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The impact of radio on sound recordings

At the time of radio’s introduction, the idea of transmitting entertainment and news through the airwaves was revolutionary. New institutions and new business models were developed to take advantage of this technological breakthrough, including the idea of using advertising to support the market, which has largely continued to this day.

Radio grew into a major industry, with a profound influence on the culture and social mores. Although it was later to be eclipsed by television, it continues to this day to be one of the major forms of entertainment, with the average American listening to approximately three hours of radio per day.

Radio stations generate positive values to listeners, as evidenced by the willingness of listeners to spend several hours each day listening to radio even though they have to put up with advertising. Advertisers pay for the right to place their advertisements in radio programming, generating the revenues upon which private radio stations depend for their existence.

We have already discussed the two possible impacts that radio might have substitution and exposure. It is likely that both effects are at work at any one time. The relative strength of each, however, determines the overall impact of radio on record sales.

The prevailing view is that radio play enhances the market for prerecorded music. Much of this view can be traced to the fact that firms in the recording industry carefully cultivate their relationship with radio broadcasters to make sure that radio stations play their recordings. Often, this cultivation crosses over into what is known as “payola”, a pejorative term indicating that record companies are paying radio stations, station programmers, or disc-jockeys to pay particular recordings.

As we shall see, the recording industry underwent a devastating decline shortly after the advent of radio. Even some commentators who assign the cause of the recording industry’s decline to radio’s emergence believe that the major impact of radio on record sales changed from substitution to exposure, and that radio now enhances the sales of recordings. For example, according to the BBC website, The record industry had spent the first twenty years of the century convincing the public that they needed a source of music in the home but they didn’t foresee the possibility that it may be free. Unfortunately, The Radio Corporation of America (RCA) had by the early 1920s started mass-producing commercial radios which, while acoustically inferior, offered a far wider range of news, drama and music. The record companies retaliated by drawing up contracts for their major artists, forbidding them to work for this rival medium. This move to limit radio’s output was doomed to failure as new vacuum tube amplification rapidly improved reception and sound quality. Record sales plummeted.

In recording we should compare musical instruments to get what is best, but in industry we need more actions than just comparing.