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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."
At least it is a step up from representing unpaid restaurant bathroom attendants .
r _bathrooms.reut/
http://money.cnn.com/2004/10/08/news/funny/spitze
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/
Radio stations would have to play what people wanted to hear.
If guns kill people, then CmdrTaco's keyboard misspells words.
Anyone...
Anyone at all...
Buhler? Buhler?
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
But government's meddling in what businesses can pay to each other seems wrong to me.
In this case I don't think it's wrong, since the richer companies could use their money to effectively monopolise radio for their artists.
Hrmm...
"But government's meddling in what businesses can pay to each other seems wrong to me."
(I'm not American, nor in America, thank goodness) A previous poster stated that the law prevents the station from recieving inducement and _not disclosing it_ to the listeners. The law doesn't preclude the inducement, just the concealment of "sponsored" playlists.
i.e. it prevents corruption.
This is, in general, a good thing. In the UK, this is why extended "infomercials" have to bear a banner telling you that they are an "advertisement feature"; to prevent the credulous masses from thinking they are getting unbiased information, when in fact they are getting neither (not unbiased, probably not information either)
By extension you would be OK with businesses paying news companies to supress news stories. Payola is bribary, just because it's over something as trivial as popular music doesn't make it OK.
init 11 - for when you need that edge.
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.
As we all know, the record industry are bastions of honesty and fair play, and the sole crusaders against evil terrorist pirates who steal music, and therefore murder the poor artists who create the songs.
Given their record of fair play, being law abiding citizens, and their respect for the laws of this country - so great that they even write the laws - it is quite clear that they have not done anything wrong, and should not be investigated at all.
Music is not a manufactured commodity. It doesn't have feature sets, like computer software. Taste in music is subjective.
Aren't you in the least bit frustrated to tune through the FM dial and find the same artists on 3/4 of the stations?
Do you really believe that the reason independent artists are never played on the radio is that none of them are as good as commercial artists? The reason they get no airplay is because they can't afford to stuff the pockets of radio programmers. This system keeps the big labels happy, because they essentially own the FM radio band, and they use it as one big commercial for all their latest crappy music.
I have to agree with that. I didn't actually know there was a law against this (and for all I know there isn't where I live in Canada) but I noticed this happening about 2 or 3 years ago in Canada.
;-).
Radio stations I used to like to listen to were playing top 40 hits non-stop during the day, and often two stations would be playing exactly the same song at the same time. I said to myself, that isn't music it's advertising space.
In Canada there was a backlash against it by a number of top DJ's who got sick of playing this crap and the left to join a group of radio stations that were formed across the country (by a big corporation mind you) that lets them play whatever the hell they want. It ain't always in my taste but I guaruntee no one paid to get Whitesnake or Genisis played
Hopefully this means the Rock/Classic Rock stations I was listening to can stop playing top 40 music.
"Take that Lisa's beliefs!" - Homer Simpson
I don't know if attorney general is an elected position, but that doesn't matter. We need to send the message to people in our government that the more they do stuff like this the more likely they are to get our vote. The two presidential candidates have not even said a word about taking out evil corporations. And the third party candidates might say something about it, but have no track record of actually doing so. I want the people who represent me to know that if they do things that hurt record companies, the MPAA, media companies, etc. That I will proudly vote for them regardless of political affiliation.
Did you hear that?
The GeekNights podcast is going strong. Listen!
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/
Whoa, nice spin.
Here's the deal: This is a system perpetuated by both the music industry AND the radio stations, but the music industry is in charge, make no mistakes. If they really didn't like the system, they could have and would have phased it out years ago.
But I think they know they have too much to loose.
They essentially have a monopoly over FM playlists, which means they can push out whatever teeny bopper crap they come up with and know, just KNOW, that it will sell well. Why? Good question. The answer is, because we are sheep. Peer pressure is a powerful force, for every age group, but especially the ones they are targetting.
Now, the radio stations are just as addicted to this problem as the labels, but they are NOT in control. If the labels decided tomorrow that they weren't going to pay out anymore, the stations would fail fast.
The music industry is right where it wants to be: It can dictate play lists to the music stations.
Mod me down with all of your hatred and your journey towards the dark side will be complete!
