Online music services and payola
April 23, 2009
Book editors Patrick and Teresa Nielsen Hayden, who are involved in educating would-be authors about scammers who who would defraud them by posing as reputable publishers (rather than as the vanity presses they are), frequently quote Yog’s Law: Money should always flow towards the author. The music industry variant seems to have historically been, “Money flows towards the artists, but not if we can help it.”
But that’s no longer true, it seems. Recently, two streaming music services instituted pay-for-play schemes: $30 on Jango, and $200 on last.fm, buys you 1000 plays of your music, slotted between songs by the established artists of your choice. There’s a great overview article here.
I’m all for doing things differently in the brave new world of online distribution for artists, and part of that is thinking of new ways to get your music out to listeners who might like it. But I am fundamentally wary of any business model that puts the best interests of the company (in this case, making money from selling music slots) in opposition to the the best interests of the user (hearing music they like), rather than aligned with them. Maybe I’ve just been hanging around with Paul Lamere too much, but it seems like a more sustainable model would be to get the music recommendation part right first, and try to monetize it afterwards.
I’d be interested in knowing what others think about this. Please share your thoughts!
zed equals zee 
Payola is alive and thriving in the music industry. It was only a matter of time before the model spread to Internet radio as well. (I work for an indie label that mainly deals with college and non-commercial stations, and the stories I could tell about when our last release was at radio would curl your toes. We didn’t even consider doing anything we were asked to do, mind … but I can’t even imagine what we would be dealing with if we serviced mainly to commercial stations!!)
The sad fact is, up-and-coming musicians are often forced into a “pay to play” scenario, whether it be to get themselves an opening slot on a national tour (those big headlining artists aren’t carrying openers out of the goodness of their hearts) or even to get into the open mic at the neighborhood bar. Online, this has spread to shelling out big bucks to get tracks featured on iTunes or MySpace Music … and really, what Jango and Last.fm are doing is pretty much just an extension of that.
Does it suck? Yes. But that said, did I find myself thinking “hmm, $50 to get my artists’ tracks featured on a service that many potential fans are listening to? That’s not a big expenditure, and potentially we could see that back in a few days if enough people were moved to go to iTunes and buy the track after hearing it”? Yes. Sometimes you have to face your current reality until change finally comes.
Meredith, thanks for your thoughtful response. You raise a really interesting point – unlike the other payola situations that you mention (radio, open mics), there’s a direct feedback loop for online music – you can see in a very short time whether or not it was a good investment. Interesting.
That feedback loop is similar to the one you get if you invest in online banner ads on the music blogs — you know exactly how many people clicked through from where, it’s very useful.
Thinking about all this more, I’m wondering where the “payola” line is in general … is paying for placement on Last.fm really any different from running an ad in a music magazine for the issue dated the month when your CD is out for review? It’s a sad-but-true observation that running ads increases a label’s chance of getting their titles reviewed in a particular issue of a magazine.
There are so many fine lines and grey areas in all of this, it’s really quite mind-boggling.
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[…] Interestingly, Watts and Salganik followed this study with an even cleverer one that suggests that manipulating the ‘charts’ in this way does kind of work, but results in fewer downloads in total. As Clive put it: “If you lie about the merits of your product, you might suppress demand across your entire sector.” Gee, I wonder if that’s ever happened in music…? […]