Wednesday, April 29, 2009

FMC Releases "Same Old Song" Playlist Analysis Report

Have you ever been scanning through the music rags at your local bookstore/music retailer/coffee emporium/tchotchke outlet and wondered, “why do I never hear this band that’s on the cover of all of these magazines on my local radio station?”

We’ve scratched our heads about this, too.

There are quite a few independent acts out there that are successful by pretty much any other measure — they sell out venues, play Saturday Night Live, can be heard on movie soundtracks, TV shows and commercials yet never seem to crack commercial radio playlists. After a while you start wondering if there’s a reason. Turns out there is – it’s just sort of complicated.

But don’t worry — FMC lives to sort this stuff out. To that end, we’ve just released a major new study of what gets spun on radio called “Same Old Song: An Analysis of Radio Playlists in a Post FCC-Consent Decree World.” Before we get into the results of this data-driven report, let’s look at some of the history. (If you wanna dive in, click here).

Same Old Song” analyzes radio playlists from 2005-2008 to determine whether the policy interventions resulting from the recent payola investigations have had any effect on the amount of independent music played on terrestrial radio. Back in 2007, Federal Communications Commission issued consent decrees against the nation’s four largest radio station group owners – Clear Channel, CBS Radio, Citadel and Entercom – as a response to collected evidence and widespread allegations about payola influencing what gets played on the radio. In addition to paying fines totaling $12.5 million, the station group owners also worked with the American Association of Independent Music (A2IM) to draft eight “Rules of Engagement” and an “indie set-aside,” in which these four group owners voluntarily agreed to collectively air 4,200 hours of local, regional and unsigned artists, and artists affiliated with independent labels.

Using playlist data licensed from Mediaguide, FMC examined four years of airplay – 2005-2008 – from national playlists and from seven specific music formats: AC, Urban AC, Active Rock, Country, CHR Pop, Triple A Commercial and Triple A Noncommercial. FMC calculated the “airplay share” for five different categories of record labels to determine whether the ratio of major label to non-major label airplay has changed over the past four years.

Guess what? The number crunching indicates almost no change in station playlist composition the four years we examined. Specifically, the national playlist data showed little measurable change in airplay share from 2005-2008, with major label songs consistently securing 78 to 82 percent of airplay. There was a slight increase in airplay for indies on a few formats (Country and AAA Non-Commercial, in particular) but otherwise the data from year to year stayed pretty much the same.

But we didn’t just look at these big meta trends — we dug in and also examined airplay by release date. This showed that many formats leave only small portions of their playlist for new material, with current songs sprinkled in among well-worn hits. While such programming choices might make sense for a given station’s target audience, the outcome is that there are very few spaces left on most airplay charts for new music. Looking specifically at airplay for new releases, we found that new major label songs typically receive a higher proportion of spins than new indie label songs. Finally, we looked at the indie labels themselves, and found that only a handful have enough resources and clout to garner airplay consistently. For the remainder of indies, airplay is infrequent and modest, if it happens at all.

The fact that indies are still having a tough time getting airplay is something a recent survey of A2IM independent label members indicated in a more anecdotal way. The major labels’ built-in advantage, combined with radio’s risk-averse programming practices, means there are very few spaces left on any playlist for independent labels, which comprise some 30 percent of the domestic music market. Remember, this is after well-intentioned (if nonspecific) attempts to address this imbalance.

So what’s the take-away? How might the situation between radio and indies be improved? Our new report offers a handful of policy recommendations that might prove useful to the FCC’s oversight of the airwaves and improve the radio landscape for both listeners and the broader music industry. In particular:

1. Improve Data Collection

The radio and music industries participate in and employ some of the most robust and timely data monitoring systems available. There are private companies that measure audiences, that keep track of radio ownership transactions, market share and revenues, that track retail sales and box office grosses, and at least three services that monitor what is being played on commercial and noncommercial radio. Many radio stations, music labels and advertisers subscribe to these services so they can get up-to-the-minute information about their own activities, and those of their competitors.

In other words, radio stations are already very data rich. What’s now required is the political will and organizational capacity at the FCC to determine what questions need to be asked, how frequently, and of whom, and then to seek out or collect the information it needs to be an effective regulator. Nonprofit organizations like FMC have been conducting much of this oversight work on behalf of the public interest, but clearly the FCC needs to play a greater role. The FCC could acquire data from commercial sources, or it could request data from stations as part of their responsibilities as broadcast licensees, or some of both. Regardless of the method, the FCC needs to clarify its oversight role, then rigorously and consistently monitor what’s happening in radio in order to craft more effective policies and enhance accountability.

