OK, we know who pays for the tests. But who receives that money? The testers? The participants? Music royalty fees? The caterer? The hotel banquet room?
Generally, a station hires a research company that prices the project based on local costs, conducts the test and delivers a final report and consultation to the station.
The research company will often use a local recruiter to find qualified respondents based on a tiered recruit specification sheet. Some research companies have their own call centers where they recruit themselves. The fees for each respondent depend on how difficult the recruit specs are to fill, between as low as $50 to over $100 per person. Incentives paid to the respondents can also be in the same range.
Incentives to respondents vary by format and geography. While $50 may get you respondents in Midland / Odessa, it might take $225 to do a two night 1200 song AC test on Long Island.
Some companies test in batches, using a research center and having no more than 5 to 10 people at a time. Others do two half-sessions at different times. And some do a single session. Add to that the ability to now recruit and administer the test online, and there are many variable costs.
So the facilities can be a banquet or meeting room with coffee and cookies to a room at a research center with soft drinks and bags of chips.
There are no royalties or fees involved in testing music.
The rest of the cost goes to things like fees for the one-time use of software like Cornerstone's Analyst, cost of equipment (dials, computers, scanners for paper tests), travel and lodging for the person who conducts the test, cost of hook preparation (there are several "hook banks" that make the lists with the audio) and shipping of test equipment (or local rental of A/V gear).
I just bought eight in the last week. A movie soundtrack, the latest in the NOW series and six "oldies era" to add to my collection. Two of those were the artists' regular albums, the other four were the artists' greatest hits comps.
Every place I used to buy music in LA is now gone except for one collector's store. Even the "music department" at places like WalMart seems to be shrinking each time I pay any attention. In my circle of contacts, friends and associates, there was a migration to Amazon way back, and then to iTunes et. al. a bit more recently. Even the record labels no longer produce promo CD for most product. It seems like physical "albums" are becoming less viable.