Ground Up: Kill Rock Stars President Explains Majors' Radio Relationship and Spotify's 'Crappy' Stream Rate
Kill Rock Stars president Portia Sabin sat down with Weena, a teenage "punk puppet" and co-host of educational YouTube series The Media Show, to explain in simple terms why an indie label as prodigious as hers -- its roster over the years has included Elliott Smith, the Decemberists and Sleater-Kinney -- can't get airplay on traditional radio.
According to Sabin, it comes down to advertising, access and cash, with radio stations only playing the most popular songs over and over again in order to snag listeners while driving. "If people hit the scan button and they don't hear the song [they want], they're going to push that button again until they find that song," Sabin says. "So it behooves radio stations to play the same songs -- the really popular songs -- as much as possible."
A market research process that Sabin calls a "weird, black magic soup" helps determine which songs will be a hit, "but once they've chosen that song and they've decided it's popular, they play it so often in order to get as many ears on the radio possible."
Sabin explains that major labels have special relationships with radio station gatekeepers that goes back decades. "A person like me doesn't have access to that radio program director," she tells the exasperated puppet. "I can't get them on the phone. I can't get them to return my emails. And what has happened over the years is the marketing companies have sprung up saying 'we're radio specialists, we'll get your music in front of those program directors.' It doesn't work."
She mentions that her artists do really well on streaming radio like Pandora because "people want to hear the music that we have," adding, "If it were a level playing field I feel like we would dominate in terrestrial radio too."
Sabin also compares major label radio campaigns to payola, saying that "someone who shall remain nameless" told her that it costs upward of $4 million to get a song played on commercial radio.
In a second part of her chat with Weena, Sabin switched the conversation to streaming services -- specifically Spotify. Here's that full exchange:
"One of the more scary parts of the internet is that it has provided a funnel to take venture capital money and shoot it through right back to the major labels. So for example Spotify, they get hundreds of millions of dollars from VCs to start themselves up, then they go directly to the major labels and they say 'we want to license your catalog'… and the labels say 'great! give us $100 million.' So they give them $100 million. Here's the real kicker. Spotify also gave the majors stock in the company, so they have ownership, and they negotiated the terrible per-stream rate… and the reason they did that is the giant advances the majors got are not recoupable, they don't have to pay the artists any of that money. All they have to pay is the crappy per-stream rate. Then, when Spotify came to the indies, we don't have someone who represents us -- well, Merlin does, but in general, we're 10,000 indies. That's the nice part of consolidation for the majors -- there's only three of them. So Spotify just goes to three guys or women and then to 10,000 indie labels, Spotify just says eh, you don't get advances but you can have this crappy per-stream rate. So, we're left with the crappy per-stream rate, we don't have advances and that's the end. And all that venture capital money went right back to the majors. Thanks Internet!”