How do royalty payments work for songs played on the radio?

Question

I've always wondered...i always thought artists got paid when their songs were played, but i'm sure radio stations don't keep little tally sheets and send $.50 checks every time they play a song...curious. Thanks!

Answer 1

We used to, but it's all automated now. Years ago we had to keep a log of every song we played once a year - what a pain. Now it's mostly automated by MediaBase and other companies. A signal is encoded into the music and picked up by monitors all over the country. Then it's reported to anyone who wants to subscribe: including labels, artists and licensing authorities like ASCAP & BMI. From there the royalties are asessed according to airplay and the size of the station and the market.

I have consolidated a couple of my previous answers into this rather long discourse about royalties, file sharing and so on if you care to know more:

ASCAP, BMI & SESAC collect royalties only for writers and publishers, NOT labels or artists. Labels and artists get their money from sales - that's why the big push against illegal downloading and file sharing.

And just for the record, radio stations, though they try to keep good relations with labels, do not pay for, nor receive pay for airplay - nor care what the labels think. Labels don't get rated - listeners do. And radio is judged on ratings. That's where the ad dollars come from.

Radio and records for years had enjoyed a synergistic relationship. We'd play those songs we thought fit our station and had potential. Those songs would become hits (or not - it always was in the grooves).

The artists and labels would benefit from the incredible exposure the records would get with airplay, sometimes in multiple formats, as their songs sold. If an album was strong enough to sell several singles, people would buy the entire album and gain more exposure for the artist and label.

RIAA (The Recording Industry Association of America) has recently been pushing very hard for an additional fee for the artists AND labels. The labels and artists have, in the past, been content with the relationship that radio and records has always enjoyed.

Because times are tough and the entire paradigm of the record business has changed, with artists becoming successful on their own through the internet, downloads, sharing and the like, labels are hurting. Because of the paring of ad budgets radio stations are hurting.

However, with downloading, both legal and (mostly) illegal, you who participate in this practice have deprived poor Toby Keith, Mick Jagger and others darn near into the poor house to hear them talk about it.

So the labels have asked their representative organization the RIAA to find a way to get stations to pay for airplay. After all they say ASCAP, BMI and SESAC collect royalties for the writers and publishers, why shouldn't we get a piece of that? Well, because writers and publishers don't press/duplicate, distribute, promote and sell records in stores - labels do.

Nevertheless, a new law has just passed a legislative committee and will be headed for both houses to see if radio will be burdened by more fees. If they are, you can kiss a lot of your music stations good bye as they will switch to non-musical formats or only play those songs from the artists themselves who are willing to forego the fees. And you can expect a long, protracted and ugly battle among two industries whose interests used to be shared and amicable.

So radio says, fine, if they want to pay three times the average rate for a 60" commercial each time their 3' song is played (and it's not payola if you announce it's paid), we'll pay your royalty – but the ad revenue will be much higher than any royalty. So there's a bit of a bladder-emptying competition right now between the two.

Those who previously were happy to work together to promote good music got greedy. A top-selling album, even with all the free downloads will still make a lot of money if it's in the grooves - if the "sound is there."

Couple that with the additional revenue and exposure the concerts and other paid appearances bring and we in radio think the labels and performers are doing just fine – if they’re not, it’s their problem to fix, just as radio’s problems are ours to fix. We haven’t gone to the labels for a bail-out, why are they coming to us?

And we'll go buy our own records if they complain about providing promo copies - this, however would lead to very little newer music played, especially in the bigger markets. And don't look for anymore free publicity for a few measly tickets and T-shirts in return for thousands of dollars in airtime and the privilege of saying we're "presenting" the show.

More and more artists are coming directly to web sites and radio stations without labels, because you are in virtual slavery for the first few albums. Like everyone else, the labels and artists must get used to a different world and find other ways generate incremental revenue.

For those who have and continue to illegally download and "file share" (which is just computereeze for stealing intellectual property), this is what has happened as a result and that's why you see so many commercials against the practice., so please don’t do it. This does not count iTunes and the other legal, paid download services.

Adapt or die (or something like that)

---Darwin

A guy named duh

Answer 2

I thought the artist payed the radio station each time there song was played

you know kinda like an ad for there song