The business relationship between broadcasting and the music business is the very essence of the two. To put it simply, they needed each other. A record label needed radio air-play to deliver the music of its artists to an audience of radio listeners. A radio station needed music programming to broadcast to that audience.
Radio air-play was traditionally the best way for a record label to get their recorded music heard by the public. The more a song is played on the radio and heard by listeners, the more chances the song has to become a part of the public’s consciousness. If people hear a song often enough to get familiar with it, they may like it and want to buy it — that’s the only reason a record label invests so much time and money to get air-play. It’s a proven marketing tactic that, when successful, leads to billions of dollars in record sales annually.
Music-formatted radio stations both commercial and non-commercial get their music free from the record labels. The radio industry uses that music to attract listeners andf advertisers who are eager to reach a select demographic group of consumers. So, in a sense, a radio station uses music like bait to attract people of a certain age group, gender, and ethnicity so they can deliver listeners of that demographic group to their advertisers. If they do their programming right, radio stations can charge advertisers handsomely for the radio ads they air and the income from advertisers is radio’s primary source of revenue.
(Excerpted from “How Record Labels and Radio Stations Work Together” by Christopher Knab)