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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/
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 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.
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.
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.
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