Weapons of NAB Destruction: Music First Coalition-touted Study "Proves" That Radio Airplay Kills Record Sales!


Fred Mills

Last month a group of recording artists and organizations calling itself the Music First Coalition joined forces in order to seek royalties for their music when it gets played the radio. Their mission statement, according to the Music First Coalition website, is to “level the playing field and promote fairness among all types of radio,” adding, “Corporate Radio has had a free pass for too long.”

The movers and shakers behind the Coalition are several key recording industry groups (including the RIAA, Soundexchange, the American Federation of Musicians and the Christian Music Trade Association). Among the 100-plus musicians listed as “Founding Artists” on the website are everyone from such progressive-minded performers as Aimee Mann, Warren Haynes, Brian Wilson, the Dixie Chicks, Los Lonely Boys and the Thievery Corporation to the, er, less forward-thinking likes of Toby Keith, John Legend, the Pussycat Dolls, Mariah Carey, Jay-Z, Don Henley, Barry Manilow and Alanis Morissette. On the surface, it’s hard to find fault with anyone who’s simply trying to get paid fairly for his or her work, much less banding together — strange bedfellows or no strange bedfellows — in the hopes that strength in numbers will prevail.

In fact, for years artists’ groups have been making noises about getting radio airplay royalties, so the Music First Coalition isn’t exactly singing a new tune here. And to date, broadcasters’ organizations such as the National Association of Broadcasters (NAB) have successfully argued that without radio airplay, artists wouldn’t be able to sell nearly as many records as they do — that airplay and music sales are positively linked.

A June 15 editorial by Radio Magazine weighed in on the matter, pointing out that both sides of the issue bear scrutiny while observing that portions of the Coalition’s stance were somewhat dubious:

“Music royalties have become a major issue in recent years. The Digital Millennium Copyright Act brought many of the previous loopholes to light. The NAB has already begun its campaign against the coalition’s efforts, and if its zeal in this case matches what the NAB has done in the satellite radio debate, there will be a great deal of attention on this issue. The NAB’s rebuttal to the coalition’s announcement singles out John Legend, a member of the coalition, who also participated in a terrestrial radio promotional campaign in 2005 where the artist thanked radio for its contribution to boosting the performer’s career.

“It’s true that terrestrial radio has been able to avoid the royalty fees for music airplay, and few will deny that musicians should be compensated for their work. The Coalition artists deny that radio airplay helps them in any way, but this is not true. Perhaps a mutually agreeable royalty payment is in order, keeping the airplay benefit in mind. Unfortunately, the Internet streaming royalty situation has already shown that determining a mutually agreeable rate is a difficult task.”

Good points, all. At any rate, who exactly has been getting the so-called “free pass” that the Coalition mentions? Ever since the advent of the top 40 countdown (rumored to have been invented by cavemen who banged together the week’s most popular sticks and rocks in between cracking Cro-Magnon jokes during the Jurassic drive show), radio has exerted a huge influence upon record sales. You might even say that radio has been and continues to be a highly effective — and, if you ignore issues of payola, completely free — promotional tool for the music biz! For the Music First Coalition to claim otherwise seems disingenuous at best, and just plain friggin’ crazy at worst.

In that regard Coalition isn’t doing itself any public relations favors. Last week an interesting news report surfaced to suggest that the Coalition, if not ready to bring out the big guns just yet, is willing to indulge in a stealth bombing campaign. In a July 23 report published in the New York Times titled “Radio Listeners Seem to Buy Less Music,” a study was unveiled that purports to link radio airplay with a DECLINE in record sales. From the Times story:

“The study, written by Stan Liebowitz, an economics professor at the University of Texas at Dallas, compared record sales and music radio listening in some 100 American cities from 1998 to 2003. It found that, very roughly, an hour’s worth of radio listening per person per day, over the course of a year, corresponded with a 0.75 drop in the number of albums purchased per capita in a given city. Professor Liebowitz has proposed that people use radio listening as a substitute for buying music. The broadcast industry has pointed to radio’s power to create top-selling songs. But Professor Liebowitz said that while radio could elevate some songs above others, its overall effect was to depress the market for albums.”

