THE INSIDER INTERVIEW: THE RECORD INDUSTRY EXPOSED

[Pamela]

The Insider Interview: The Record Industry Exposed

Who is the insider?
He is a long time site regular who works in Los Angeles for in a high profile position for one of the big four major record labels.
When sent a whole range of questions regarding business practices of the major labels and how different aspects of the record industry work, he was only to happy to spend some time writing some in depth and thought provoking replies.
What is included below may sometimes be controversial to some, but none of it is fabricated. It's how things work.
Naturally the identity of the author cannot be revealed because of fear of reprisal from his employer. While they are one person's take on the scene, his views are an interesting read...

(snip)

Moving to another issue – radio and airply - the radio industry is now deregulated, yet it is harder than ever to get a new song on the air without substantial financial backing. Can you explain what the whole Payola or Pay For Play concept is and how it works?
The old fashioned version of payola is illegal. Once a few people got busted for it, the idea of payola had to be re-invented.
Instead of the labels handing out cash and gifts to stations, they now have added a go-between to do it more discretely. People like Kalodner are essentially middlemen hired by the label. These guys will pay millions of dollars every year to get songs played on
the radio. The radio stations receive what are called "promotional payments", often getting hundreds of thousands of dollars each. Once the song is in heavy rotation, the label sends the person who made the arrangement a check for his services.

Your local radio disc jockey never picks what he wants to play. That's decided for him. The music industry is a multi-billion dollar goliath. Top 40 stations in nearly every city have self-appointed geniuses watching over everything they play. The stations win
because they get huge payouts. The payola guy wins because the label sends him huge paychecks for a job well done. The listener loses because he hears what someone else wants him to hear.
Ironically, it was the deregulation of the early 90s that paved the way to this new breed of payola. It actually made things much worse.

What kind of sums of money are being exchanged? For minor coverage? For blanket coverage?
Each song on each station is worth a minimum of $1,000.00. Some songs can net up to $10,000.00. That's each song added to each station. Consider there are about 10,000 top 40 pop stations in the U.S. alone.
Each station adds about three songs a week to their playlist. Three songs at say $2,000.00 each over 10,000 stations -- do the math. It adds up to 60 million dollars a week in cash changing hands. That's three billion benjamins a year, my friend!
How would you like Kalodner's job now?

The RIAA is trying to stamp out Internet Radio Stations by making them pay
royalties also. Is this a smart or a stupid move?
Artists deserve their royalties for any public broadcast. However, internet stations are still a new and not yet profitable industry that is still in its infancy. I think a good, fair, comprehensive plan needs to be put in place that will serve everyone's best interests.

I think a grace period of a few years to see where things are going is the best course of action. The RIAA is there to serve the interests of the labels though, and like the labels, they haven't shown a lot of good judgment when it comes to the internet.

Just this week I sent a DJ (who is a site regular) a request to play a few new tunes if I sent them to him...
His reply was this:
“I would've said "Hell Yeah!" about five years ago, but the corporate powers
that be just cut our playlist by 200 songs...Now the idea is to squeeze out our competition, since we also own the oldies station in town, who is updating their playlist. This is supposed to make it harder for the crosstown rival to hang on to their share of the market. Nice idea, but in the meantime, the listeners who like that kind of narrow
programming are the only ones who are listening.”

What do you make of that?!!
That's how the radio business is nowadays, my friend. I think I explained it all.

Read the rest at MELODIC ROCK

[ACcountryFan]

Great article!! I love reading about the radio business and stuff like that....even though i might not post, i still lurk and read.

I TOTALLY agree with the statement about who the loser's are! It's the impressionable listeners....as i've always said. They, in my opinion, for the most part don't think for themselves and they hop onto whatever a radio station plays regardless if it's any good or not. In my opinion, here's the motto for Top-40 radio: consumers hear, discover it's "cool" with their peers, therefor they buy...meanwhile, great songs and singers are being shut out while these new-age payola "middle-men" and radio stations in general reap in the millions of dollars without care of what the heck they're playing just as long as what they're playing is scoring well with a target audience who for the most part couldn't tell a well-written song from a badly written song if you'd glance at the current Top-40 in the Hot 100 chart.

That mentality, as always from radio, is in my opinion, total B.S. and corruption anyway you look at it despite the fact they've covered their by making it "legal" payola.