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Wednesday, Nov 25, 2009
Sources in the music industry call for a federal clampdown on the new payola.
Apr 3, 2001 |
If you have to pay $10,000 to shut your boss up, goddamn it, you pay. -- A major-label executive
For an industry that has been bedeviled by federal investigations in recent years, the music business would seem like an unlikely one to call for serious governmental overview. Yet that's exactly what's happening.
Concerned about the pervasive and costly pay-for-play independent-promotion system that has become entrenched at commercial radio, some are wondering if it's time for federal regulators, in effect, to save the industry from itself.
"There are lots of brilliant people who've gotten out of the business because they're sick of it," says one broadcaster who's both owned stations and more recently managed a cluster of influential music stations in a top-10 market.
"They're tired of people making an obscene amount of money -- and that is the right word, obscene -- and the obscene amount of abuse that's going on. It's just wrong. We need regulators to look at it, someone who stands up and says this stinks. Because the airwaves belong to the public, they're federally licensed. You can't do anything you want with them."
The question has become more pressing with the announcement that industry heavyweight Clear Channel Communications, which owns 1,200 radio stations, is on the verge of finalizing an exclusive agreement with the independent promotion firm Tri State Promotions and Marketing.
As a recent report in Salon detailed, record companies pay the independent promoters, or "indies," hundreds of millions of dollars each year to ensure that the records the companies release get played on the radio; the indies, in turn, slip the radio stations a large chunk of this income in the form of on-the-books "promotional expenses." With a partnership formed, the rivers of money start flowing between labels, indies and stations.
Radio's big bully
A complete guide to Salon's coverage of Clear Channel and the new payola
Sources say that the money goes to the stations below-board as well: They say that broadcasters get money in different forms -- in vacations at hotels and on cruise lines, and in American Express gift certificates, all of which leave no paper trails. In the end, it's doubtful that even the extraordinary sums the record companies admit they're paying equals the actual amount of money changing hands.
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The pending Clear Channel-Tri State alliance, the industry worries, will give Tri State extraordinary leverage and the clout to charge record labels even more money for station airplay. And it will solidify a system that awards the airwaves to the highest bidders.
"It's outright bribery and extortion, and it's nothing more than payola," complains Bernie Cyrus, executive director of the Louisiana Music Commission, part of the state's Department of Economic Development charged with promoting the state's $2.5 billion music industry.
