Payola has been part of radio since its inception. The music industry has always seen radio as a way—possibly the most effective way—to sell its product. Initially payola was blatant—straight money for play. If you were promoting a new record and you wanted it played on the radio, you just walked over to your local DJ and handed him the record, along with a little something extra for his trouble. He played your record on his radio show and you got the airplay that generated sales that generated you even more money. Because, what good is all the money you make from record sales if you can’t use it to make the playing field uneven, so that your future promotion is easier and that of other, less moneyed folks, is harder? It was a perfect racket and it wasn’t even illegal. That is, until 1960, when people started getting wise and Congress passed the payola law. Soon after, the country’s most popular DJ, Alan Freed, credited with coining the term “rock and roll,” was found guilty of commercial bribery, a.k.a., payola. Freed’s career was ruined. Nobody wanted to be associated with the payola guy because that would call attention to the fact that it was still happening, it just a little more under the table.
Labels that wanted their records played had to get creative. Instead of offering radio money, they came up with other incentives. They gave radio stations “gifts” that they could use for promotion. Concert tickets, for example, generate a lot of excitement that is beneficial for both the label and the radio station. It’s synergy, as they say in business parlance. By the seventies, labels had figured out even better ways to ensure radio was playing their records and payola was institutionalized. Buffer companies, called “independent promoters” or “indies” acted as intermediaries between the label and the radio station. Indies cultivated special relationships* with radio stations and promised airplay in exchange for piles of cash. The labels couldn’t lose—by hiring a third party they were insulating themselves from direct contact with radio and therefore the possibility of legal action. Or so they thought.
New York’s then attorney general and current governor, Eliot Spitzer, didn’t think the indie arrangement was legit, so he launched an investigation. The labels quickly settled, rather than have another payola scandal that would risk letting the public know just how much control they have over radio playlists. The FCC then took up its own investigation of radio. And radio caved just as quickly.
This week, radio settled with the FCC. The settlement hasn’t been getting a whole lot of press, but I think it has the potential to make a significant impact. In addition to the fine, the four largest broadcasters have agreed to provide 8400 half hour segments to independent labels and local artists. There is very little on radio now that isn’t backed by a major label and almost nothing in the way of local content, so even this small amount of programming has potential. The settlement could result in more airplay for independent labels and some airplay for your favorite local bands, but that remains to be seen. I have no doubt that as I type this there are meetings happening at Clear Channel to find a way to make money from it. When they do, things will settle out and access will once again be restricted, but in the meantime, it’s time to get on the gravy train, local bands; maybe you’ll sell a few extra CDs and make rent this month.
*For as long as I did radio, I never got anything more than concert tickets. No expensive trips to Scottish golf courses. Not even a dinner. As such, I feel like I missed the boat on the payola. I’m sure it was just an oversight and I encourage the labels to contact me so we can work something out. Call me.
From an ABC news story last year about a song that made it to #1 on the charts: “It cost something close to $700,000 to $800,000 to get ‘Closing Time’ on the air,” said Slichter, “to keep it on the air long enough for people, for public taste to really grab on to it, yeah. A chunk of change.” It goes on about Spitzer’s case with details about Sony’s payola for J. Lo, Franz Ferdinand, and someone named Good Charlotte and Gretchen Wilson.
Eliot Spitzer should be president of the universe.
How is SXSW, by the way?
It’s just getting started. There is only film and interactive until Wednesday when the music kicks in.
Did you get my mail?
Mail as in email or mail as in post office snailmail? Or chainmail? Email, yes, Barcelona… snailmail, no, but to be honest, I haven’t checked it in a few days.
Let’s hope so.
Theoretically there should be good radio here in Chicago – a few university stations that are good and some neighborhood stations – but nobody has ktru fancy reception.
Email. Ok. You got it.
I just thought about Justin in Payne
Stewart-type duds, teeing off at St. Andrew’s, all on Clear Channel’s dime. Today is a good day.
