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Hitmakers on the Take

The bright side of record industry payola investigations By Frank Moldstad

Names were redacted from incriminating memos and emails released by Spitzer.
There are two ways to look at the payola probe of the record industry currently being conducted by New York Atty. Gen. Eliot Spitzer, which has uncovered proof of illegal payments made by record labels to radio stations for playing certain releases. One is that its a dark stain on the record and broadcasting industries that confirms how singers such as Jessica Simpson become overnight ?stars.

But it could also be viewed as a golden opportunity for a more diverse range of music to reach the public. For one thing, independent record labels and their artist rosters may find that theyre on more equal footing with the major labels -- not really equal, because of the major's larger staffs and legitimate promo budgets. But more equal. Even artists who are on major labels but who have not benefited from the payola largesse may find theyre getting more attention from record companies and radio.

As a damning series of memos released by Spitzers office reveals (see them here), promotional staff from various Sony BMG labels (including Epic and Columbia) systematically plied programming directors, DJs and stations with expensive gifts in return for a specified number of plays. Sony BMG was the first target of Spitzers probe to settle, while other labels and radio stations are still being investigated.

There were even rate cards drawn up, including a formal memo from an Epic Records executive to stations that set payments ranging between $1,000 and $500 for a minimum of 75 spins, depending on the stations market. Those in the top 23 markets were eligible for $1,000, markets 23-100 got $800, while markets 101 and below got $500. ?If a record receives less than 75 spins at any given radio station, we will not pay the full rate, the memo says.


Non-cash payments for spins included plasma screen TVs, airline tickets, and laptop computers. ?Whatever you can dream up, I can make it happen, says an Epic Records promotional staffer in an email seeking more plays for Audioslave on Clear Channels WKSS.

In one of Spitzers documents (an Assurance of Discontinuance, see it here) related to the Sony BMG settlement, there is a definitive description of ?Modern Pay for Play practices, which the document says have changed significantly since the payola scandals of the 1950s. ?The bribes to local disc jockeys have evolved into an elaborate corporate payola strategy, developed and brokered at the highest levels of the record labels and radio broadcasting companies, according to the Assurance of Discontinuance. ?The increased sophistication of such strategy reflects the significant consolidation that has taken place within the radio industry in the wake of the Telecommunications Act of 1996, which substantially increased the number of stations that could be owned by a single entity. With the advent of conglomerates such as Clear Channel Communications, Inc. ("Clear Channel) and Infinity Broadcasting, Inc. (?Infinity), record label executives can, and do, negotiate large scale promotion deals netting airplay across a large number of stations serving a host of different geographic markets.

Sony BMG has agreed ?to stop making payments and providing expensive gifts to radio stations and their employees in return for ?airplay for the company's songs, according to Spitzers office. A $10 million fine was also assessed, for distribution by the Rockefeller Philanthropy Advisors to New York State not-for-profit entities to fund programs aimed at music education and appreciation. 

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Related Keywords:Eliot Spitzer, payola, record industry, Sony BMG, radio industry

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