Back on July 27, on the heels of a settlement between New York Governor Attorney General Elliot Spitzer and Sony BMG on the issue of giving radio stations crap in return for air time, Reason's Jacob Sullum asked the musical question, Why Is Payola Illegal?
One reason: Because the Federal Communications Commission sez so. And they've just reiterated that policy:
"The FCC has longstanding rules prohibiting payola," FCC chairman Kevin Martin said. "These rules serve the important purpose of ensuring that the listening public knows when someone is seeking to influence them. Broadcasters must comply with these rules. The commission will not tolerate noncompliance. While payola may not be a widespread practice in the broadcasting industry, to the extent it is going on, it must stop."
Wasn't the original payola scandal–the one that pretty much fried Alan Freed and let Dick Clark go on to become the world's oldest living teenager–one of the multiple occasions when America lost its innocence? Why is it so scandalous to think that record labels–which all have massive promotions departments–might in some way compensate radio stations to spin particular disks? And while we're at it, shouldn't we question whether there are real benefits to pay-to-play? Ask Limp Bizkit, who helped jumpstart their career through just such a deal.
The question should be more about the transparency of the payment, rather than the payment itself. Indeed, even the FCC will allow pay-to-play that is labeled as such. Why not simply go with that–and have different types of radio stations? One could be pay-to-play and one might be "real independent." That is, it would refuse any bribes by record companies to select certain songs over others and generate a reputation as a tastemaker.
Pay-to-play is in keeping with a lot of retail operations. Food makers pay dearly for just about every square inch of space and display in any grocery store–and even a good deal of bookstore space is auctioned off to higher bidders. This isn't as sinister as it sounds, either: General Foods (or Random House) is not going to spend a lot of dough promoting a product that is unlikely to hit with a big audience (though it's true you never know what will hit and what will flop). And markets that fail to move product (or gain listeners) because they don't respect the demands of consumers will go out of business.
Compensation deals that undercut credibility–say, in news operations, or when it comes to reviewing books or records–would tend not to flourish in areas that require or reward such things. Or the opinions expressed in such situations would be discounted. Indeed, this already happens sans payola issues (when's the last time you expected a truly tough review/interview/profile in Rolling Stone about any of Jann Wenner's rock 'n' roll pals?)
Side note to Neil Young, author of "Payola Blues": The reason you never hear your record on the ra-d-i-o–or more precisely, why you don't hear your post-mid'80s discography on the airwaves–is because your music has really gone downhill. And that's a hardcore fan talking.