think of the long-running (but now defunct) trade journal Radio and Records and see the radio industry as part of a broader music industry that includes such actors as instrument manufacturers, live performance promoters and venues, and most important of all, the recorded music industry.Read more at location 489
Consider that it is rare for a person to walk into WalMart or Best Buy or to log onto Amazon or iTunes and purchase music that they have never heard before.Read more at location 493
most of the time we buy music based on having been exposed to it through broadcast media, especially pop music radio.Read more at location 496
“There is no better guarantor of a band's success than a hit single on the radio luring listeners into record stores to buy the album.”Read more at location 500
Our taste in cultural products is profoundly, even dominantly, shaped by perceptions of popularity, which we interpret as a signal of quality.2 When radio stations play music, they are not just making us aware of songs, but suggesting that they are already popular.Read more at location 504
supposed impartiality of gatekeepers like radio stations makes their endorsements more valuable than advertising.Read more at location 507
The most basic practice is that record labels deluge radio programmers and other workers in the music industry with promotional copies of CDs in the hopes that they will be impressed by the music and give it airplay and other exposure.Read more at location 509
Ultimately though, the most direct way to get airplay is to bribe a radio station (or its employees) to play your music.Read more at location 514
The most direct form of payola is simply a quid pro quo where a station (or the station's staff) agrees to play a particular song in exchange for cash, intellectual property rights, drugs, or sex.Read more at location 521
In the remainder of this chapter I will first review each of the four broadcasting-era payola scandals.Read more at location 533
Finally, I use game theory to explain why the natural equilibrium of the music industry is to be characterized by payola, even though the recording industry would prefer to be free of the expense.Read more at location 537
when payola is common, record labels have more control over song selection and, conversely, song selection is relatively exogenous to the system of radio stations.Read more at location 760
songs known to have involved payola do have the expected pattern of especially exogenous diffusion curves.Read more at location 763
This implies that even without direct documentary evidence of payola, its prevalence can be inferred by analyzing the diffusion of songs.Read more at location 764
Since the record industry is the most plausible source of exogenous influence on the song choices of radio, the metric can be interpreted as the degree to which the record industry has influence over radio.Read more at location 784
Not surprisingly, when Spitzer first demanded documents the music industry appears to have panicked and perhaps ceased not only payola practices for which a court might find grounds for conviction, but also promotion practices that while perfectly legal could still be framed as shameful by a notoriously zealous prosecutor. Such a freeze-up is reflected by the almost zeroed-out rate of exogenous patterns of adoption immediately after the subpoenas.Read more at location 797
The most fundamental question is why the payola market continually reestablishes itself and who benefits from the system.Read more at location 842
It makes sense for stations to accept this payola if they expect that the value of the bribe is greater than the loss of advertisingRead more at location 848
However, when payola is an accepted business practice it can be an implicit part of compensation which is fungible with direct station expenditures, and may even be preferable for management as it evades taxes,Read more at location 852
In any case, it's unlikely that a radio station would be asked to take a bribe to play a really unappealing record, since a reasonable record label wouldn't want to waste money promoting music that they know to be terrible.Read more at location 859
A bidding war for airplay breaks out and this eventually leads to rent dissipation, with the cost of payola equaling the marginal benefit of airplay and this cost being so high that nearly all profits from the recording industry are captured by broadcasting. At this point the volume of the illicit payola market attracts the interest of the state and/or the recording industry grows frustrated and attempts collective action. Whether by state or by trade group, such a response temporarily suppresses payola and brings the system full circle.Read more at location 864
The clearest illustration of the cyclical nature is the situation before and after the 1986 RIAA boycott of indies.Read more at location 873
Thus, payola is something that begins as a bribe paid by labels and artists, but can quickly end up as extortion demanded by broadcasters. A particular record company can benefit tremendously if it provides payola and its rivals do not,Read more at location 902
However, once payola becomes universal all the record companies pay a high price and have no net promotion advantage for doing so. This incentive structure is the familiar prisoner's dilemma, where an actor's best outcome is to cheat while its partner behaves, followed by them both behaving, followed by them both cheating, and worst of all is for the actor to behave while its partner cheats.Read more at location 904
The only solution to the prisoner's dilemma is collective action over repeated interaction, but even this is tenuous.Read more at location 910
Unfortunately for musicians and the record industry, cartels are extremely vulnerable to cheatingRead more at location 915
