Shocked, Shocked at Payola

"It costs a record company about $250,000 just to launch a single on rock radio today. That doesn't guarantee success; it just gives the single access to the airwaves. If the song catches on and eventually crosses over to the mainstream Top-40 format, indie costs balloon to more than $1 million per song." Salon.com has a pair of articles on payola today: one on the widening scandal and one specifically on a curious Clear Channel case. For context, here's our latest payola story, or if you want the background on why the labels hate the promoters but can't shake the habit, my writeup from a year ago. (If you want some beach reading on this topic, go check out "Hit Men.")

Comments

Guide TO Salon Clear Channel Stories

[wiredog]

In the index, of course.

Whenever the regulators stop regulating...

[Anonymous Coward]

...you get scandals, cheating, bribery, concentration of power, loss of diversity, etc. The only surprise is that anyone is surprised by it.

We need a balance between free enterprise and regulation. "Greed is good" is only true up to a point (and let's remember that the character who had that line in "Wall Street" was one of the bad guys.

Re:Whenever the regulators stop regulating...

[Anonymous Coward]

Whenever the regulators stop regulating...
...you get scandals, cheating, bribery, concentration of power, loss of diversity, etc. The only surprise is that anyone is surprised by it.

Oh really?

sarcasm mode on

So that's why there were so many more choices for phones under the regulated AT&T monopoly than now. And why those phones cost so much less and were so much more reliable and capable than now. And why long-distance was so much cheaper in the mid-70s.

And why it costs so much more to fly now than it did under airline regulation. And there are so many fewer choices in air travel. And why Amtrak is still doing so well relative to the airlines.

And why the U.S. steel and textile industries are so strong (since they benefit from good trade regulations), and the U.S. computer industry is so weak (since it doesn't).

sarcasm off

Remember that whenever regulation occurs, you are substituting the dynamics of the market for the oversight of a political bureaucracy. Sometimes that may be the right move, when the market can't effectively regulate something (or you don't want it to). But you always pay a price. Regulators are fairly easy to bribe, cheat, deceive, and co-opt. Regulation always removes competition, and rewards those able to break the rules without getting caught.

We need a balance between free enterprise and regulation.

Absolutely, but the benefit of the doubt should never reside with regulation. Every regulatory act creates a powerful organization with coercive powers, deep pockets, and absolutely no accountability to the market or the general public. Sometimes it must be done, but it's never cheap, it's never efficient, and it's never without serious economic and social costs.

Remember the music industry, like all industries dependent upon Intellectual Property protections in fact gets its power from government regulation. The RIAA derives its power from the government-granted power of copyright. It is because of regulation that the RIAA is able to bully its way through things.

On the other hand, you do make a good point: if we're going to grant monopoly power (or some other benefit) we'd better regulate those granted the power. The biggest scandals (Enron, S&L, etc.) happen when government grants big non-market benefits and protections, and then doesn't bother to check up on those using (and abusing) the grants. Like insuring S&Ls but allowing them to make any ridiculous investment they want. Choose one or the other, the market or regulation, but not all the costs of regulation without any of the benefits!!!

Frustrating

[sulli]

They pay Clear Channel, yet shut down SomaFM for not paying more than they already do.

Satellite radio

[EyesWideOpen]

I'm not sure exactly how the whole satellite radio thing works but don't they have their own radio stations for satellite radio (i.e., Clear Channel-free) with their own disc jockey's and whatnot? If so, I wonder how the payola involved in satellite radio compares with that of FM radio.

Re:Satellite radio

[dubiousmike]

If you think Satelite Radio isn't capatalizing on the same business model as regular radio, think again. There is nothing at all to suggest otherwise. If I were driven soley by the bottom line, I definitely would.

If we all were satelite radio, wouldn't we do the same? Maybe not as most of us are geeks who care more about what is right and less about a big payday at the expense of others.

A Bad Thing?

[simetra]

People jump to the conclusion that Payola is a bad thing. Why? You say it doesn't allow small artists airtime. So what. If they're good, they can get a record contract and get on the air too. Music and Radio are businesses, not god-given rights. The music industry spends a lot of money finding (or making) what people want. Radio stations are businesses also. If they collect money from record companies - who have invested a lot of time and money in their artists - to give them airtime, what's the big deal?

If you don't like the crap they're trying to sell, listen to a different station, go buy music you do like, whatever.

Re:A Bad Thing?

[nolife]

If you don't like the crap they're trying to sell, listen to a different station, go buy music you do like, whatever

Where do you find or hear about this music that you may like? Napster? another P2P with your bandwidth capped CM? another radio station in your area? Online in some crappy quality that you must pay every month to hear? How about some other method that is being sued or has been shut down recently.

Its not that easy. Clear Channel owns most major markets. In DC they control 90% of the market. They have a pop, rock, oldies, news, casual, and a jazz station. These stations do not compete with each other. The choices are very limited. I don't actually listen to the radio much but I did find WHFS pretty decent but its hard to pick up in my area.

