As a result of investigations by New York state Attorney General Eliot Spitzer, Sony BMG Music Entertainment agreed Monday to pay $10 million and stop bribing radio stations to feature its artists.
Spitzer called payola — illegal payoffs for airplay designed to manipulate record charts, generate consumer interest in records and increase sales — "pervasive" in the industry and indicated the other major labels — EMI, Warner Music Group, Vivendi's Universal Music Group — are also under investigation and could face similar penalties.
Payola "is driving the industry, and it is wrong," Spitzer said. "Our investigation shows that, 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. This agreement is a model for breaking the pervasive influence of bribes in the industry," he added.
Sony BMG — whose labels include Arista, Columbia, Epic, J, Jive, LaFace, RCA, Sony Music International, and So So Def — acknowledged in a statement that some of its employees had engaged in "wrong and improper" practices and that it looked forward to "defining a new, higher standard in radio promotion." It also agreed to hire a compliance officer responsible for monitoring promotion practices, and to develop and implement an internal accounting system designed to detect future abuses.
Spitzer said SONY BMG officials cooperated fully with his investigators and promptly agreed to reforms when the problems were identified. He commended the company for taking steps that "should serve as a model for the rest of the industry."
Federal and state laws bar record companies from offering undisclosed financial incentives in exchange for airplay. The FCC "requires that employees of broadcast stations, program producers, program suppliers and others who have accepted or agreed to receive payments, services, or other valuable consideration for airing material must disclose this fact to the broadcast licensee airing the material. This is required so that broadcasters have the information they need to disclose to their audiences that the material was paid for."
Democratic FCC commissioner Jonathan Adelstein said, “It’s a real tribute to Attorney General Eliot Spitzer that he has blown the lid off a potentially far-reaching payola scandal ... We need an immediate investigation to determine whether these practices violate federal payola laws. I’ve asked Mr. Spitzer to share all of the evidence that he has uncovered with the FCC.”
Article comments
1 - Eric Olsen
note pic of Eliot trying to explain the curtains
2 - lono
I was disappointed that this story was not HUGE. Maybe it is because I am a music dork, but I wanted to see this splashed somewhere on the front page of every paper in America. Between this proven payola, and Clear Channel's monopoly... the music industry is in very dire straits.
No wonder everyone is turning to iPods & Satellite radio.
3 - Eric Olsen
I agree Lono, but it seems like people just don't much care about the business end of entertainment unless it directly affects the entertainment, which of course it does, but they don't much want to hear about it
4 - todd
Yeah and when you start telling people how the FCC is largely to blame for the bad music you hear on the radio, it goes right thru them.
If the FCC didn't regulate the airwaves, and drive up the costs of what is actually a fairly cheap method of communication to the point where only major players could comfortably compete, then there would not be so much consolidation and the "customers" would be the listeners again, not the across the board deals with multimedia companies.
Because then your competitors would lower their advo rates, and start playing music people wanted to hear...
Unless I am missing something
5 - Pam Avoledo
The domination of Clear Channel in the States has killed the single. However, it's the single which could generate some money. In Europe and Australia, the singles there are top-notch.
But in the States, even the single is without any extras (videos, remixes, multimedia gallery.)if one exists. There's a market out there for it (like iTunes) But aside from having a neat gadget, there isnt' any true incentive.
Unfortunately, Sony (as well as the other record companies) have gotten so caught up in the bottom line, they forgot that there are people out there who want depth to their music.
Trends only last a few months, a catalogue album sells forever.
6 - Cerulean
"note pic of Eliot trying to explain the curtains--Eric Olsen"
Watch how you talk about my boyfriend :)
This payola scandal is just the visible aspect of the problem. I feel that all media is coopted by corporations. Sometimes I try to counteract it here by some reviews. A certain movie was being heavily praised and promoted by "reviewers" even though it was crap, so I wrote about that. Another was being trashed without cause and I wrote about that. To me, talent is important. I may be pretty impotent to combat the powers that be but I gotta try. When I find local malls that won't carry our alternative weekly I let them know that that isn't ok and I know that something political is going on. A large theater chain was giving inaccurate times for movie showings to the alternative weekly for their schedule because they were in bed with the daily newspapers. Many times I called out the theater manager when I got there at the wrongly stated time and harrangued him. I always try to confront this stuff.
Maybe you can make a selling point for Blogcritics that we aren't corporately influenced. Independent reviews.
7 - Eric Olsen
thanks Cerulean, maybe you can do an interview for us with your boyfriend?
Not only are we independent, but our writers are independent of us - THAT'S indepdendence
8 - Phillip Winn
Individual writers can be corporately influenced, though. If anybody's reading, I'm willing to accept payola, no problem.
And Cerulean, I'll let you know for which reviews I'm accepting cash, so you can counter them. :-)
9 - Eric Olsen
for best internal balance, I pay myself