Guess who’s been promoting the Liebowitz study, which was originally published in January? Yep, the Music First Coalition. Never mind the annoying little detail that those findings appear to be at odds with virtually every other similar study that’s been conducted over the years.

For example, here’s a quote from the summary section of a study Bridge Ratings LLC (which provides audience measurement and consumer behavior analyses for the radio industry), conducted in 2005 and confirmed again in ’06: “Radio airplay — especially of new music — directly and positively affects consumers’ interest in listening to and subsequently buying new music. Digital downloads are the primary media of the young and early adopter young adults, and CD sales are still the media of choice for adults, especially those with younger children.”

There is a very interesting discussion about this and related radio matters, including the future of Internet radio, at the Navigate the Future blog. One comment is worth quoting here: “Of course radio stations benefit greatly from accessibility to that music product given so generously by music labels. It is, after all, the station’s programming content. And, truthfully, those stations garner ratings that generate revenue that generates profit. True. It’s a symbiotic relationship this thing that radio and the labels have, but it works — has worked — and will continue to work. To say that radio airplay hurts music sales is a misguided statement which either needs to be recanted or at least better explained.”

Boy howdy to that. Once again, forces in the recording business are trying to build a bogeyman to blame for the industrywide decline of music sales. Artists are justifiably concerned, but in their zeal they can sometimes seem horribly misguided, or at least inadequately informed. Industry groups such as the RIAA or Soundexchange could hardly be termed oversight organizations; indeed, they wear their biases on their sleeves, even when their agendas are at odds with good fiscal sense, consumer behavior and the best interests of the artists they purport to represent.

Going the other direction for a moment, relying on “common wisdom” is risky too, of course. Once upon a time a particularly virulent strain of common wisdom convinced an entire country that a Middle Eastern dictator possessed weapons of mass destruction; you can see where that got us. Yet is there anyone on the planet other than the folks of the Music First Coalition who honesty believes radio airplay kills record sales?

On the face of it, the Liebowitz study seems suspect. There’s no mention in the Times report of additional parameters that were examined to determine what, if any, other causal factors might be behind a drop in album purchases. Were any positive correlations found between consumer behaviors (other than radio listening habits) and a drop in CD purchases? Who among the Liebowitz sample not only spent an hour a day listening to radio but also devoted a chunk of their time downloading music off the Internet for free? Did anyone report diverting some of their CD-buying funds to: DVD
s? Vi
deo games? Daily doses of grande lattes? VIP memberships in gentlemen’s clubs? No one should blindly accept (or, to be fair, reject out of hand) the Liebowitz study’s findings without knowing what the methodology behind the study was, because as we all know, selective interpretation of statistics can be employed to prove pretty much any point you want to make.

But by touting the dubious merits of the Liebowitz study, the Music First Coalition is putting itself into an interesting position, and not just because it’s blatantly trying to stack the deck in its favor (with that “free pass” comment the stench of sour grapes was already in the air). If one adopts the argument that the “overall effect” of radio airplay is to “depress the market for albums,” then why on earth would you want to devote your energies to collecting money from broadcasters? Why not just stop doing business with them altogether (sending them CDs, having on-air promotions, buying ads, etc.) since they’re negatively impacting your bottom line?

Ah, but since the correct response here appears to be to actively try to discourage radio stations from spinning your records (because according to the study, when they do, it kills sales, blah blah blah), then by taking the hard line and putting in the financial squeeze — re: the royalty grab — you’ll eventually alienate broadcasters to the point that they’ll want nothing to do with you or your product, right? And as soon as “Corporate Radio” stops playing your artists’ music, you’ll stop seeing a decline in your artists’ record sales, right?

Yo, crazy like a fox, that Music First Coalition!

You know, I worked in a record store from 1992 to 2001, so I was on hand for a good chunk of the music industry’s alterna-era boom as well as the post-Napster bust. One thing remained constant throughout that period: Local radio airplay always, without fail, affected our sales. It didn’t matter if it was a new artist whose song got added to a station’s rotation or an older artist who had a back catalog track played a few times: customers would always come in, looking for the record in question. And I guarantee you that same scenario continues to play out, every day, in every city, across America.

Good luck finding those weapons of NAB destruction, folks. This has been a public announcement — with guitars.