Shot Across the Bow Against Payola in NY

Payola–so-called “pay for play”–still exists in radio. While it was straigtforward in rock’s early days in the 50s, now it’s sheathed in the guise of “independent consultants” who get songs “placed” on major (and minor) radio stations using moneys given to stations for “promotional expenses.” Those “independent consultants” are then paid by the major labels, and in some cases are actually owned by broadcasters, like Clear Channel, which acts like its own middleman.

(Whereas, in college and noncommercial radio the station staff just get free CDs, promo schwag, and free drinks and drugs when they go to free concerts and industry events).

Today, Sony BMG settled with NY’s attorney general’s office to stop the practice. Crusading Attorney General Eliot Spitzer said of the deal:

“This agreement is a model for breaking the pervasive influence of bribes in the industry… Contrary to listener expectations that songs are selected for airplay based on artistic merit and popularity, air time is often determined by undisclosed payoffs to radio stations and their employees.”

As part of the deal Sony has to pay $10 million into a music education fund.

I’m glad to hear that the investigation is only getting started with Sony BMG. What I really want to see is for Clear Channel to go under the microscope, since the rise of new-school payola is the direct result of radio ownership consolidation.

Spitzer also rightly took aim at the FCC for not investigating or dealing with this incredible pervasive practice. Of course, to any seasoned FCC watcher, this isn’t suprising, since under Powell the Commission was completely allergic to taking any hard look at how the media industry does business. Chairman Martin’s spokesman said the FCC would look at anything Spitzer forwards to them, but we’ll see.

Like a lot of the securities fraud Spitzer has investigated, this only shows how captured is the agency which is supposed to police these affairs. Why does it take a state attorney general to hold the recording and broadcast industry to the law? It’s only because New York is such a major seat of business, and because all the major recording and radio companies do business there that Spitzer can pull this off.

The attorney general’s press release has some juicy details about Sony’s payola practices, after the jump.

E-mail correspondence obtained during the investigation shows that company executives were well aware of the payoffs and made sure that the company got sufficient airplay to justify these expenditures.

In discussing a bribe given to a radio programmer in Buffalo, one promotion executive at SONY BMG’s Epic Records wrote to a colleague at Epic:

“Two weeks ago, it cost us over 4000.00 to get Franz [Ferdinand] on WKSE. That is what the four trips to Miami and hotel cost . . . At the end of the day, [David] Universal added GC [Good Charlotte] and Gretchen Wilson and hit Alex up for another grand and they settled for $750.00. So almost $5000.00 in two weeks for overnight airplay. He told me that Tommy really wanted him to do it so he cut the deal.”

Another Epic employee who was trying to promote the group Audioslave to a Clear Channel programmer asked in an email:

“WHAT DO I HAVE TO DO TO GET AUDIOSLAVE ON WKSS THIS WEEK?!!? Whatever you can dream up, I can make it happen.”

A promotion employee unhappy with the times assigned for spins of the song “I Drove All Night” by Celine Dion wrote this internal email:

“OK, HERE IT IS IN BLACK AND WHITE AND IT’S SERIOUS: IF A RADIO STATION GOT A FLYAWAY TO A CELINE [DION] SHOW IN LAS VEGAS FOR THE ADD, AND THEY’RE PLAYING THE SONG ALL IN OVERNIGHTS, THEY ARE NOT GETTING THE FLYAWAY. PLEASE FIX THE OVERNIGHT ROTATIONS IMMEDIATELY.”

The investigation revealed that SONY BMG employees took steps to conceal many of the payments to individuals and radio stations, by using fictitious “contest winners” to document the transactions and make it appear as though the payments and gifts were going to radio listeners instead of station employees.

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