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Spitzer Takes On Record Industry Payola
flackrum writes "NY Attorney General Spitzer has served subpoenas to four major record labels (UMG, BMG, EMI, WMG) in a continued house-cleaning of corporations employing dirty-tricks. In this particular group of cases, investigations are focusing on the circumvention of the Federal Payola Law, which forbids bribing radio broadcasters in return for airing specific songs. Mmm sweet karma."
Broadcasters are prohibited from taking cash or anything of value in exchange for playing a specific song, unless they disclose the transaction to listeners. But in a practice that is common in the industry, independent promoters pay radio stations annual fees - often exceeding $100,000 - not, they say, to play specific songs, but to obtain advance copies of the stations' playlists. The promoters then bill record labels for each new song that is played; the total tab costs the record industry tens of millions of dollars each year.
Why wasn't this loophole simply closed up when it began?
http://www.busyweather.com/
I have had the fortune of sitting in on a meeting with a potential client at a company. Let me say this... no contract or sale in the history of corporate life has ever been above board. I have never seen so much free flowing alcohol in my life... all to seal the deal... now if record companies do the same to get their crappy music on the air, good for them, it's how business is done... substitute music for software, or electronic equipment, and all of a sudden it just becomes normal business practice... I scratch your back if you scratch mine... sheesh...
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Programming is like sex... Make one mistake and support it the rest of your life.
Mark my words, very soon this guy will either be the successor to Pataki as governor, or Bloomberg as mayor. From there he WILL go national.
I could never sleep my way to the top
'Cause my alarm clock always wakes me right up
And since my options had been whittled away
I struck a bargain with my radio DJ
I said I'd like this song to be number one
He said "I'd really really like to help you my son"
And then I knew that I would have him to thank
Because he asked me how much I had in the bank
He said to think long term investment and
That all the others had forgiven themselves
He said the net reward would justify
The colossal mess they'd made of their lives
He said the record wouldn't have to be hot
And no one ever seemed to care if it's not
It would depend on something else that I've got
And that the other ones who'd given it a shot
Had seen a modest sum grow geometrically
And then they had forgiven themselves
Because the net reward had justified
The colossal mess they'd made of their lives*
Hey Mr. DJ, I thought you said we had a deal
I thought you said, "You scratch my back and I'll scratch your record"
And I thought you said we had a deal
Well, I told you about the world (its address)
I wonder when they're gonna clean up the mess
You know the rabid child is still tuning in
Chess piece face's patience must be wearing thin
Because they haven't played this song on the air
Not that anyone but me even cared
And the Disk Jockey has moved out of town
The district courthouse says he's nowhere to be found
He said to think long term investment and
That all the others had forgiven themselves
He said the net reward would justify
The colossal mess they'd made of their lives
Hey Mr. DJ, I thought you said we had a deal
I thought you said, "You scratch my back and I'll scratch your record"
And I thought you said we had a deal
Maybe like the guys down at the NYPD, the US Attorney's office are fans too?
I doubt anyone will want to hear this, but I fail to see why more traditional advertisers can pay-per-play to get their message out, but the RIAA (which has music as its product, thus radio play seems comparable to giving out free samples of product) cannot?
Don't get me wrong, it actually does please me to hear about the government finally cracking down on payola, and I hate the RIAA as much as any self-respecting geek. But in this case... I wouldn't necessarily call it black-and-white. Perhaps a matter of monopolistic control of a market, but beyond that?
As an aside... This addresses labels trying to do an end-run around the payola laws... But a much more obvious way to comply in letter if not in spirit exists. Payola laws forbid paying for songs without admitting it. Who sees the next big thing in radio as "and now, BoiBand9000's latest hit, brought to you by the kind, friendly, law-abiding, just-shy-of-saintly folks at Sony"?
I would be surprised if the licensing process alone costs less than $100K, unless you're planning to have a coverage area of about five blocks.
Governments meddle all the time. These laws are the result of some scandals that occured in the 1950's. One discussion is at http://www.history-of-rock.com/payola.htm/
The point of anti-payola laws were an attempt to kill rock and roll.
The music industry has always paid to get air play. The states and the feds thought that if rock and roll radio stations were forbidden to take payola, through laws selectively enforced against those stations, they'd be forced to stop playing rock and roll. It didn't work.
Why those laws are still on the books are beyond me.
If someone says he and his monkey have nothing to hide, they almost certainly do.
Be careful, lest we should forget that the radio stations are evil as well. If this is a major source of dough for the buyer of mass swaths of frequency and stomper of all private, unique, and worthwhile radio stations, I say take it away! Even if it means benefitting the record labels.