Anybody have any insight into the American Association of Independent Music? I know next to nothing about it, but can’t help but be skeptical of what those 8400 segments might consist of.
I’m sure there will be some exposure for some artists that would have never been played on commercial radio otherwise, but I also have difficulty considering Epitaph, Sub Pop, Matador, and Lookout! as truly independent. There are many other labels that also make up the consortium, but despite a board membership that seems to rotate and which includes representatives of the far smaller labels, it’s easy to envision someone playing a Shins song during a segment and patting themselves on the back for diversifying radio.
I hope a lot of you Houson and Austin folks catch Charalambides in coming days. Last
Thursday they were pretty
wonderful, and the setting for this weekend’s Houston show in particular seems pretty special.
My guess is that the hours between 1 and 5am will be the best commerical radio has to offer until the Majors figurew out how to cheat the system.
I’m sure we’ll have an equivilant to He-Man’s giving some lame moral to “comply” with educatonal programming requirements very soon.
I’m likely missing the obvious, but how do you edit a posted comment? I noticed a misspelling (Houson), and that Justin should be hitting the links on EMI’s dime, not Clear Channel’s.
I’m sure Ramon is spot-on about where these segments will be situated.
You can delete via the trash Icon and repost. Moderators can do this to any post and you can do it only to yours if you logged into blogger.
This blog brings 3 things to mind…keep in mind that I am neither championing, nor condemning…I don’t have the answers, here…I just like these tidbits.
1.) The Residents once purchased about 30 individual minutes of commercial time from a San Francisco station (KSAN, maybe?), and then sent them 30 one minute songs to be played during the “advertising” slots they had purchased. Those songs were later released as THE COMMERCIAL ALBUM. (30 might be an incorrect number, this is from memory, it could be more/less…you get the drift…)
2.) Most of the big radio stations have a sort of BIG DAY OUT type of concert, and the implied argument is that if they ask you to perform, well, you had damn well better be there, or you can kiss any future airplay toodle pipskie.
3.) Moby…and I think this was for the PLAY album, apparently licensed out several songs to commercial advertisements for a substantial fee. Now before you can reply, “So…that’s nothing new.”, keep in mind that he sold these songs BEFORE the album was even released. Moby’s theory…and it makes sense…was that nobody really learns about any new music from the radio or MTV, anymore, but the new thing is more and more individuals going to the computer and Googling “What’s the name of that song on the Chevy Ford Explorer commercial, and where/how can I purchase it?”
4.) In THE GODFATHER, Luca Brozzi held a gun to the head of Johnny Fontaine’s manager, and Vito Corleone told him that either his brains or his signature would be on that release form. That’s a true story.
How do you like your pasta?
Very interesting how it’s done. I ‘m sure the task of what band gets air time is quite daunting given the quantity of bands trying to break in. I remember watching a news segment on 20/20 where they showed a huge trash can of CD’s given to local DJ’s just for that week. Obviously, all these bands can’t get air time. But, you know what? What with radio stations over playing a number of songs to the point of distraction, that time wasted on the same old tired songs that have alreasdy made everybody rich can be used to expose new songs and new artists. Fuck, I barely listen to radio and I can say I spend months to even years not listening to it, but when I do come back to radio it’s the same old shit played. Nothing new.
William Kingery
Wait, am i reading this wrong? The four conglomerates have 1653 station, and they are going to split 8400 half hours among them? That means every station gets an average of 5.08 half hours? how often? every day? every week? total? It needs to be every week, at least, for my faith in corporate radio to begin to be restored. But otherwise 8400 half hours is a drop in the bucket, and will go completely unnoticed. Or do they mean to make half hour programs that are the same in all of each conglomerate’s stations? That would sort of defeat the “local” music aspect of it, wouldn’t it?
