Makin’ Money On The Air Waves! The Business Of Commercial Radio… By The Numbers

June 20, 2014  |  

Angie Martinez lit a firestorm on social media after jumping off the Hot 97 ship and joining her rival station, Power 105.1 — home of The Breakfast Club. Ooh! Scandalous. These h**s ain’t loyal!” Twitter said of Martinez’s mutinous move, quoting Chris Brown. That joke would have been funny — if that damn song wasn’t so overplayed on hip hop stations like Power 105 and Hot 97. But that leads me to my next point — why do we hear the same songs over and over again? What’s going on behind the scenes of commercial radio?

In essence, what does Martinez, the  “Voice of New York,”  know that we don’t know? Let’s delve into the business of commercial radio… by the numbers, shall we?

How many times have you parked your car on Pharrell’s “Happy” only to come back, two hours later, to “Clap along if you feel like happiness is the truth!” The most popular song last year, Robin Thicke’s “Blurred Lines,” was played nearly 750,000 times. To put it into perspective, that’s almost 2,100 times a day — just enough to make you rip your ears off.

And it’s getting worse. Today’s top 10 songs are being played almost twice as much as 10 years ago. The top song in 2003, “When I’m Gone” by 3 Doors Down, was played just 442,000 times, according to MusicFirst. Why are radio stations pestering us to death with the same songs?

Well, contrary to popular belief, record labels are not paying off FM radio stations — well, at least not directly. According to HowStuffWorks, it’s illegal to pay radio stations for airplay. There is, however, a loop hole: If you bring a middleman into the equation, record labels are technically not breaking the law.

These middlemen, known as independent promoters, approach radio stations with a generous cash package — usually a payment of $75,000 -$100,000 per year. “Hey, pssst! If you play ‘Happy’ ’til your listeners’ ears fall off, I’ll give you ‘promotional support’ in the form of cash, vacations, prizes, and gift cards.” And of course, the radio stations usually accept the offer.  “Because the ‘gifts’ are to be used for promotions, the pay-for-play is side-stepped,” HowStuffWorks adds.

The indie guy runs back to the record label and says, “Hey, I got the station to play your song, now where’s my money?” Holding their end of the bargain, record labels pays the middleman between $100,000 and $250,000 for each song initiated into the station’s playlist. These indie promoter fees, by the way, comes out of the artists’ royalties. So if you thought Robin Thicke and Pharrell were making a mint off airplay, you were so wrong. By law, broadcast stations are only required to pay the songwriters and publishers, not the artist.

Many nations around the world require radio stations to pay four entities (song writer, publisher, performer, and recording owner). The United States, Rwanda, North Korea, and Iran are the only countries that don’t.

But don’t worry, American singers still win somehow. They might not get paid by the stations, but more airplay means increased CD and digital sales. And though FM radio does not pay artists, Pandora and SiriusXM do. Wiz Khalifa gets paid $1 million a year from Pandora. Drake and Lil’ Wayne pocket $3 million annually, according to The Huffington Post.

And here’s another reason why you keep hearing Chris Brown whine about disloyalty: Did you know that only four companies own 62 percent of the country’s top 40 stations?

“Media consolidation has heavily affected the balance and diversity of today’s music on terrestrial radio. This is great news if you’re Drake, Lil Wayne, Lady Gaga and the like, but not so great if you’re just about anybody else,” HypeBot wrote. These big-name corps, like Clear Channel (which happens to own Power 105.1), control everything the listening public hears.

Though digital services like Pandora are growing, Clear Channel and other large radio corps still have a good grip on the listening public — 35 percent of Americans listen to AM/FM radio. Pandona, SiriusXM, and Apple iTunes only grab nine, four, and three percent of the population, respectively.

As for Ms. Martinez, she made the right career move. With the growing popularity of The Breakfast Club, which just inked a deal with Diddy’s Revolt. Who wouldn’t want to align themselves with the likes of Sean Combs? With that being said, I leave you with this:

When 105 wants ya & hot 97 can’t do nothing for ya ..ahhhh Angie Martinez ain’t loyal,” a Twitter user jokes.

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