If this rule were applied to Internet or Cable radio stations, I'd agree with you. But this isn't a free market, there's only a certain amount of spectrum available, and if someone wants to use it, they need to be reasonable.
Besides which, the payola rule is nothing more than a full disclosure law. If a radio station informs its listeners that they were paid to play a particular song, what they're doing isn't covered by the payola laws. This isn't about one company paying another for services, it's just regular regulation of advertising.
You are not alone. This is not normal. None of this is normal.
What you're asking is for payola to be legalized if it isn't actually payola ;-)
You are not alone. This is not normal. None of this is normal.
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.
If the market was truely libertarian, then demand would cause new ventures to popup to undercut the markup thus putting the overpriced ones out of business.
It's a myth that an unregulated market is good for the small guy trying to break in. The reason this is not the case is the concept of scale effects. When you sell 100 items of a product your fixed costs per product are a lot higher than when you sell 100.000 items, and your variable costs tend to be higher as well (due to the inefficiencies of low volume production). Because your cost per product as a small guy is higher, it is hard to compete against the bigger businesses, who can maintain lower prices and still be profitable. Over time, this effect causes the market to merge in a number of big behemoths (the larger you are the more profit you make per product), and once you reach that point usually they will form cartels, where they use various kinds of underhanded tactics, like predatory pricing, coupled sales, government bribing and so on to keep out new market entrants and maintain higher prices than market forces would dictate. Examples of this are the music industry (the big five), microsoft's windows and office empire, the telecom industry on the local level, and on and on.
Cartels or monopolies have been demonstrated to tend towards having low market efficiency, due to the profit maximalization imperative and their ability to maintain non-market-optimal pricing models at greater profit to the business.
The only way to avoid this is to limit the ability of market players to form cartels or monopolies, and then abuse their power. Retroactively, that means antitrust law. So antitrust is a necessary part of maintaining a healthy free market. Proactively it means making sure that new market players can enter without high entrance costs (like allowing small telecom companies to use existing networks for a fair price, so they don't have to build up their own network at extreme cost), so raising prices by the big players would cause new players to enter at lower price points.
So, in conclusion, to have a truly free market (meaning with near non-existant barrier to entry), you must regulate it so no market player can become too powerful. A correctly regulated market is a healthy market, an unregulated market is a diseased or soon-to-be-diseased market.
Ofcourse, big business has been very successful at spreading the meme that market regulation is bad for the market. The reality is that it's good for the market (if done correctly), but it's bad for the behemoth.
Now, if you subscribe to this mentality, the law falls into place nicely. Since the radio stations are there for the public benefit, it is up to the public (by way of representatives and laws) to determine how they should conduct business. Also, since there's supposed to be a division between content and advertising, and I think we can all agree that that division is in the public's best interest, codifying that division can only support the public's best interest.
Again... this all makes sense if you agree with the original mindset in which the law was written. To sum it up, here's the basic logic (since that last paragraph was poorly written and hard to follow):
- Radio stations are allowed to broadcast by the government (acting as representatives of the people) for the public benefit.
- Radio stations have "content" (music, talk shows, etc
... ) and "advertising" (pre-recorded ads, endorsements, contests, etc ... ). Keeping these separate allows to strengthen the public discourse while providing the radio station enough money to operate profitably.
- By allowing companies and industry groups (like RIAA) to "pay for play" in the content section, the "public discourse" is taken away from the public and given wholly to the industry. As representatives of the public, the government should try to stop this.
- Furthermore, by having a "pay for play" policy, recording companies with less money are unable to get their songs heard and can never compete with the larger labels. This creates a oligopoly (like monopoly, but instead the market is cornered by a "group" of companies), which is against the competition model of our society's capitalist system.
Agree or not, hopefully that will make the intention of the law clearer. I thoroughly understand your viewpoint, though, and I agree that dictating what a company can or can not do is a little risky, but only if you're a laissez-faire Republican (one who believes government should be reduced in size, and take a less-active role in day-to-day life... i.e. a classical conservative). The fact of the matter is that industry is subject to regulation all the time, usually in a way that supports the public good (i.e. environmental laws, zoning laws, bribery laws, accounting laws, etc-=-=-=-=-=
I'd rather be flamed than ignored.
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