And as far as the radio stations are concerned, without the cash kickbacks from the labesl, even ClearChannel stations may be more willing to play independent / non-major-label music. Fat chance, I know, but as far as I can see, everything about this move is good in principle.
Just legalize payola, with full disclosure. That way all broadcasters, web-casters, satellite, TV, etc. big and small can compete fairly for promotional money from the industry. With a ban, only the major radio players can use the loophole to collect there money while the smaller players are locked out. Closing the loopholes would only drive the big players to find new loopholes. Now would be a good time to deregulate music promotion.
Legalizing payola would create a shock to the industry's business models. Any shock can only have positive results given the state of current business models.
No, because the people with the capital have already invested it in the purchase of politicians.
What you have under George Bush is pretty close to government under Libertarian principals, at least as close as I hope we ever get. Companies use legislation and collusion to hammer consumers and lock out competition. That's what bare knuckled Libertarianism really is. Not so pretty. Price fixing takes the place of taxes, only instead of the money being used to upgrade the infrastructure everyone uses and no one wants to pay for, it goes to the Cayman islands.
If the record companies have been getting such a bumm wrap, why have they been doing it for years and years and years? Besides, it's not them who pay for it. It's the radio station's advertisers, listeners who buy the music, and everyone else involved with the whole process. The record companies are simply watching the money go out to promote, watch the money come in, keep some for profits, and send the rest out the door to keep promoting.
All in all, it's a great deal for them. They outsource their promotions to the radio companies, who get to charge for doing what they were just paid to do by the advertisers (play music along with their ad). The more money they can get us listeners to part with, the more that run through their company so they can skim some off for profits.
They'll never have a lack of music to throw at us because young kids all over are scrambling and doing all they can to get contracts signed. And when they do, hey, the whole promotion system is owned, there's very little hard work to do to get listeners to part with their money.
Endless vicious cycle. It's not all that bad - that's what capitalism is all about. But when it's used to influence people against their best wishes (part with all your money!), it can and will collapse on itself some day.
A lot of people just don't know exactly what karma is.
Here's a few hints:
Karma, dharma and samsara are three fundamental aspects of the Hindu world view.
Dharma, one's appropriate role or attributes, gives life its order and predictability.
Karma, the measure of how well one performs one's dharma, explains why one is born where he or she is, why there is suffering and seeming injustices.
Samsara, the continuous round of birth, death and rebirth, is the context for all experience.
For society to function, everything must do its dharma. If even a dog or tree doesn't perform its dharma, society cannot function.
Therefore, in order to have bad karma, the record industry must first not properly play its "role" and then die. In its next "incarnation", it would then get a lesser dharma or role to play.
Problem is, it's very hard to fight it. The record companies use middle men, independent record promoters, to do the dirty-work (as indicated in the article).
When I was far younger, I used to work in the radio broadcasting industry and the stories of what the indie-promoters do is shameful.
The program director, a few of his lackies, some of the higher-profile talent and an independent promoter all went out to dinner in Windsor. Not only did the promoter spring for dinner, but then he hands everyone in the group three crisp $100 bills and tells them to have fun in the Windsor Casino.
Or perhaps the station is out of money for promotions and can't buy bumper stickers or on-air give-aways. The indie will line up all sorts of cool goods to give away like video games, cell phones and lots and lots of record product and concert tickets. Funny thing is, the listeners get the record product and the concert tickets, but the video games and cell phones are traded to vendors to print bumper stickers. Or, they simply go into the pocket of the general manager and program director.
Another disturbing thing that happens now is ClearChannel has a concert promotion business too. So when their show comes into town, the playlist is modified so heavily on all their radio stations that you can't get away from the featured act. Imagine a weekend of nearly nothing but Journey!
Radio is pretty much a license to print money. It is not a surprise that it's rampant with abuse and corruption.
You are wrong. Ted Turner (founder of CNN) who should know what he is talking about, is against the current situation where a few dominating media giants dominate the market. Yes, he is/was a media mogul himself, but he sees the problem nevertheless.
He writes:
"At this late stage, media companies have grown so large and powerful, and their dominance has become so detrimental to the survival of small, emerging companies, that there remains only one alternative: bust up the big conglomerates."
The whole article is
here
Arguably he discusses television, not radio but many of the companies involved are the same, the "product" sold to advertisers (John Q. Public) is the same, and a part of what is aired (music, news) is the same too.
Maybe you could start your own radio station, but who will listen to it and why would anyone advertise with you, with your tiny marketshare? The other companies are just too big, so they will very easily undercut you while you are trying to build your business.
have not even said a word about taking out evil corporations
Could you possible explain which ones those are? And what exactly is 'taking out'. Are you saying the government should be able to arbitrarily rule that a certain entity is 'evil' and therefore disband it?