CARP compromise designed to stifle sm. 'net radio

[ethereal]

Since I couldn't get this story submitted (too much Microsoft crap to fight through, apparently), this seems like a good place to pass on the story: Cuban says Yahoo!'s RIAA deal was designed to stifle competition

Mark Cuban:

Now, no one asked me any of these things prior, during, or after the first or second pricing. I'm not sure that this matters. But if it does, here it is: The Yahoo! deal I worked on, if it resembles the deal the CARP ruling was built on, was designed so that there would be less competition, and so that small webcasters who needed to live off of a "percentage-of-revenue" to survive, couldn't.

As originally seen at: http://www.dnalounge.com/backstage/log/2002/06.htm l#24-jun-2002, although JWZ seems to have taken down that news post at the moment (?).

P.S. Does anyone else who lost moderator access on the Thread of Doom find that they can't get any stories submitted any more, or is it just me? I'm beginning to cultivate a healthy persecution complex :)

There's a solution ....

[i_want_you_to_throw_]

A fight between the 800 pound gorillas and the public suffers.

You could launch a record and get it played on the radio for cheaper but it won't be on Clear Channel. Clear Channel does all kinds of evil stuff besides that, like piping in remote DJs and making you think they are local.

This sort of battle was inevitable when the FCC lifted regulations on radio ownership.

The solution for you, the public might be to try to patronize stations that are not conglomerate owned.

I DO listen to one radio station that is both terrestrial and internet streaming: 97X out of Oxford Ohio. Here's some of the NEW stuff I'm enjoying..
Elvis Costello
Hives
Cornershop
Idelwild
Girls Against Boys
The complete playlist is here

Great music that is bucking the current cock-rock trend of Linkin Park, System of a Down, Korn, etc. being offered by local Washington DC suck ass radio in the form of WHFS and it's "Most Played" list. (It's not Clear Channel, It's CBS, just as bad)

Then there's Radio Paradise.

Any /. geek would love this station merely for the technical expertise that Bill Goldsmith pulled off when he set this up.

Just boycott Clear Channel. Turn it off.....

You needn't follow the flock is you refuse to be part of it.

Re:The Problem With Clear Channel

[Jonny Ringo]

ok, I'm hearing ya. But, I also think there are others like me who use to listen to radio but no longer do because they were able to break through and find much better music on the internet than on the radio.

Sadly one of my favorites is no Longer. www.monkeyradio.org, played all sorts of trip hop, acid jazz type stuff that I took to like flys on shit. Monkeyradio.org had to shut down becuase of the IRAA, he's asking for help to send a list of cd's you have purchased because of monkeyradio.org, to help prove that it helps the industry. So if you are a listner help out! I personaly use a stream ripper to get a lot of the songs I like, and I have purchased over $200 worth of music becuase of monkeyradio.org.
I'm now listing to bassdrive (its linked off of shoutcast under electronic D&B).

My point? I'll will never go back to radio. I hate radio. It seriously sickens me. So I encourage you to break through!

Re:Unpopular opinion

[Dr. Evil]

A payola-free system is inherently unstable, it relies on the record companies to simply never offer payola to a radio station. A payola-free system is better for the whole music industry. So why don't we have this better payola-free system?

The incentive is huge to be the first to start offering payola to radio stations in a payola-free system.

That is where legislation might not be a bad thing, it can stabilize a payola-free system by creating strong disincentives to offering payola.

An alternative however might be for labels to forbid stations from playing their music if the station accepts payola... but that takes guts. Still, the labels are not as powerless as the article indicates.

(I don't think the above is a troll, I don't know why it got modded down)

Re:CARP compromise designed to stifle sm. 'net rad

[InspectorPraline]

I have an article on the same topic submitted but undecided upon - and from the way I read things, there's some other shady business practices happening in addition to the things you mentioned -- Cuban goes on to state that he had worked with Yahoo to undercut the royalty payout as well by using multicasting and then only paying royalties based on the single stream being broadcast, and forcing those webcasters who needed percentage-of-revenue rates to subsist and were bound and determined to stay on the air to pay fees to Yahoo to have their material broadcast.

This whole mess just reeks of Mafia boss tactics. You pay us a "protection" fee, and we'll make sure your bandwidth doesn't get cut off.

Oh, and for a good read on the whole "media control" thing, check out The Media Monopoly by Ben Bagdikian. It was written in the 80s, but has been updated since to include new mediums of communication. Very interesting read.
--

Re:Legalize Payola

[sphealey]

There is one simple, effective and reasonably sound way of dealing with the payola problem - legalize it. Sounds unfair you think? Think again. As long as we accept music as an industry there will be money in it. And anytime you have large amounts of money circulating around, someone is going to try and stick their hand out. There is no business reason why it shouldn't be radio station owners wanting some of that money and that's why payola continues, despite the numerous attempts to stop it.

Payola, or paying a placement fee, is perfectly legal in the radio industry. The radio station need merely announce prior to playing the "content" that such a fee has been paid. That was the end result of the scandal in the 1950s.

Of course, doing so would allow consumers to make independent judgements on what they like, and why certain songs are being played. So I guess we can't have that!

sPh