Spitzer homes in on Big Music
p2pnet.net News- New York attorney general Eliot Spitzer has settled with Sony BMG for alleged payola-style violations.
The record label, the largest member of the Big Four record label cartel, is accused of using improper tactics to influence radio programmers to play its songs, people involved in the discussions said last night, states the New York Times, going on:
The agreement between Mr. Spitzer and the record company, Music Entertainment, one of four music conglomerates under investiation [sic], is expected to be announced on Monday, these people said. They cautioned, however, that the talks were continuing and could still break down.
However, today, “Sony BMG Music Entertainment agreed Monday to pay $10 million and stop bribing radio stations to feature its artists in what a state official called a more sophisticated generation of the payola scandals of decades ago,” says the San Francisco Chronicle.
“Spitzer said Sony BMG’s efforts to win more airplay took many forms, including outright bribes of cash and electronics to radio stations and paying for contest giveaways for listeners. In other cases, he said, Sony BMG used middlemen known as independent promoters to funnel cash to radio stations.”
The other cartel members, Universal Music Group (France), the EMI Group (UK) and the Warner Music Group (USA), have also been subpoenaed.
Last year Spitzer ordered all four (who are suing customers claiming they’re ‘thieves’ and ‘criminals’ for sharing music online with each other) to return $50 million to musicians they’d had under contract.
Somehow, they’d neglected to pay royalty fees to their musicians.
“Mr. Spitzer`s investigation has echoes of the ‘payola’ scandals that roiled the music industry early in the rock n` roll era, in which cash bribes were paid to disc jockeys in exchange for playing certain songs,” says the NYT. For the four decades since, federal law has prohibited broadcasters from accepting money or anything of value in exchange for airplay unless the transaction is disclosed publicly.
“But record companies have long used less-subtle means for currying favor with programmers, including sending them on junkets or providing tickets to concerts and sports events. The companies also employed middlemen who paid the radio stations annual fees which they say are not tied to airplay of specific songs.”
The carttel members, “also took steps to reduce practices that might be construed as bribery, according to people briefed on the policies,” adds the story.
“Sony BMG, for example, said executives could only buy a personal gift, with a cap on the value, for a radio programmer for a ‘life event,’ like a wedding or the birth of a child, according to people briefed on the policy.”
The $10 million will go to not-for-profit entities and music education programs, Spitzer said, according to the Chronicle.
Revised @ 1:02 Pacific
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See:-
New York Times – Spitzer Close to Settlement With Music Conglomerate, July 22, 2005
San Francisco Chronicle – Sony Agrees to $10M ‘Payola’ Settlement, July 25, 2005
neglected to pay – Big Music vs Eliot Spitzer, p2pnet, October 22, 2004
July 25th, 2005 at 9:18 pm
This is how it works. Big corp X has to decide on whether or not to use tactics that may get them in legal trouble. What is the worst case scenerio? Fines? What’s the biggest fine that they may have to pay? If that number is lower than what they can make using the tactic, then it gets used. IMHO Sony has made more than 10M “extra” with payola. They’re STILL laughing all the way to the bank.
July 25th, 2005 at 9:41 pm
$10 million is chump change to these people.
It doesn’t mean anything.
July 26th, 2005 at 5:06 am
YEA maybe BUT if the Good Guys keep an eye on these ass clowns with audits and on going investagations then maybe just maybe they can KILL PAYOLA forever!!!!!!!!!!!!!
July 26th, 2005 at 4:42 pm
No way. if I were to rob a gas station and get $500, got caught and made to pay a $100 fine as my only punishment that wouldn’t stop me from robbing gas stations.
July 26th, 2005 at 11:22 pm
Clearly payola is all over the place. When so much bad music is played, payola is the only explanation. With payola market forces for better quality or price are totally absent. The market is a sham.
But there are several onlookers that should be concerned about payola but are not. These are:
The U.S. government. They do nothing because there is also payola at congress and at government agencies too.
Then there are the so called organizations of artists. As an example, let us consider the case of the music performance organizations. Allegedly these organizations, such as ASCAP and BMI, represent composers. But composers are harmed by payola because compensation to composers have nothing to do with talent and hard work and depends more on connections to the payola of the record companies or plain luck. And what is the position of these so callrd composer organizations as to payola? Actually none.
The tragedy is that everyone in the radio and record industry know that payola is the driving force. Only government doesn’t know.
July 27th, 2005 at 5:56 pm
Just as Im tired of listening to payola songs, a fact that has led me to stop buying CDs, the press payola is also getting to me.
Im fed up with having all three hometown papers running articles on bands and singers that by chance plan a concert here in the next few days. All the articles sound like press releases and one would think think theat the subject of the article was the greatest thing to come along, ever.
Surely someone is paying for the crap that is fed to us as news.
Press, please take notice, we see what you are doing. Stop it. Give back respect to juornalism.