, Pandora has fired back that “the issue is not whether Pandora pays enough in royalties. The real issue is the financial dispute between labels and publishers about how to divide Pandora’s industry-leading royalties.”
And that split is out of the pure-play’s hands.
And from Pharrell Williams to the Turtles – and that’s a span of 60 years – there’s unhappiness with royalties and pure-plays. Flo and Eddie (or Mark Volman and Howard Kaylan) are suing their way from SiriusXM to Pandora, alleging their pre-’72 records deserve compensation. Late last month, Pandora stepped in to claim that the Turtles’ claims “constitute a restriction on freedom of speech.”
Altogether, it’s a mess, and it reiterates what my friend said about the state of the music business today. Streaming music – rather than sales – is the new metric that matters. And as consumption rapidly moves to streaming music and not owning it (Apple’s purchase of Beats Music is all about that), artists and labels are in a quandary, fighting over the hottest new distribution outlets.
So where does broadcast radio fit in this equation?
Mostly sitting on the sidelines, wondering what went wrong, and waiting to see how this all plays out. But the reality is that FM radio should have a lot to say about this relationship between musicians and modern distribution outlets. That’s because Pandora, satellite radio, Spotify, and the rest are simply that: digital dump trucks that play the music in mostly dispassionate, disposable ways. You build a playlist or an algorithm selects the next song, all the while allowing the consumer to skip a song whenever they like. There’s very little context, passion, or enthusiasm because these digital outlets are essentially utilities.
As performers are learning, these pure-play platforms may be effective ways to expose their music to a mass audience, but the financial payback is lacking. So is the brand-building. The consumer controls what she sees, so the music simply is out there in space – or the cloud, as the case may be. It is less about the artist brand and much more about the flavor of the month.
The missing link is what radio has always provided. It’s a given that a popular FM station with a solid audience is a great exposure tool. But it can be so much more. Think promotion and marketing – the same elements that are missing when car dealers simply buy ads on Pandora or Facebook.
If you rewind the clock a few years, you’ll recall all those people running around in radio stations wearing satin jackets – the “promotion people.” Yes, they wanted you to play all their artists’ songs. But they also encouraged and created the promotion and marketing of those songs, albums, bands, and artists. They knew that airplay mattered, but the “secret sauce” was the embrace: the attendant promotion, support, and everything else that went with glorifying artists and groups.
And that’s where radio came in. When a hot new album came out, stations had their vans in front of record stores as customers lined up to buy that new album. Stations raced to be the first to play that hot new song, often disappointed if they came in second even by just a minute or two. When bands toured through cities and towns – big, medium, and small – radio worked hard to promote their concerts, often treating them much the same way that local TV covered big news events.
There were interviews, backstage opportunities, and as was the case with some bands, a chance to do something special – like playing softball with the station staff – an activity that we did for several years with bands like the Doobie Brothers and Journey during the years I worked at WRIF.
In his book, I Killed Pink Floyd’s Pig (which we featured here last year), Beau Phillips shared many stories about how radio stations worked directly with bands, labels, and management teams to build relationships – and sell records.
It wasn’t always pretty or linear, but that’s why Beau’s stories are so good. The imperfection of linking radio to records has always provided cringe-worthy, spontaneous moments. Like the MTV Video Music Awards, that’s one of the reasons why this dysfunctional relationship was mostly successful.
During those same days, record labels were consistent advertisers on the radio, as were concert venues and promoters. They all realized the benefit and power of a trusted, local audio medium for showcasing their music stars.
Today, it’s banner ads, Groupons, and social media ads positioned off to the side that consumers do their best to ignore, whether they’re on their phones, tablets, or laptops. None of this activity is truly building artist brands. Instead, it makes the music even more disposable.
There’s no going back, of course. That’s one of the lessons of the past decade of digital disruption. But there are parts of the old model that are still viable at a time when music sales are cratering, bands are forced to be out on the road more than ever, and fractions of pennies are trickling in from pure-plays and satellite radio.
Radio and records have been at war for some time, as these royalty battles erode relationships that were once very successful for both parties. A little “old school” thinking might just be the antidote that both industries need to redefine their futures in the digital age.
