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Spitzer reminds Sony BMG: Payola is illegal, silly!

July 27th, 2005 by

Sony BMG, one of the five major record companies, was called to task yesterday for the peculiar brand of racketeering called “payola.” This practice, as old as commercial radio itself, has continued unabetted despite several attempts to stop it. The etymology of the term itself is elderly – a combination of “pay” and “Victrola.”

In market environs as bereft of ethics as the recording industry, sophisticated criminal innovation is widespread. Modern-day blackmailers operate via the screen of third-party “independent promotion” companies who launder bribes. This cottage industry developed to support the “pay-for-play” tradition of pop radio after a major payola crackdown in the 1970’s.

Yesterday, encouraging news surfaced when New York State Attorney General Eliot Spitzer revealed that he had reached a $10 million settlement with Sony BMG after gathering “damning” evidence demonstrating their participation in illegal pay-for-play. Spitzer seems focused on continuing his pursuit of this cancer on our cultural landscape, citing a history of abuse:

Paying for airplay, which first came to light during federal hearings in 1959, is an abuse that has maintained itself over the years, Spitzer said. Employing former New York Yankees star Yogi Berra’s oft-repeated malapropism, he called the current state of affairs “deja vu all over again.”

Spitzer continued: “Payola is corrosive to the integrity of competition. It is corrosive to the music industry. It is corrosive to the radio industry . . . This is a story that has been told many times in the past. It is not new. It takes many different forms. But it is essentially the same scam where — instead of airing music based upon the quality, based upon artistic competition, based upon aesthetic judgments or other judgments that are being made by radio stations — radio stations are airing music because they have been paid to do so in a way that has not been disclosed to the public. This is wrong, and it is illegal.” — Sony BMG faces the music in payola settlement, Chris Morris and Alexander Woodson, Reuters, 26 July 2005

Coverage from Pitchfork Media includes painful quotes from internal email:

Another, from an Epic employee to a Clear Channel programmer looked like this: “WHAT DO I HAVE TO DO TO GET AUDIOSLAVE ON WKSS THIS WEEK?!!? Whatever you can dream up, I can make it happen.”

The next step is to move the magnifying glass over the radio stations themselves. As the odious practice of replacing human DJs with glorified iPods continues along the FM dial, and renewed attention to payola highlights anti-competitive activity off-air, protecting low-power FM is more important than ever.

Spitzer’s announcement is encouraging news for anyone wishing for greater diversity in the FM ecosystem. Let’s hope we can keep up this momentum!

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