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El Payola

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Scathing report on payola in the American Latin music biz from the Miami Herald:

    Edgar Alvarez quit being a promoter in Spanish-language radio two years ago. But on this afternoon, he is making some calls from the South Miami offices of his recently opened talent agency to show how his former business works.

    First he calls a DJ at an Orlando station, telling her he has to get a song on the air. ”C’mon, Mami, tell me how much, I really need this song,” he coaxes. ”Three thousand,” she answers, her voice thin through the tiny speaker of Alvarez’s cellphone.

    The next call is to a promoter from Alvarez’s native Puerto Rico. ”I’m doing a budget for three songs I have to break in Puerto Rico,” Alvarez says. ”Uh-huh,” an eager male voice replies. ”How much? Give me a total,” Alvarez continues. ”Ten thousand,” comes the answer. ”Cash?” Alvarez asks. “Yes, yes.”

    ”But Papi, c’mon, how many stations?” Seven, the voice replies, ticking off prices for FM stations on the island: $3,500 for one, $1,100 for another, $500 for a third. Alvarez curses under his breath as he hangs up. ”Five hundred is way too little — you know he’s just keeping that for himself,” he says.

    Alvarez’s exchange is just one example of how payola — the illegal practice of paying radio stations to play songs without disclosing the arrangement to listeners — riddles the fiercely competitive world of Spanish-language radio, where artists’ careers and the fate of major record companies depend largely on what songs make it onto the airwaves.

Not subtle, is it?

    It has been an issue since the late 1950s, when scandals and investigations led to current laws. But in Latin music, federal prosecutors say, the practice has become pervasive.

    Because payola adds so much to the cost of promoting a recording — between 20 percent and 30 percent, according to former major-label employees — it cuts out most smaller, independent labels, typical sources for new genres and artists.

Any wonder that Latin pop is such crap when there is so much great Latin music being made?

    ”There’s so much great stuff out there, but it’s not even in the same building as the stuff that’s on the radio,” said Elsten Torres, a songwriter with Warner Chappell Music Publishing. “It’s hurting the industry, and it’s hurting the music.”

    The Latin music market, battling rampant piracy as well as a sales slump, can ill afford the artistic and financial costs of payola. U.S. shipments of Latin CDs were down 26 percent in the first half of this year, according to the Recording Industry Association of America.

    ….According to major-label sources, the head of one of the five major labels tried to get his counterparts to boycott payola two years ago. The effort failed when one label president refused. ”They all had to go with the flow, or it would have been just [one label] on the air,” one source said.

    ….Two years ago, Dan Storper, president of independent label Putumayo World Music, made a short-lived bid to enter the commercial Latin market. Storper was particularly hopeful that one tropical artist, already successful in clubs and noncommercial radio, would appeal to a general audience if he could get airplay.

    After a legitimate radio campaign failed to garner results, Storper talked with a top independent promoter, who told him that airplay would cost a minimum of $50,000 — Putumayo’s entire promotional budget for the artist.

    ”He said this is the deal if you want to go for it, and these are the key stations. . . . It was different fees for amount of times per day or month,” Storper said, adding that the promoter quoted costs of $5,000 a month for airplay on leading stations in Puerto Rico, New York and Miami.

    He said he opted not to pay.

    ….Although a Justice Department source says its investigation indicates that payola in Latin music is pervasive, it is a difficult charge to prosecute. Payola itself is only a misdemeanor. Investigators can try to prove bribery, a felony, but it is difficult to trace cash transactions or cash income, and to prove intent. Few of those taking illegal payments reach the level of unreported income necessary to interest the Internal Revenue Service.

The report is blistering – read the whole thing.

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