Perhaps there’s still that chance to be happy together.
Jacobs Media has consistently walked the walk in the digital space, providing insights and guidance through its well-read national Techsurveys.
In 2008, jacapps was launched - a mobile apps company that has designed and built more than 1,300 apps for both the Apple and Android platforms. In 2013, the DASH Conference was created - a mashup of radio and automotive, designed to foster better understanding of the "connected car" and its impact.
Along with providing the creative and intellectual direction for the company, Fred consults many of Jacobs Media's commercial and public radio clients, in addition to media brands looking to thrive in the rapidly changing tech environment.
Fred was inducted into the Radio Hall of Fame in 2018.
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As I’ve said and can’t stop saying — I feel like one of the last survivors of the Titanic — navigating through a sea of possibilities — or is that impossibilities.
It doesn’t have to be that way, Stoney. Radio has some amazing assets that perhaps need to be rethought and redeployed in the light of new competitive challenges and opportunities. Smart companies and visionary industries are strategically partnering to take advantage of their brand strengths. The radio industry is not out of bullets. Thanks for chiming in.
You’re right Fred, that’s all true. My analogy using the metaphor of the Titanic, is to convey the comparison of a ship that was built and believed to be too big to fail. It is those who ignore/assume what’s up ahead which put it’s existence out of touch, and in jeopardy. I can also emphathize from the musician’s stand-point. The digital age has given birth to a new generation of takers, it’s made it possible for everyone to be recognized, but there’s a lost channel in that. They need to know where their music is being used and played. Accomplished artists have become buried in the mix, reused in sampling, etc. — it is next to impossible to monitor.
Stoney, there’s not room for hubris and arrogance among anyone in broadcast radio at this time. The industry can’t rest on laurels that were earned decades ago. It’s a whole new day.
Radio needs to do a better job with music discovery, presentation, and providing value to an audience that is skipping all over the place. It’s a much different task than just counting down the American Top 40. Thanks for commenting.
Right again. Picture an air-traffic controller at O’Hare and multiply the flights by 100,000 — that’s the audience skipping all over the place. If most of your listeners is driving a vehicle, and the
rest are multi-tasking elsewhere, you want to grab those percentiles that are not plugged into their headphones on some satellite feed and hold them. Reviewing some of the demographics it seems that the Boomer generation still holds the most dedication for listners, over Millenniels and Generation X. Internet listenership is at 72% while 93% of listenership is AM/FM. It appears that as technology increases, those numbers for internet listeners will climb. So, what turns listeners on an what turns them off?
I don’t even know if there is such a thing as a format anymore. I’m a listener like everyone else, and sadly my favorite channel where I live is “silence”. I don’t enjoy listening to a station that
obviously is on auto-pilot with a play-list that is so predictive (at times deafening) I swear if I hear “Happy” or “Stay With Me” one more time, I’m going to bust a vein. I also don’t like having to be attached to a device and baby-sit the channel (unless I’m getting paid for it) . Satellite channels offer much, but again, they’re not perfect, in fact, some of the train-wreck formats need a good fine tuning.
Locally, when I do listen I find myself like everyone else, trying to escape by pushing the button — and what do you know — the song that just finished down the dial playing is on the sister station down the hall from the PD’s office. The free-form formats of Satellite radio I believe are the turn-ons for Mills and GenX. Plus, they’re more tech savvy, and plugged in and enjoy mobile ripping.
Then you have Sound Cloud, which offers some great music, and almost all of it is free. They may not be your mainstream artists, but I can assure you they are some of the best musicians out there trying to make a name for themselves. Where do you put them, what category? Next, we have your contest winners – American Idol, The Voice, etc. I want to know where they bury these people after they win and supposedly go on tour. There’s only been a handful I can recall that actually get that recognition and don’t end up singing The Star Spangled Banner, or a Xmas special as their final curtain call.
Classic Rockers will always be obedient listeners, they are the Boomers. Mainstream radio (at least here) has no imagination – they stay safe with what they think keeps their listeners in close connections to their advertisers. They keep their listeners in a mantra of “Happy” and sad “Stay With Me” around the clock, as if they only had 25 CD’s on the shelf and nothing more. Local radio (here) has gotten into some very bad habits of assuming by merging a number of stations all under one roof, skimming off the top (like a broth) and repeating the same programming – perhaps because they don’t care, or they’re appeasing their advertisers based upon the demographics of forced listeners.
