Payola, JUST What We Needed

Good Morning!

They say "no news is good news". If that is the case, we could sure use a little "no news" In just the past 24 hours alone!

(From The NY Times) Radio Payoffs Are Described as Sony Settles

(from R&R) Commissioner Wants FCC Payola Investigation

And this from FMQB:

New Study Says MP3 Players Negatively Impacting Radio. PlanetJam predicts that MP3 player ownership will double over the next year, moving its penetration past 30 percent of radio listeners. Also, they conclude that MP3 player usage is having a net negative effect on radio TSL. The company recommends that stations "embrace podcasting and fill listeners' MP3 player with unique station content they can listen to at their convenience."

While our competition receives this headline from yesterday's LA Times,

THE BIG PICTURE
XM radio: It's out of this world.
In an era when any kind of music is available for download, Lee Abrams is radio's unlikely savior.

Just what we needed, another bit of negative press that positions our industry in a bad light. If the radio industry as a whole were a single radio station we would be asking for a call letter change! Just something to get rid of all the "baggage" commercial radio seems to have picked up over the past few years.

And now there is a call for an FCC investigation. Great! - Just great!

Now you and I both know that radio companies have taken a hard line on Payola/Plugola. Most (if not all) have well established policies regarding record company relationships. If anyone violates the policy, they are out the door. Period! I just read the 59 pages of "evidence" collected from the NY Atty. General. Is there smoke? Maybe!. (read it here if you want)

Are there "bad" radio station program and music directors? I suspect there are. No matter what the company policy, or the FCC and others uncover, there will always be a few that will try and benefit from the system. Free trips, Plasma TV's, comp hotel rooms for the PD & significant other, are always going to be an alluring prize. Especially to an underpaid, unappreciated, and overworked PD. (Don't get me wrong, I am NOT justifying bad behavior. You "take", you are "fired." - case closed)

Most Radio Companies & Program Directors are hard working, honest people. I'm more worried about the "system" that creates bad programming for the sake of the station. Well intentioned station program directors that PLAY BAD SONGS in some pumped up rotation in order to get money for marketing and promotion. It's a messy, smelly system. It's rife with danger. It is an invitation for abuse. I know radio station program directors are NOT required to "play for pay". They don't have to do ANYTHING for the promo money that is sometimes offered to stations in exchange for some nebulous "add info" for the week. In other words, if you let me know ahead of time (and before everyone else knows) what songs you are adding this week, I will give you money for that billboard campaign, web site, t-shirt, direct mail, or other marketing expense. In some cases, in a few major markets, on a few "key" stations, this money can add up to hundreds of thousands of dollars! (one time, about X years ago, I uncovered an independent record promoter payment for the mid-day jock's CHILD DAY CARE!)

This is like you and I getting money from food companies for telling them what we will be eating in the coming week. Perhaps the Beef Council would pay your electric bill in exchange for knowing (in advance) how much chicken you will be having for dinner? If I was getting a few of my bills paid by the Beef Guys every week, I MAY consider eating more steak. Would they pay my mortgage? There are NO guarantees, but I MAY consider a nice cheeseburger for breakfast once in a while! Hey! I got bills to pay! Whether my family likes beef or not!

My concern is the amount of money being paid for this service has/is replacing station marketing/promotion budgets. Well intentioned PD's in a quest for increased outside visibility, will consider playing certain records (overnight or otherwise) that are not on target with the listeners. Remember, listeners don't get the memo. All they know is, you're not playing the "best" music available. Certain songs are on the station because PD's are "doing what it takes" to market the station.

Many station "brands" are suffering because they are NOT given the proper marketing money to grow an audience. At the same time, the competition is spending "big time" in an effort to garner more TSL from guess who? Yep, it's us.

Our expectation of brand revenue performance is assumed. Marketing or no marketing, some stations that are starving for the proper advertising budget in order to tell listeners who we are, and, what we play. Many stations simply can't get ratings unless there is a consistent marketing campaign. We all know this. But in order to make the cash flow number, some station operators (not all) replace marketing budgets with "inde money". Hence, the smelly system.

Because of the FCC/NY State Attorney, perhaps record companies may now change their marketing plans. Legitimate promotions in the context of great radio marketing? Sure, every radio station should be working with record companies to do fun, interesting promotions. Here's another idea! maybe they can just BUY TIME TO ADVERTISE on our stations in order to make the public aware of the latest hit. That could be an option. Then stations could afford to advertise "on their own!" It would sure solve a lot of issues in current based music radio today. And WE could use a little "good" news.

Your response is always welcome!

Fig