The InsiderOne Daily Report

  Thursday, May 31, 2001

Surprise! Payola Is Alive And Well

InsiderOne's Michael Goldberg writes: The funny thing about investigative reporting, at least when its target is the music business, is that nothing you didn't already know is ever turned up, and then nothing ever seems to come of it anyway. On Tuesday (May 29), the Los Angeles Times reported that payola was alive and kicking. Amazing! What a shock! I never would have thought! According to an article by the very excellent reporter Chuck Philips, "internal documents obtained by the Los Angeles Times indicate that several independent promoters keep detailed logs — called 'banks' — listing the date a station airs a song followed by a dollar amount collected from the artist's label. The stations that add the most songs over the course of a year build the biggest banks and consequently earn the largest fees." In other words, according to Philips's story, many radio stations are collecting fees, based on playing particular songs, from independent record promoters (middlemen who serve as hands-off liaison between the labels and the stations). As we all know, it is against Federal law for a radio station to play songs in exchange for money or anything else of value. Nonetheless, since the '50s, money has gotten into the hands of some radio programmers, and certain songs have gotten airplay because of it. What you may not know is that a violation of that Federal law earns you essentially a slap on the wrist — when the government does succeed in getting a conviction, it's usually the tax-evasion charges that land people in jail (if someone is collecting money under the table, they're usually not paying tax on it). The last major government payola investigation was in the mid-'80s. NBC broke the story about payola and the mob's ties to the record business. When the NBC story was national news in 1986 I was working for Rolling Stone. I spent the next year or so investigating the independent record promotion business, and wrote a series of published stories detailing cash and drug payments in exchange for radio play. I had sources who had participated in the exchanges. One record promotion kingpin was the target of the government's investigation, but he slipped away due to a legal technicality. Briefly, in the wake of national publicity, the record business backed off. The labels made a big deal of saying that they were no longer using independent record promoters. Not that they admitted that any indie promoters were doing anything wrong. They just didn't want the appearance of being involved with anyone who might be doing something questionable. Time passed, and new methods (as well as some of the old ones) of "pay for play" were institutionalized. If you listen to the radio, you know as well as I do that no one with functioning ears could possibly be programming songs based on the concept of offering the listening public good music. But then you also know that the public actually spends money on millions of copies of non-music by the likes of Britney Spears and Mariah Carey and many others. My gut feeling is that payola or no payola, commercial radio will always be a wasteland. Don't get me wrong. I'm happy to see Chuck Philips doing his best to ferret out corruption in the music business. But I also believe that in time, as Internet radio becomes omnipresent, the radio stations that now have influence will lose some of it. There may come a time when it's just not worth it anymore for money to change hands in exchange for airplay.

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Michael Goldberg is the president of He founded Addicted To Noise in 1994.

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