This market has gotten too comfortable – and no matter how much they’ve changed names, call letters, formats, they never stop with the redundant form of torture it is listening to a stale play-list,
and while I’m on a roll “jocks” . That’s another discussion . Listeners tap into the radio for the music, a certain percentage want to hear talk radio (fishing/hunting reports are big here — avalanche reports in Colorado, while Chicago wants that traffic, sports, headlines) every market is different. The music is what they want, the choice of music is a utopia — they may even get what they want by mobile ripping. So, is the only use for local radio — advertising? How can we satisfy the listener, the artist, and the advertisers all at the same time, and incorporate streaming where it’s beneficial for all? Not everyone can afford satellite radio, that’s a plus for local radio to stay on-air. But what about the technology that might eradicate analog and digital local radio all
together ?
Radio like so many times before does need to reinvent itself. We are seeing another transitional phase, much like when television challenged radio, radio and tv are meeting more challenges with streaming.
BTW — I like chiming in. Thanks for listening.
Royalties are becomming a big issue – and if the labels had their way radio would be paying performance royalties. The last I checked the record weasels are claiming that radio airplay no longer increases their sales. So much for that good ol’ symbiotic relationship between the record biz and radio.
Spotify/Pandora are paying 70 cents on the dollar in royalties and that percentage goes up every year. Suggesting they pay even more is somewhere between arrogant, silly and fatuous. Yet artists are complaining that they aren’t getting enough to make streaming worthwhile. Its pretty easy to spot the ogre here – the labels are the only ones not complaining, because they’re taking all of the money.
None of the streamers are making any money, the artists are incredulous and the labels aren’t likely to budge. When the streamers have sold all of their stock, this may become a big issue – until then the record biz will cash their checks while ignoring the legitimate dealbreaking issues that artists and streamers have with the current arrangement. There is no business model here that I can see.
There is greed and lack of vision on many sides. But radio has brand strengths that could be leveraged, but cooler and more strategic minds will have to prevail. Thanks, Bob, for continuing to pose those questions.
Artists like Meghan Trainor are examples of the power of radio. Her career never starts without radio pumping it up and generating buzz. Labels can’t count on streamers to break artists and artists can’t count on streamers to sell tickets… so radio will continue to play a vital role.
Eric, thanks for the response. Keep your eyes here next week for a post about Meghan Trainor and the impact if Spotify, Shazam, and radio. (And you thought I only know about ZZ Top!)
Thanks Fred, this is accurate, incredibly well said and written, great timing at the beginning of 2015…..put a Candy Store in the middle of a densely populated area and secretly put a FREE sign out front so the owners don’t know and watch the herd come in and empty out the place, then the owner hangs the Out Of Business sign because the fundamental rule of business is this, ya gotta have revenue, cash flow to see another day, and that goes to the producers of the actual product as well (music)….it’s really that simple.
Billy, it is indeed, and yet the parties that be cannot see their way to sit down and work it out. As Bob Bellin pointed out in an earlier comment, it is a Rubik’s Cube with no obvious or clear solutions. But somehow, Detroit came out bankruptcy, despite many players having to take a financial haircut, often painful. But clear minds are always considering the greater good.
In the meantime, radio has a great opportunity to do what it’s always done so well. Thanks for taking the time.
i have the honor of being on all sides of this fence. Growing up in the record business I saw and experienced payola to get a record played, the metrics in the early 60’s was easy to manipulate, the radio stations played music that the audience wanted to hear, but who had the best relatives making the calls to get it to happen. Sensing the rise of country music and the dismantling of top 40 to a rotation of only 10 to 15 songs in the pop and r & b stations, the advent of talk radio. Today I am very proud to be a part of SoFloRadio.com where we are talk, music, sports and entertainment. As a radio station we want to promote new music, and play everything in a genres, we want the sports, the satire and the news. Radio is just a mixed up bag, it’s papa’s brand new bag, and no one will profit, just enjoy it.