We’re going to start a little AM radio here on the island. When theres boats passing through, we might even have a listenership up to 50. Woo Hoo. I am so naive. I thought that the Arcadia So Red The Rose casette tape I won on 79Q was a gift from the radio station… But it was ACTUALLY a gift from SIMON LE BON! Awesome. Too bad I hated it, or the brush with fame might have been cooler. Maybe, I’ll notice a difference in the radio play lists the next time I make it out to a place that has radio.
How MUCH time DOES it equal out to be?
how much does what equal out to be, EM? If my analysis is right, and they plan on giving each station a certain number of half hours where they can play local music, then each station will get about 5 half hours. Is that what you meant?
Heidi, I am sure that becoming President of the Universe is precisely Spitzer’s plan. He seems typical of most progressive politicians who use regulation as a vehicle for political ambitions, to be later abandoned to the unintended consequences which usually come with attempts at regulation. I mean, there’s nothing wrong with that, Spitzer wants his 15 minutes and more, and he’s willing to do whatever he has to do to get it: nothing could be more American. But Justin and Ramon have it right, in that this *might* level the playing fields for a fairly short period until the regulated industry adapts and co-opts the original regulation into their capital scheme. In the end, regulations often end up aiding the existing members of the regulated industry because they create barriers to entry for competitors.
Radio is doomed to this type of scenario precisely *because* radio frequencies are a finite resource with potentially infinite demand. The government decided, therefore, to regulate their allocation in order to be “fair” – with the predictable result that entrenched corporations were able to co-opt this process and gain control of the resources. Clear Channel may not get a chance to individually vet each commissoner of the FCC before they are appointed: that would be too gauche, but one can assume that something which accomplishes the same ends is in place.
The reason the Internet is such a free-for-all and is kicking the entrenched music biz’s ass is because it has a potentially limitless number of “frequencies” on which it can broadcast. RIAA and other defenders of intellectual property rights are fighting it as hard as they can, but probably will eventually lose. Instead, other corporations such as Yahoo or Google will eventually figure out how to consolidate and control Internet resources, and may even develop other ways of managing intellectual property, thereby gaining exploitative hegemony over the “new” media. So instead of us bitching about Atlantic or Clear Channel or Warner Brothers, we’ll be bitching about Yahoo, Google, YouTube, etc. (if we’re not already). But in the meantime, party on – because the Internet is the untamed wilderness right now.
One other comment: Someone may counter my last post on the grounds that radio station concentration actually got worse after “deregulation” by the FCC.
This is probably true, in that it exacerbated a situation that was already bad enough on its own. In defense of my argument I would say that “deregulation” is an oxymoron, because “deregulation” usually amounts to selective tuning of existing regulations to favor certain industry participants, not the actual removal of regulations.
It’s sort of like if one political party says, “OK no more gerrymandering” after they got the redistricting plan in place that they wanted.
Dude, SoH, I think maybe you ought to check Spitzer’s resume & record as attorney general before you start something here.
The Sony case is peanuts compared to the white collar crime he prosecuted against wall street firms that were ripping off/ hiding information from shareholders.
I get that you aren’t into ‘progressive politicians’ and would never try to dissuade you from a belief against regulation. Quite possibly Spitzer’s doings are reported differently in Texas than they are here.
Anyway, here is a link to Jennie’s interview with Spitzer. She’s particularly proud of this piece because she scooped the L.A. Times for this one.
Spitzer’s particular genius is in simplifying and explaining incredibly complex arguements in terms that juries and the public can understand.
The debate about regulation/ deregulation is not applicable to the subject at hand because payola is a crime, not a legislative matter. However, your observations about deregulation not producing increased competition are absolutely correct.
I don’t think the reporting about Spitzer is any different in Texas. I can’t think of any particularly negative coverage of him here. In fact, I would think that he would have a fairly positive perception in Texas, considering all the people who got screwed at Enron wanted justice and he was the only one with an agenda that even approximated that.
