FC NOW: The Fast Company Weblog
July 26, 2005
The Worst Strategy
Elliot Spitzer's announcement that the record industry has been paying disc jockeys and radio programmers for radio airplay doesn't come as a surprise to many. Payola is an old and pretty successful strategy for promoting their artists.
That strategy, while serving it's short-term purpose, is helping to destroy the industry. Payola coupled with deregulation made radio so boring that it's almost beyond belief. With cash coming in, radio programmers choose to ignore their audience and play what they were paid to play because that audience had nowhere to go. Now they do. Listeners are opting out subscribing to satellite radio and helping Apple's iTunes sell 500 million songs.
This new payola scandal obviously isn't of Enron-esque proportions despite the fact that Elliot Spitzer called a press conference and showed up with very ominous looking charts. The lesson here is what can happen when an industry continually serves the wrong master incapable of realizing what doing business as usual is costing them. Sony will pay a $10 million fine, and -- hopefully -- the radio industry will get a clue.
Posted by Kerry-Ann Austin at July 26, 2005 3:01 PM | Category: culture |
3 Comments
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The people who run the music business has some weird conceptioon and execution of the free market system. THey release 25,000 CD albums a year but concentrate spending millions of dollars on a handful of releases including bribing people to force these specific tracks down our throats in hoping repetition will cause us to buy it? WTF? Has anyone in their business explained WTF they are doing - yes, I know they want to build "superstars" but why not spread the marketing and have 20 artists selling 500,000 CD's instead of 1 artist selling 10 million CD's? Is it because they can steal the revenue from the 10 million selling artist better? Have they actually explained how & why they do business that way?
Radio is dying. Telcom Act of 1996 is one of the primary reasons. A clueless FCC is another. But the main reasons are the individual stations lacking vision and jukeboxing themselves to death. Here's a recent blog post on the subject
Chris Houchens :: Website :: Blog
The reason this keeps happening is that current law and this settlement is not directed at both the record companies AND the radio stations. If the punishment for the radio stations was the loss of their license, how long do you think the the radio stations would allow this to happen? Why didn't Mr. Spitzer go after the stations/the companies that own the stations as well?