Mark, thanks for the comment. I am definitely focusing on your last piece of advice.
Spot on, Fred! Your use of the word “PASSION” resonates. I was talking with Dave Van Dyke, yesterday, and he brought that up: The Passion Factor. The beautiful romance of radio & records is gone from the charts. Varsity FUBAR. Youthful greed cooked our golden goose. So many great genres and tunes now MIA. Over 50 and you’re not supposed to care about music anymore. Tell that to Tony Bennett, The Jersey Boys and all of us with some stashed vinyl with experience cueing it up for broadcast. Time to hit refresh, wake up and let the passionate, experienced Boomers fix this mess! And, that’s the truth.
Some old school radio and records promotions might prove to be a breath of fresh air. Thanks, Clark.
Can’t go back? Just look at AOL/Time/Warner. Digital future failed 99.9% of the time.
Important issue Fred, and you lay it out very well. However, I do not have the hope of cooperation that you do. Two factors seem to be at play. First, the guys doing outreach for the labels–and sometimes running the newer labels–are very young. They have no idea about the history of cooperation between the two industries. These days, I am associated with a small community station. In the beginning, we got service from several sources. But ultimately, that evaporated. To their credit, Naxos was the last to withdraw. Local, very successful indie labels, do not even have a channel for service of new releases. We have to go out and buy them if we want to play them. Radio play is of no interest to them, is not on their horizon at all, and they have told us that! Labels are not looking to radio these days for anything, and I do not see that changing.
Second, the big radio conglomerates have less and less contact with audiences. Many just outright play a rotation from automation with the same impersonal (and essentially meaningless) imaging played over and over, hundreds of times per week, as the only contact with listeners. The vast majority of stations around me, no longer even invite listener contact–except to “like us on Facebook.”
The ones who voice-track use guys who–to stay alive–do two or three VT gigs daily, all in markets where they don’t even live, let alone have contact with listeners. Furthermore, playlists are controlled so tightly by corporate these days, that even if a listener requests something or points out a new release, let’s face it: it is not going to get played. How can radio help the labels, when the local branch office outlets cannot offer anything without bureaucratic approval way up the ladder?
The latter half of 2014, I believe has brought some serious self-examination in radio that it badly needs if there is going to be any serious new growth. But until radio has the flexibility to offer something along with the local ability to implement it, and the young guys at the record labels become willing to start a conversation, I do not see any near-term happy ending.
Agreed – I can’t understand the philosophy of voice-tracking from an outside market. I live within seconds of a small local station that interviewed me for an on-air position — however, the position posted changed during my interview after I questioned if they knew what they wanted.
They started out saying it was a part-time position — I looked at the job qualification and I stated — are you sure you’re not looking for a morning personality? This certainly looks like a full-time position. They then dropped the interview, and switched the discussion and just wanted to “talk” about this new station.
They tried to talk me into running the board “sometimes”. This was starting to sound more like the old bait and switch — they knew my experience which was more qualified to P.D. the station.
I stated, I was looking for mid-days, I was certain that’s where I belonged thanks for the offer, but that was more of an intern position and not the position I answered. However, if they were looking for a mid-day female – because there really weren’t any females on the air in this town – I’d be interested.
I can only assume there was much small town paranoia/politics at this point — because where I came from and my past experience should have easily landed me in that position given the choices this small town gets. People don’t just jump ship and move for a radio position in ‘small town’ way north Minnesota. I came from a major market — it would have been to their benefit.
That said, that gave them an idea — they piped in a female voice-tracker — but wouldn’t take advantage of what they had available. I could have done this position just minutes away from the station — or LIVE.
Sorry to be long winded today — but your post conjured a very important note I found relative to a personal experience.
And it’s very easy from my perch to try to draw conclusions from the many stations and markets that I visit and stay in touch with. Your experience on the ground suggests that there are operations with very different priorities – and it sounds like that’s the buzz saw you ran into. Thanks for sharing the story.
Chuck, you may be right in your assertion that radio may have its own set of systemic problems. The voicetracking and associated staff cuts put more pressure on the few lives bodies around to fulfill promotions, attend concerts, and other activities that helped the music and the artists who made it resonate. Thanks for the reality check.