More over, I'd like you to point out some evil corporations, because most likely 'taking them out' will not gain politicians votes, even though you wish it would. This conversation often goes something like this...
Walmart is evil! The politicians would get votes if they'd 'take it out', but they don't because the corporations control them.
So the politicians should impose a tax? Or fine Walmart for being evil? Or something of that nature?
Yes
But don't millions of people shop there? Often because it provides lower prices than anyone else? Wouldn't fining them raise the price to these millions of shoppers?
Umm...
Then wouldn't those millions of shoppers vote against who ever raised their grocery/clothes bill?
Yea, probably
Therefore, aren't the politicians doing exactly what people want? You know, the way a Democracy works?
I think you get the point...
Slate (has a nice piece on how the NY Attorney General is the most powerful person outside DC. Here's the money quote: The short form is that thanks to the 1921 Martin Act Spitzer can "subpoena any document he wants from anyone doing business in the state," make investigations secret or public as his whim, and "choose between filing civil or criminal charges whenever he wants." Extraordinarily, Thompson notes, "people called in for questioning during Martin Act investigations do not have a right to counsel or a right against self-incrimination. Combined, the act's powers exceed those given any regulator in any other state."
I dont do meaning of life questions.
The problem w/ payola is that it has a MAJOR adverse affect for people who don't participate. It ruins the free market, turning it into an oligopoly.
To see what the power of payola was, one record company decided to NOT participate when Pink Floyd was on their The Wall tour in Los Angeles, one of the biggest music events of the time. The song (I forgot which) was a hit across the country, but was not played by a single radio station in Los Angeles in the week before the concert.
There's a book about this called "Hit Men" or something like that. It's pretty interesting stuff. A basic overview is at:
http://www.antimusic.com/rants/2003/march.shtml
As far as Spitzer goes, he seems to be doing a great job battling corruption throughout NY. I've been impressed with how much he is accomplishing.
Engineering and the Ultimate
Yea, exactly.
Look at the original example. The indies are paying $100,000 a year to the stations, and the record companies are paying a total of $30m a year to the indies!
So it's pretty obvious that, if the music firms weren't benefitting, they could just pay each of the radio stations $200,000 a year *NOT* to follow any indie's playlist. They wouldn't be able to buy play of their own songs, that would break the law; they would just, effectively, be paying the station for NOT using promoters. Bad deal for them? Doubt it - if people still wanted to hear their songs, they'd get them played for a fraction of the price they'd pay the indies.
But no. They refuse, because as much as they may feel put-upon by the indies, at the end of the day it's a *good* thing for them that the cost of doing business is inflated - because it keeps anyone else from doing business.
"Ofcourse, big business has been very successful at spreading the meme that market regulation is bad for the market."
I think you're mixing concepts here. Market regulation _is_ generally bad for the market. Antitrust regulation is good for the market.
Big companies really welcome true market regulation, because it prevents smaller players from entering the field. For example, the reasons drug prices are so high is because regulation makes it virtually impossible for small companies to compete. Therefore, the only people willing to lose money for 5-10 years before becoming profitable are those whose only goal is to become absurdly profitable.
Engineering and the Ultimate
However, at some point you have to ask yourself if having some state AG go after them is the right way. Isn't that the whole point of electing a legislature? Should the regulatory policies of an industry be decided by one all-powerful unelected state official?
I'm sure this will go over the heads of the slashdot faithful until some state AG decides to take on something we like. At that point slashdot will roundly criticize them for being undemocratic, while failing to appreciate the irony.
Just remember -- for everything you like done without legislative approval (like going after the record industry) there's going to be something you don't like (like some judge deciding we should have software patents). The best way is to do things the right way or don't do them at all.
Jack Valenti and the MPAA are to technology as the Boston strangler is to the woman home alone
He also supported a flat tax, no exceptions. Of course, that meant he would lose a lot of money. His response: "Of course I'm going to take advantage of it, I'd be an idiot not too. But that doesn't mean I don't think there isn't a better system out there." The true idiot is one who can't see past his immediate gain to recognize a better overall system.
The presidency is a sporting event. People don't seriously expect the president to directly affect their lives for better or worse, they just want to see their favorite team win. If it were all about issues and results, nobody would take it nearly as personally as they do now.
Ita erat quando hic adveni.
You should try France: I remember taking a pee in an airport (I think) and having a female cleaner wipe a mop around the floor including between my feet at the time!
The real "Libtards" are the Libertarians!
the major advances in civilization are processes which all but wreck the societies in which they occur - A.N. White