Regarding regulation, the FCC has always appeared pretty baffling to me and probably to anybody else who has had any association with radio. Their guidelines are vague and selectively enforced. Even when the rules are enforced, the FCC often comes out looking like keystone cops. Take as an example the incident of Bono saying “fucking” on live television. Initially, the FCC ruled that the use of “fucking” was OK:
“As a threshold matter, the material aired during the ‘Golden Globe Awards’ program does not describe or depict sexual and excretory activities and organs. The word ‘fucking’ may be crude and offensive, but, in the context presented here, did not describe sexual and excretory organs and activities. Rather, the performer used the word ‘fucking’ as an adjective or expletive to emphasize an exclamation. Indeed, in similar circumstances, we have found that offensive language used as an insult rather than as a description of sexual or excretory activity or organs is not within the scope of the Commission’s prohibition of indecent program content.”
But then after a good amount of pressure from busybodies, the FCC reversed the decision, saying that “fucking” is in fact indecent. But they decided not to impose a fine. Contrast that with their reaction to the Superbowl “wardrobe malfunction” which resulted in a fine of $550,000 for CBS.
I sometimes wonder what’s going on there at the FCC, because it seems a lot like they are just doling out penalties by throwing darts at a dartboard. “Ooh, bullseye, that’s gonna be a steep fine for you, Mr. Stern.”
…Yahoo or Google will eventually figure out how to consolidate and control Internet resources, and may even develop other ways of managing intellectual property, thereby gaining exploitative hegemony over the “new” media.
There was a good article this weekend in the Arts & Leisure section of the New York Times about intellectual property rights. For those of you who can make it to SXSW and are interested in this topic, Gilberto Gil will be speaking on Wednesday.
Sigh. 4:30 on Wednesday. Don’t they know some of us work?
Heidi, if I read your comment right, you’re saying that Spitzer’s prosecution of the payola guys is a separate issue from FCC regulation in that it’s a criminal matter – yes, I agree with that semantically, but from a higher view I would say that the laws against payola are themselves a form of regulation.
I guess my ultimate point is that when you have a high value public resource which is allocated to profit seeking corporations by a regulatory body, corruption of the regulatory body is inevitable.
An interesting take on this whole issue is here – essentially saying that frequencies aren’t as scarce as the FCC claims they are, because of new technology, but the FCC and Congress, influenced by entrenched commercial interests (talk about payola!!) want to protect the commercial status quo.
As for Spitzer, like I said – nothing against him, I just see him as another ambitious politician. If he railroaded a few CEOs to set up his run for President in 2012, so be it.
Even with new technology, airwaves are still scarce. And it’s not like the FCC could tell us that we can use those airwaves tomorrow. They are occupied by current broadcasters. The new technology has to be adopted by listeners and broadcasters. This is the problem that we’re having with digital television. The deadline was supposed to be last year, but nobody was ready to make it happen, because viewers who currently watch broadcast television would have to buy a receiver to be able to watch TV.
Once the new technology is adopted, there will indeed be more segments of the radio spectrum free, but until that happens, we’re stuck with what we have.
Ok wait, SoH, these really are two separate issues: one is how many licenses the FCC will grant and the other is record labels bribing stations to play their songs. The FCC isn’t corrupt so much as they are a bunch of political appointees who don’t do their jobs. For fuck’s sake, the chairman of the FCC is vying with Barney for the position of lapdog. Instead of at least pretending to be an independent agency, he goes and publishes that he worked for the Bush campaign on the FCC’s website. Oi.
I like the Slate article.
I guess the point I was trying to make is that concentrating control over limited frequencies in the hands of a few industry players, as the FCC currently does, creates an incentive for labels to bribe DJs. There would still be some incentive if stations proliferated, but it would be harder for a label to get access to the kind of concentrated media power that would make payola worth it.
Or something like that…
And your point about the FCC is well-taken. They are more useful as a lapdog than they are as an active agent of corruption, for the latter would draw scrutiny whereas the former accomplishes the same thing merely by being ineffective.
i’M BLACK AND i’M BACK!!!!!!!!!!