2. Refocus on Localism

Both anecdotal and empirical evidence indicate that commercial radio has become a risk-averse media that employs cookie-cutter formats across many radio properties. In recent months, commercial radio has also been the source of layoffs and downsizing as it struggles with both reduced ad revenue and huge debt loads racked up during the station buying spree following the passage of the 1996 Telecommunications Act.

The radio industry is clearly in crisis. Stations have lost touch with their local markets, but unfortunately, the industry seems to have responded by pushing for greater consolidation and syndication. FMC believes this is the wrong way forward, as radio’s chief advantage in the modern media landscape is “live and local.”

We join others in the media reform movement – and many in the radio industry itself – in calling for commercial radio to regain its local foothold and build programming in which serving its local community is its primary goal. We also simultaneously call on the FCC to revisit the localism proceeding and design clear guidelines about how to measure whether its licensees are honoring their obligations to the communities in which they operate.

We know that locally oriented programming isn’t as cost-effective as running a station using pre-programmed playlists and automated DJs, but it is radio’s strongest asset in an increasingly saturated media environment. FMC and our partners have engaged in pilot projects with small commercial operators to determine best practices for engagement between programmers and the independent sector to set goals and identify mutually beneficial marketplace solutions, and we hope that these projects help us to convey information that other stations can use in the future.

3. Expand the number of voices

This report also shows us that major swaths of the music economy aren’t currently represented on commercial radio. It outlines the many structural barriers to airplay for all types of labels, but for independent musicians in particular. Using other metrics to measure the profile of some indie artists, including retail and digital sales, TV appearances, large live shows, and licensing deals that place their songs in movies, video games and in ads, the lack of airplay on commercial radio for the same artists seems counterintuitive. Independent music belongs on commercial radio and is just as vital as the music currently receiving heavy airplay. Changing the prevailing culture at commercial radio will take a concentrated effort with all parties working in good faith basis; identifying structural barriers to airplay in this report represents part of this ongoing effort.

Finally, this also moment in time when the government can make a conscious effort to expand the number of broadcasters in this country. The passage of legislation to allow Low Power FM in more American towns and cities would provide local groups and organizations with an opportunity to serve their communities.

Feel free to let us know what you think!


Anonymous said...

The thing I find so strange is how the FMC is so concerned about payola, yet supports the RIAA's reverse payola scheme, designed to charge radio for airplay. How much of that money will be given to indie labels? It will be another case of the rich getting richer, and the poor being completely shut out. Yet the FMC thinks it's a good idea.

The ONLY way for the FMC's goals to be implimented is for money to be taken out of the equation. No money for airplay. No royalties. No advertising. No ratings. No membership. Everything is free. Because once money is put into the equation, then quality goes out the window. The focus is about attracting money. That applies to the music side as well as the radio side. How many songwriters have had their work influenced by the idea that they would make more money writing a radio friendly hit than by writing something with real feeling and emotion. So take money out of the equation. No money for music, no money for airplay, and it all becomes based on quality. Everyone makes their money from doing something else, and music and radio becomes a hobby. Get rid of the professionals in both fields. That's how the FMC will get what it wants.

FMC said...

Remember when our new President was inaugurated and said in his speech something to the effect of "we reject as false the choice between our safety and our ideals?"

Well, to steal a bit of that thunder, we reject as false the notion that you can't engender localism and diversity on commercial terrestrial radio while simultaneously compensating the performers whose music is used to attract ears and advertising dollars.

And lets look at the Performance Right a bit more clearly: approximately half goes to the performer(s); approximately half goes to the sound copyright owners (often the label, but it could also be the artist). Now, that means indie labels, too, which is why the American Association of Independent Music (and FMC) support this right. If the underlying composition is the only thing worth paying for the use of, the DJs and PDs should feel free to just sing the song themselves over the air.

Upholding the FCC's stated principles of localism, competition and diversity on the public airwaves is an entirely different issue.

And if we're talking about money in the business, well, it seems as though radio has ignored a lot of music that clearly has marketplace demand. Play-it-safe programming that ignores local and regional successes, niche flavors and Top Ten selling independent acts seems strange considering commercial radio is having trouble retaining listeners.

