Monday, June 16, 2008

FMC on Payola and Localism

There's been some buzz around FCC Chairman Kevin Martin's public backing of the XM-Sirius satellite radio merger, but we at FMC think that terrestrial radio is still worth making noise about.

FMC has long been involved in the push for better radio. We've conducted studies that show that commercial radio routinely excludes local and independent artists, largely due to the excessive station ownership consolidation that occurred in the wake of the 1996 Telecommunications Act. (See our 2002 and 2006 Radio Studies for more info).

We recently filed reply comments in the FCC's localism proceedings, in which we made the case for greater diversity on the public airwaves. But we're not just complaining about the crappy state of things — we're offering possible solutions. In our reply comments, we describe concrete ways for stations to make localism a priority, and urge the FCC to collect playlist data so it can track and analyze playlists in order to ensure that stations fulfill their public interest obligations.

Another reason that local and independent artists have difficulty getting radio play is payola. Under this system, labels pay independent promoters to promote certain records to radio stations. The promoters in turn pay radio stations annual fees and give them perks if they add the songs to their playlists.

In April 2007, the FCC brokered voluntary agreements between radio groups and major labels, which were supposed to open the door for a wider range of music to be heard on the airwaves. From what we can tell, it hasn't exactly worked.
Today, we released Change that Tune: A Payola Education Guide for Musicians and Citizens, which outlines the history of payola, the development of the “indie promoter” system and the investigations by the New York State Attorney General’s office and the FCC. Also included are the contents of the “Rules of Engagement” and the indie-set-aside, which were signed by the four largest radio station group owners in April 2007. Finally, the guide offers practical tips about how artists can interact with radio in the 21st century.

We believe that if terrestrial radio were to open itself to more diverse and local content, they might just re-attract those listeners who have given up on the medium in favor of other entertainment. Given the precipitous decline in listeners, it's definitely worth a try.

Click here for a PDF of our reply comments; click here to read or download the Payola Education Guide.


Anonymous said...

If the FMC really wants radio to play more local and indie music, it might spend a few minutes trying to work WITH radio instead of against it all the time.

Radio airplay is not a right. It's a choice. The biggest mistake the FMC makes is assuming airplay is a right, and anyone who makes music should get automatic access to the airwaves. That is simply NOT how the American system works.

The FMC website is filled with articles attacking and hating radio. That's no way to encourage radio to play your music.

Music is a relationship business. That's something the FMC doesn't understand.

The labels aren't paying radio to play music. What the majors have done is investing money in music, in artists, and in creating a buzz for their music.

One great example is Taylor Swift. No one in radio wanted to play a 16 year old girl from an indie label. So the label built a fan base first, and showed radio there was demand for her music. That convinced radio to play her music. Same with Cobie Callet.

You can continue to cry to the FCC and the government, and try to force radio radio to do something. But it would be far more effective (and a lot quicker) if you simply created good music, and made it so radio WANTED to play it, instead of forcing them to play it.

FMC said...

Thanks for your comment. Please note that we prefer non-anonymous comments.

FMC does work with radio -- actually, that's why we're so committed to main sure the medium remains vital in the 21st century. Part of keeping over-the-air broadcasting strong is making sure
that radio serves the local communities in which they operate.

It's the FCC's job to make sure that their stated commitment to localism, competition and diversity is borne out in the behavior of the radio station owners who do business on the public airwaves.

We think Taylor Swift is an excellent example of the organic growth of an artist (and a far too rare case of how such a performer can reach commercial airwaves).

But what about Spoon and Arcade Fire? Both of these acts have crated a HUGE fanbase, have seen their most recent albums debut in the Top 10, and have toured their asses off to get where they are. You won't hear them on commercial radio, even though there's quite clearly demand.

Indie music totals 80 percent of all music released worldwide and commands 30 percent market share. Clearly, some of it is "good." So if that's your criteria for getting on commercial radio, how come we hear so little of it? Why are non-com broadcasters like NPR having major success in introducing new artists (and thereby snagging new and younger consumers, which any business model needs to survive) and commercial radio is struggling to retain what listeners it has?

You can't JUST blame the iPod.

FMC cares deeply about terrestrial broadcasting. We love its history, its availability, its cultural significance. Radio used to be an art form, a true experience. In order to restore its former glory, we believe station owners and programmers need open the door a to more music. Either that, or continue a tragic slide into irrelevancy. We think radio, as such a uniquely American commercial and cultural force, deserves better .

Anonymous said...

"FMC does work with radio -- actually, that's why we're so committed to main sure the medium remains vital in the 21st century."

I think if the FMC spent more time working with people in radio, understanding their world, the Arbitron ratings sytem, and the needs of the advertising community that fund it, the answers to your questions would be more evident.

Reach out to the people in radio. With the hand instead of the sword.

FMC said...

We definitely welcome more interaction with representatives from radio. Actually, we were hopeful that the Voluntary Agreements of 2007 would usher in a new era of communication and collaboration between the radio station groups and the independent sector. So far, it hasn't shaken out that way.

Consolidation in station ownership hasn't worked out perfectly either, as evidenced by the Clear Channel selloffs. But if as a result, ownership becomes more diversified, perhaps there will be more freedom in programming. This would be a welcome change from the tight formatting and homogenized playlists so common to today's commercial radio.

FMC looks forward to a positive discussion about how to make terrestrial radio more relevant (and more interesting) while respecting the commercial needs of stations. A good start would be to honor the best practices put forth in the voluntary agreements.

Anonymous said...

I suggest a better start would be for the FMC to buy a station, start an LPFM station, or make a LMA deal with a current owner. I think it would help you better understand the market pressures owners face.

In the past, many musicians have owned radio stations. The late Buck Owens owned several radio stations in the southwest. Ironically, he never required his station to play his music, or diverge from a very commercial playlist of popular hits. As a result, he was able to sell his Phoenix stations for hundreds of millions of dollars.

I think the future of music is in the ability to get music to the public, and radio is one way to do that. Operating radio stations would fit well in the FMC's charter. The money you received from the New York State payola agreement could be used in this way. Once the FMC is involved in broadcasting, we'll see what your playlists look like, and if its commercially viable. If could lead to an incredible change in programming if you're able to do something current owners can't.

Anonymous said...

Taylor Swift never generated a grass roots following that showed radio any demand for her music. Even before anybody had heard of her, her "people" announced that it was going to be "celebrityville" (and that's a quote) because the right people had been paid.
Think about it--how could a 15 year old with NO voice generate a local following? Forget about that "indie label" story?
Do you know how much money her father pumped into that indie label?
She is a product of Auto-Tune and payola...the recent turning of heads at her especially poor live performances bears this out.