Final answer:
Record companies and artists benefited from payola by paying for their records' airplay, which led to increased sales and profits. The practice was common in the 1950s and 1960s until exposed and regulated by the government. Payola was a strategic investment that highlighted the influence of media on music sales.
Step-by-step explanation:
Record companies and artists benefited from payola by engaging in a practice where they could pay radio stations or disc jockeys to play their records. This under-the-table form of promotion was seen as an investment. By paying for a record's airplay in one town, they could significantly boost the record's popularity and sales, leading to a profit that often exceeded the initial cost of the payola.
Sales of the record would increase not just in the initial town, but potentially on a national level as the song gained traction, allowing the record company to make substantial profits from the wider exposure.
This practice had its heyday in the 1950s and early 1960s until it was exposed and became the subject of governmental investigation and regulation. A notable case was the investigation into prominent disc jockey Alan Freed, who was found to have accepted payola. The exposure of payola led to public outrage and a demand for transparency in how music was chosen to be played on the airwaves.
Despite the scandals, the concept of paying for exposure has not disappeared completely and has taken new forms in the modern music industry. Payola showed the influential power of the media and how a strategic investment in airplay could create hit records and generate immense profits for those willing to partake in this practice.