We believe that radio has so much to offer. There just needs to be a change in mindset. This includes playlists that reflect localism and diversity as well as an acknowledgement of the need to compensate the talent that will help breathe new life into a struggling medium.

That's not "reverse payola," it's common sense. Of course, broadcasters can keep on doing what they're doing because those post-Telecom Act strategies have worked out so well. . .

Anonymous said...

The RIAA is saying that there is no value in radio airplay. That's their justification for the new royalty. They say airplay doesn't sell records, and doesn't help artists. They've produced a study from the University of Houston that supports their case.

Obviously the FMC doesn't agree.

By the way, there is nothing in the law that requires diversity or localism in musical choice by programmers. And nothing being discussed by regulators that would, in any way, require it.

FMC said...

Actually, it does seem like the FCC is interested in finding ways to enhance localism and diversity on the airwaves, and are even gearing up to collect and assess data on the composition of broadcast ownership t determine the level of female and minority license holders.

This doesn't have to do with music per se, but it does reflect an interest in living up to the principles they often espouse.

We think it would be interesting to see marketplace solutions that play to radio's strengths — its ties to local communities, as well as a more open-minded understanding of the entertainment marketplace that takes into consideration the level of interest in independent music by consumers.

The indie community just needs a willing dance partner. . .

Anonymous said...

Could you respond to this comment:

The RIAA is saying that there is no value in radio airplay. That's their justification for the new royalty. They say airplay doesn't sell records, and doesn't help artists. They've produced a study from the University of Houston that supports their case.

Obviously the FMC doesn't agree.

FMC said...

Honestly, you'd have to ask RIAA about that study -- we didn't have anything to do with it.

We CAN say it's a bit unseemly that the US is one of the only developed nations that fails to compensate performing artists for the use of their music on terrestrial radio.

It's also important to remember that artists would directly receive their portion of the monies from this right (meaning it wouldn't go to the label to be held against their debt). This is something of an advancement in musician compensation, and would be a welcome addition to many artists' revenue streams.

Another thing to keep in mind is the fact that online stations pay a performance right, which amounts to a competitive advantage for terrestrial radio. (Maybe if they didn't have this advantage, they'd be more creative with their programming?)

But at the end of the day, it's about compensating the artists who breathe life into the compositions. We think terrestrial radio can be both fair to artists and return to being beacons to their communities. It'll happen eventually.

PS: We still encourage non-anonymous comments.

Anonymous said...

"We CAN say it's a bit unseemly that the US is one of the only developed nations that fails to compensate performing artists for the use of their music on terrestrial radio."

The US is also the only country that has payola laws. In fact there are many rules and laws where the US is the only country in the free world. That's what makes us the greatest country in the world, and why so many people want to live and work here.

"Another thing to keep in mind is the fact that online stations pay a performance right..."

Which has caused many online stations to either go out of business or charge listeners a fee to hear music. Radio is free. I think online stations would love the opportunity to play music for free, but that option was taken away from them.

The main point is that terrestrial radio provides artists free airplay of their music. Obviously the FMC seeks additional free airplay of music. That indicates to me that the FMC believes there is value in free airplay, which is the NAB's main point. If the FMC agrees that there is value in free airplay, they should revise their position on the performance royalty.

FMC said...

We never said anything about "wanting additional free airplay." What we want is for the broadcasters to find a way to work WITH the independent community in order to better reflect the realities of the rest of the music marketplace.

And also properly compensate performing artists for the use of their music, as on other platforms and in other countries.

Stations can't suddenly become "local" only when it benefits the NAB's lobbying position. They either are or they aren't. Music (and the artists who create it) either has value or it doesn't.

We believe radio's strengths lie in localism and that performing artists deserve compensation. It's not really all that complicated. ;-)

FMC said...

One more thing — your "promotional" argument would have more weight if commercial broadcasters weren't so risk-averse. As the data in this new study illustrates, the vast majority of music played on commercial stations is from years past. I guess the surviving members of Lynrd Skynrd can count on the promotional aspect of the multiple spins of "Sweet Home Alabama" on commercial radio when they do a summer nostalgia tour, but there are a lot of talented young artists who have zero relationship to radio, simply because there's no room for them on the playlists.

FMC said...

Not that there's anything wrong with Skynrd. We love us some Skynrd. Just sometimes wish we'd hear a different cut, is all.