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Thursday, Nov 26, 2009
Flashback to the '80s: Those rules used to hold sway in the world of pop radio promotion as well. In 1988, for instance, pop indie promoter Ralph Tashjian was charged with bribing programmers with cash and drugs, as well as tax evasion and obstruction of justice. He pleaded guilty to one payola charge and filing a false tax return, and admitted having sent a Fed-Ex package of cocaine to an employee at a Fresno, Calif., radio station.
More recently, Latin radio was rocked when the head of promotion for Fonovisa, the largest record label in the genre, pleaded guilty to illegally paying off DJs at Spanish-language stations to play its songs.
According to payola laws, it's a crime for a station employee to accept payment for playing a song if the station fails to notify listeners about the financial arrangement.
Today, indie promotion for country, pop and rock remains influential but at least makes an effort to stay within the letter of the law. Following the government's late-'80s crackdown, it has simply become much more corporate, with large indie operations -- the best connected of which are Jeff McClusky and Associates and Tri State Promotions and Marketing -- signing above-board deals with individual stations.
In exchange for paying the stations an annual promotion budget ($100,000 for a medium-size market), the indie becomes the station's exclusive indie and gets paid by the record companies every time that station adds a new song. (Critics say it's nothing more than a sanitized quid pro quo arrangement -- station adds song, indie gets paid.)
Admits one Top 40 indie: "You can't see it but you sense it's out there -- the kickback." But pop and rock indies have their lawyers periodically pore over their books to make sure the transactions, while ethically questionable, remain technically legal.
Urban promotion, on the other hand, remains largely unchanged, or unchallenged, by any reform efforts.
As an industry practice, independent promotion is rarely discussed in public and press coverage is frowned upon. Yet even against that backdrop, the secrecy surrounding urban promotion has been deafening. Salon contacted scores of urban record-label executives and radio programmers for comment; all declined to be interviewed on the record.
How hush-hush is it? Consider the straight-arrow urban P.D. who turned a top-75 market station around. He got labels to pay for vacations for listeners who won call-in contests; he lured big-name artists to make in-person visits to the station; he even boosted employee morale by giving staffers custom station jackets.
How did he afford it? "The [promotion] checks were made out to the station, not Fed-Exed to a P.O. box number," he says today.
When the station owner expressed amazement about what the programmer had done for the station, the P.D. simply explained the situation. "He didn't know the previous P.D. was taking money," the P.D. recalls now. That's how hush-hush it is.
Pick up any music-industry trade guide and you'll see dozens of independent promotion companies for rock, pop, country, even jazz listed. Only the major urban players are missing. They don't advertise.
Nonetheless, some inside the world of urban radio and record promotion agreed to talk to Salon about how the business operates. All requested anonymity.
They suggest the problem of payoffs is widespread. "I think every reporting urban station is taking money," says one format programming veteran. He's referring to the 100-plus stations that, because of their audience size or influence, are asked to "report" their playlist each week to a trade magazine, such as R&R or Billboard.
Is the practice that widespread? "What do you mean 'widespread'? It's all the [urban] stations everywhere," says another urban industry vet.
If a station reports, the monetary value of the playlist increases, since the songs chosen can affect the trade magazines' weekly charts. And from a record-company perspective, radio is all about pushing singles up the chart.
According to an urban-radio programmer, if a station reports just to R&R, a song added to its playlist is worth roughly $500. If the station reports to both R&R and Billboard, it's worth roughly $1,200. (In major markets that figure can go much higher.)
So for an urban station reporting to both trades, and adding five new songs a week, that's $6,000 a week, or $300,000 a year in tax-free income. Whoever controls the playlist pockets that money. It could be the station program director, a consultant, a vice president from corporate programming or even the station owner.
As Salon has reported, virtually all the songs played on a typical commercial radio station -- known as "adds" in the trade -- are paid for. And while some traditional payola undoubtedly exists in the pop, rock and country world, more times than not that money goes toward the station's bottom line to purchase promotional and marketing items (billboards, station van, etc.), or to help pay bands for an annual all-star concert.
What's different in the urban world, according to format sources, is that most or all of the money goes directly into somebody's pocket at the station.
