Thursday, January 17, 2008

The Payola Elephant in the Room

Radio World editor Paul McLane has a commentary in the latest edition: We Need to Mend Some Fences. Paul talks about how broadcasters and music labels are at each others' throats and how the arguments have gotten ridiculous.

Well of course they have, both industries are based on ridiculous concepts...namely profitability through the restriction of access to intellectual properties...that simply is not viable in the internet age. You can draft laws, you can sue college kids, but in the's just too damn easy to share an MP3; the margins on music have always been fairly thin (despite the image of the filthy rich rock star) and internet file swapping just demolishes them.

So both sides are attacking each other for every dime they can because they can't deal with the real problem. I'm not speaking metaphorically, I mean literally the entire music industry and radio industry is based on concepts and restrictions that cannot adapt to the free-access model and maintain the necessary profits to sustain the existing infrastructure. In other words, sooner or later they'll have to destroy themselves in order to rebuild themselves. But they ain't there yet, and in the meantime many corporate suits have mortgages to pay so lock and load those lawyers and lobbyists!

Anyways, Paul's commentary has a glaring omission: payola. The practice of music labels paying broadcasters to air certain songs. Or, perhaps more accurately, the practice of broadcasters refusing to air certain songs unless paid by the broadcasters. Payola is illegal, but the statute is weak and, since Alan Freed in 1962, hasn't really been enforced too for a much-hyped but arguably ineffectual crackdown by then-NY Attorney General Eliot Spitzer.

From the music labels' perspective, it's bribery pure and simple. The perception of most of the so-called "independent promoters" or "indies" that are a buffer between labels and stations (to skirt the payola laws) as being one step removed from Mafiosos (or not even one step) certainly doesn't help the image of extortion. I direct you to the infamous tale, told in Fredric Dannen's excellent payola expose "Hit Men: Power Brokers and Fast Money Inside the Music Business" of how Pink Floyd's 1980 monster hit "Another Brick in the Wall pt.2" was not heard on a single Los Angeles Top40 station until their label coughed up the indies...and how within 24 hours of payment, the single was everywhere. That dynamic had been in play for over twenty years in 1980, and it's only gotten much, much worse in the 28 years since.

The broadcasters really don't have any defense here. They could refuse to accept the "indie's" payments and just hire people to, amazingly, review the music internally and weigh it on its own merits and grant airplay accordingly. But they don't, and with over $40 million annually at stake, it's not hard to see why: greed.

So viewed in that light, the oft-touted broadcaster defense that they shouldn't pay any extra royalties for playing a label's music because they provide value in the form of promotional airplay, suddenly doesn't ring very true any more. Frankly, the label is paying through the nose to the station for that hard-to-define "value"...value that is arguably losing influence every year as more and more kids tune out AM & FM in favor of iPods and file sharing.

This does not change the fact that the RIAA is arguably the greatest shakedown artist in the history of legitimate businesses. Well, perhaps not "legitimate" but they are technically a "legal" business, anyways. Even that's open to debate. Regardless, RIAA is slime...and the music labels are coated in their slime, too. But it's not like radio stations are coming up the very least they are "pond scum" themselves, if not full-bore "slime".

I admit, I'm not truly impartial here. I run a college radio station, and I don't deny there's a part of me that only wishes I could get my share of those millions of payola dollars. But we don't...we choose music the hard way: we review the dozens (sometimes hundreds) of CD's that are mailed to us every day, and pick which ones we feel belong in heavy rotation and write reviews for our DJ's help them decide as their program their own shows. It's a lot of work, and probably 90% of what comes through the door never gets played at all...and at least half of that 90% is just flat out "crap" anyways. But we do the work because that's what it takes to be a "new music" station.

Unfortunately, thanks to labels, RIAA and stations all trying to kill each other, we're likely going to get caught in the crossfire; forced to pay additional royalties on a scale meant for multi-million dollar radio conglomerates. Ugh, thanks a lot. Guess we'll go news-talk only when that happens.

And as always, who gets hurt in the end? That's right - the struggling musicians themselves; denied one of the last few "pure" outlets for their music.

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