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In An Ever-Changing Music Industry, Cash For Hits Remains A Constant

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Radio DJ Alan Freed in the 1950s. Freed's pioneering career as a champion of rock and roll was marred by the revelation that he'd accepted "payola" — money from labels to play certain records.

As long as there has been a music industry, there have been attempts — both overt and clandestine — to manufacture hits. You can look as far back as the early 20th century, when musicians known as "song pluggers" were paid to promote sheet music.

During radio's golden age, commercial brands during radio's golden age often produced and underwrote live broadcasts, says media historian Cynthia Meyers.

"There were no advertisements during the music program," Meyers says. "They hoped that the audience would feel very favorably toward them for financing free radio programming."

Television took off in the '50s, taking with it sponsors and stars. But radio remained vital thanks to disc jockeys like Alan Freed, who introduced audiences to new music — including rock 'n' roll.

As DJs became influential tastemakers, record labels plied them with cash payments and gifts in exchange for airplay. Media reports of these operations eventually led to congressional hearings. Hundreds of DJs were implicated and Freed was eventually fired and fined.

In 1960, Congress amended the Federal Communications Act to require that pay-for-play arrangements be disclosed on the air. But record labels quickly found workarounds, using independent radio promoters as middlemen to covertly fund airplay, contests, and giveaways.

"When you think about it," Meyers says, "the music industry was buying airtime just as brands were buying airtime, in order to promote their product, which was music recordings."

Things continued to change in the 1990s, when the consolidation of the radio industry "corporatized" payola, according to Kevin Erickson of the nonprofit Future of Music Coalition.

"When we talk about payola, people have an image of somebody sliding a briefcase full of cash to a DJ," Erickson says. "That Alan Freed model's not really how it works anymore."

Today, large media companies own most major-market radio stations. Payola investigations in the mid-2000s led to multi-million dollar settlements by several major label conglomerates, as well as four of the nation's largest radio station owners. Now, a new model of brand sponsorship has supplanted label-funded payola.

Dr. Pepper's "One of a Kind Sound" is a series of artist promo spots, designed by the tech start-up Music Audience Exchange to look and sound like pre-release album teasers. CEO Nathan Hanks says this approach allows major brands to reach specific demographic targets, all while less well-known bands gain valuable exposure.

"Artists are calling us months in advance, and they're thinking about these partnerships as the marketing strategy for the single or for the album," Hanks says.

On an even larger scale, Pepsi launched "The Sound Drop." It's a partnership with MTV, Shazam, and iHeartMedia — formerly Clear Channel Communications, the country's largest radio station owner. The Sound Drop spotlights artists who are already on major labels and in rotation on iHeart Radio.

"It's not a traditional spot," says Emma Quigley, Pepsi's head of music. "It goes deeper because it's telling you a story."

Sound bites from the artist are woven together with audio clips of the song being pushed, and aired on all of the iHeart stations playing that format. All told, the 30-second spots air from 80,000 to 110,000 times over a two-week period — and that's in addition to regular airplay of the single.

"We work with iHeartRadio at a pivotal time in the cycle of the single," Quigley says, "to connect the dots between the single that's on air and in rotation and the artist themselves."

There is also a longer mini-documentary for each artist, hosted on Pepsi's YouTube channel. The only part of the campaign that resembles a conventional commercial is the banner ads Shazam runs on its app. Quigley insists that The Sound Drop isn't advertising under the guise of entertainment.

"We're not advertising anything," she says. "We are basically amplifying an artist so fans can find out more about that artist. That's it. There's no, 'That ad's running, they have to play the track after the ad,' or anything like that. It's very clear that The Sound Drop is a Pepsi-owned platform. But the star of that platform is the artist and that song."

The approach seems to be working: Pepsi's first artist, Lukas Graham, just picked up three Grammy nominations, including song and album of the year.

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