“Radio play does not have the positive impact on record sales normally attributed to it. Instead it appears to have an economically important negative impact, implying that overall radio listening is more of a substitute for the purchase of sound recordings than it is a complement.”
Hmm. Who’s saying this? MusicFirst. Basically the entire US music industry (it’s supported by SoundExchange and the RIAA). It’s all part of their campaign to get US radio stations paying fees for broadcasting their artists. Unlike the UK where radio pays the writer of the song (PRS) and the perfomer/record company (PPL), in the States they just pay the PRS element and the industry are fighting back.
Whilst I don’t necessarily disagree with the campaign, the way that the US recording industry is doing it, is very, very scary. That quote at the top of this post shows their true feeling about radio.
Nowadays there’s lots of different types of services using music and they’re licensed on scale that comes down to how much of the service is promotion vs substitution of the material. If it’s substitution then the industry looks for compensation of that lost sales, if it’s promotion then it looks for less of a fee. Historically radio has been seen very much at the ‘promotion’ end of the spectrum and has just paid a flat fee – a percentage of its total revenue. I think this kind of campaign shows the true desire of the recording industry, this campaign really is the thin end of the wedge.
It’s also interesting to see SoundExchange’s response to the sale of Last.FM, who suggest they should get a cut of the sale price.
What can be done? Personally, if the record industry thinks there’s no value in radio airplay, perhaps we should arbitrarily choose a record label and stop playing their music? It would be interesting to see if their stance changed then.