It costs a record company about $250,000 just to launch a single on rock radio today. That doesn't guarantee success; it just gives the single access to the airwaves. If the song catches on and eventually crosses over to the mainstream Top-40 format, indie costs balloon to more than $1 million per song.

Critics complain that indies used to develop relationships with programmers and aggressively pitch new songs but that there's much less of that today and too much toll collecting. (That is, an indie gets paid regardless of what songs a particular station plays, as long as that indie has an exclusive contract with the station.)

There's little doubt that promotion costs have recently gone up. One veteran indie says he lost exclusivity to one medium- and one small-market station during last year's Clear Channel bidding process, after a rival promoter made an overly generous offer of $500,000.

"I know what those stations bill, and the only way to make a profit is to hold the labels hostage," says the indie.

According to this source, the math for the deal doesn't add up. He says he used to charge labels $800 for each playlist add at the two stations. Even if the new indie nearly doubles that rate to $1,500 per song, the two stations combined usually add only six new songs a week, which would result in $450,000 a year in invoices, or $50,000 less than what the new indie has agreed to pay the stations for exclusivity.

Of course, one way to generate more revenue is to persuade the stations to add more songs to their playlist. Record company officials say that's now common practice, especially for the pre-dawn hours, when stations will play new songs so that hard-pressed indies can collect money from the labels. But few listeners actually hear the songs played at 3 or 4 o'clock in the morning, so the airplay doesn't do the artist's career any good.

"Independent promotion is money that disappears from a band's pocket, that is charged to the band, and no one knows where it goes or what it actually does," complains Dirk Lance, bass player for the rock band Incubus, quoted in a recent Loyola Law School law review article examining payola. "It's gambling. Ultimately, it's gambling with my money. It's payola, but with unclear results. It's a smoke-and-mirrors game."

That's why labels are increasingly uncomfortable with the system. Yes, they created the monster, but they used to be able to control it to some degree. Now radio giants, like Clear Channel, thanks to their sheer size and leverage, are calling the shots. Suddenly caught in the middle of a severe economic downturn (music sales are down sharply for the first time in two decades), record company executives insist they can no longer afford to pay out millions of dollars to indie middlemen who may or may not create hit records. (Labels do try to recoup some of the indie costs from artists' earnings, but if an artist flops commercially there's no money to recoup.)

This isn't the first time labels have tried to clamp down on indies. In 1981, upset about the influence amassed by a group of powerful indies known as the Network, Warner Bros. and Columbia (in its pre-Sony days) launched a boycott against it. Then, as now, powerful indies were getting $3,000 or $4,000 for each song added to playlists. According to Fredric Dannen's 1990 book "Hit Men," a now legendary industry exposé, the boycott quickly collapsed when the labels' marquee artists, such as the Who, revolted after having trouble getting their songs on the radio.

Four years later, the labels suggested that the RIAA launch an investigation into indies. If the investigation uncovered any illegal activity, the reasoning went, the labels would have a reason to cut their ties to the indies and save millions of dollars.

That investigation was shelved, but the labels got the out they needed the next year when NBC journalist Brian Ross, aided by key record-company sources, aired a sensational report connecting heavyweight indies with organized crime. Soon, major labels announced they were no longer using indies, and a federal grand jury, under the supervision of Rudy Giuliani, then a U.S. attorney in New York, began investigating indie promotion.

Over time, however, the practice reemerged, with the humbled indies charging just $700 an add for a major-market station instead of $3,000. That's where the base rate stayed well into the '90s. Then rampant ownership consolidation swept through radio following the passage of the 1996 Telecommunications Act. As fewer and fewer corporate owners took control of more and more stations, promotion costs began to rise. Today, they're just about where they were during the peak period chronicled in "Hit Men."

Adding to the labels' frustration is that the antitrust law forbids them from agreeing, as an industry, either to dump the indies or slash the fees they pay them. Even if some sort of accord could be reached, the music industry remains a culture of short-term goals and inherent insecurity about where the next hit is coming from.

"Even if you got together [Sony Music CEO] Tommy Mattola and [RCA Music CEO] Bob Jamieson and the heads of all the major labels and said, 'OK, guys, don't pay for adds at stations,' and everybody agreed," says one record company executive, pay-for-play still wouldn't die. "The second a priority record came out and stalled at radio, the pocketbooks would open right up."

That's exactly what indies and station owners are banking on.

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