Major Broadcasters Hit With $12M Payola Fine

Gr8Apes writes with a just-breaking AP story reporting that the FCC is wrapping up a settlement in which four major broadcast companies would pay the government $12.5 million and provide 8,400 half-hour segments of free airtime for independent record labels and local artists. The finish line is near after a 3-year investigation. An indie promoter is quoted: "It's absolutely the most historic agreement that the independent community has had with radio. Without a doubt, nothing else comes close."

Comments

Re:Just the broadcasters?

[Otter]

This is the FCC, not the police. They don't have any authority over the labels.

Yes, they do

[overshoot]

I thought that radio stations paid the record companies a license fee in order to broadcast their music? Can somebody in the industry (or with knowhow) clarify how this works?

No, they are only required to pay the composers. The artists get nothing, which is why so many of them write their own (mediocre at best) material rather than cover something better. That, and they use the records and airtime to get fans for concert gigs, which is where the real money is.

Now, "Internet radio" is something else. They have to pay per play not only to the composers but to the record labels, and they pay handsomely. Of course, the artists still don't get anything but at least we're being protected from the horrors of radio over the Internet.

Re:What about Air America?

[IthnkImParanoid]

From wikipedia:

Under United States law, 47 U.S.C. 317, a radio station always has had the ability to play a specific song in exchange for money; however, this must be disclosed on the air as being sponsored airtime, and that play of the song should not be reported as a "spin". Some radio stations report spins of the newest and most popular songs to industry publications, which are then published. [...]On influential stations (and particularly on television) payola can become so commonplace that it becomes difficult for artists to get their records/videos played without offering some sort of payment.

There you go. My opinion: if radio stations were allowed to accept money for non-advertising plays of songs, only people who could pay would ever be broadcast, which is an abuse of a government granted monopoly.