Payola Blues

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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."

More here.

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.

NEXT: Australian for Beer Ad, Mate

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  1. If the FCC already allows transparent payola, aren’t we already ‘simply going with that?’

    Maybe there’s a reason why stations don’t choose to pursue this option.

  2. Why would payola be illegal in the first place? Commissions, referal fees, and kickbacks are an integral part of the business world.

  3. Whatever would we do without the FCC? Oh, that’s right, whatever we damn well pleased. But, no, payola must be illegal, for the children. Won’t you think of the children?

  4. I find the justification for the policy quoted here to be almost as insidious as the policy itself.

    “These rules serve the important purpose of ensuring that the listening public knows when someone is seeking to influence them.”

    This standard doesn’t seem to make any sense, since all attempts at communication constitute attempts to “influence”.

    The notion that there are “fair” ways to communicate and “unfair” ways – that people can be successfully “influenced” in ways that don’t reflect their “true” desires – is the leading ideological edge of the broader movement to restrict communication everywhere: to limit marketing “for the sake of the children”, to prohibit advertising that “poisons” the debate, etc.

    The bottom line of the argument against payola is the belief that somehow by gaining airplay record companies can convince consumers to “like” music that they “really” don’t like. And that’s both an insulting argument, and absurd on its face. As soon as people like a song, they like it – period. There is no way to make a useful distinction between a song I “really” like and a song I only like because of some sort of “payola false consciousness”. The FCC doesn’t have to protect my innocent brain from the horror of liking a song.

    Once you eliminate the implied “unfair influence” argument as the demeaning tripe that it is, there’s nothing untoward or unfair about the practice at all. Payola is merely giving the record company the opportunity to present the song to me, so I can decide if I like it or not. All the airplay they got J-Lo never made me like her one bit.

  5. Since I can turn on certain radio stations and get a little display of what they’re playing at the moment, does the “labeling” of pay-for-play have to be aural or could it simply be textual?

  6. fluffy,

    How many songs do you like that you’ve never heard?

  7. In an era where upstart bands frequently post music for free on their websites, and you can buy songs for $0.99 a pop online, and even get free downloads when you buy fast food promotions, does it really matter if the radio gatekeepers are corrupt?

  8. joe, you mean to tell me you’ve never met someone who loves “everything Pink Floyd ever put out” and can’t name a song that wasn’t on either The Wall or Dark Side? 🙂

  9. thoreau,

    How do you know which upstart bands to google?

    I’m not sure this is a good subject for government intervention, but there’s a lot of kneejerking going on.

    Come on, you’re supposed to be libertarians. You don’t have to take the side of everything the government wants to regulate in order to oppose regulation.

  10. joe-

    Thanks for returning me to my roots. At the end of the day, doesn’t the government have bigger things to worry about than how we’re entertained?

  11. The notion that commercial radio is not corrupt is what fascinates me. By it’s very nature it is trying to influence the listener in order to deliver more listeners to it’s customers: advertisers.

    Not to give non-commercial radio stations a pass on this either. I used to be music director for a small, free form college radio station. It wasn’t called payola because cash didn’t pass hands, but the amount of swag offered to me was amazing. Full disclosure – I took a small amount of that swag. I am sure that some staffs of college stations take a great deal of it.

    Swag isn’t cash and is relatively small bills in what it costs, so it doesn’t equal payola, but you cannot tell me that record companies do not expect it to have some sort of influence when it comes to the playlists.

  12. That’s interesting – are stations that accept payola defrauding their advertisers?

  13. And why is it acceptable for a radio station to offer cash prizes for listening, but record companies can’t offer cash prizes for playing their songs?

  14. This doesn’t seem to be a big deal one way or the other to me. But I can’t agree with the trashing of Neil Young’s post-mid-80s catalog! In particular, Mirror Ball, the album he did with Pearl Jam in the mid-’90s, ranks with his best work (I could listen to “The Ocean” all day).

  15. 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.

    This hard core fan completely disagrees. Neil is like a fine wine….

  16. In an era where upstart bands frequently post music for free on their websites, and you can buy songs for $0.99 a pop online, and even get free downloads when you buy fast food promotions, does it really matter if the radio gatekeepers are corrupt?

    Yes. Because gov’t continues to take a role, perhaps neccessary, perhaps not, in allocating our electromagnetic spectrum. This time around the questions are even more important than they were for fm radio, circ. 1985-2005.

    If corruption and lack of transparency have historically been problems at the FCC, then we shouldn’t just be aware, we should rub our noses in the stink until we are firmly resolved to improve things at the FCC.

    Mr. Gillespie has the right idea and Joe has the correct concern about this idea.

  17. The radio market is sort of “pre-distorted,” in that bandwidth is limited – partially by outdated technology, partially by government edict. Payola is nothing more than a reflection of that distortion. And, like campaign contributions (which it greatly resembles), payola is here to stay, regardless of what pompous FCC Commissioners or frighteningly ambitious attorneys general do or say.

    As a devoutly non-commercial musician myself, I’ve noticed the dramatic rise of niche marketing of music in the last decade or so. I’m a heavy metal guitarist, and there is a whole industry devoted to producing and promoting albums by ‘underground’ metal bands who will never get a sniff of radio play. The odds of you ever hearing music by Nevermore, Arch Enemy, Symphony X or Soilwork on the radio are, basically, zero. And there are numerous other genres whose taste publics are too small (or demographically undesireable) to attract the attention of advertisers, who drive radio, which in turn drives the major labels.

    Since broadcast radio cannot account for the increasingly niche-based nature of popular music, due to a limited possible number of stations, the situation won’t change unless technology forces the issue more than it has to date. Niche consumers rely on Internet sources, such as enthusiast webzines and forums to learn about new acts that might interest them. That’s the wave of the present–who knows what the wave of the future is?

  18. “Sony BMG”

    BMG=bong master general?

  19. Nick, did you really just call Limp Bizkit a potential BENEFIT of pay-to-play? Just checking…

  20. “Sony BMG”

    BMG=bong master general?

    No. Sony merged with another record company. With fewer companies, it is easier to control prices (insetad of having them set by Smithean competition). With fewer companies, it is easier to buy FCC complaisance. Hence the merger.

  21. “In an era where upstart bands frequently post music for free on their websites, and you can buy songs for $0.99 a pop online…does it really matter if the radio gatekeepers are corrupt?”

    No, it doesn’t. Radio is nearly irrelevant in this age of personal playlists and portable music-on-demand.

  22. I’m not sure why it’s such a big deal. Besides, who listens to the radio, anyway? Speaking of which, click on my name to hear some songs!

  23. wellfellow, have you ever played the Blind Pig?

  24. Rich,

    Unfortunately, no, but I play at La Dolce Vita in Detroit every Wednesday. Of course, that is a totally different style of music, primarily latin jazz, standards and world-ish music.

  25. joe: these days the searching part is pretty simple, maybe too simple. find someone whose tastes are similar to yours on the interweb. try some stuff. if it sucks, find someone else.

    or have music nerd friends. it’s a tremendous booster.

  26. ed,

    How do you find new songs to add to your personal playlist?

    Chris O, if the FCC management of bandwidth limits competition – the best way to overcome the establishment’s failure to respond to consumers – does’t that mean the FCC has a duty to take special precautions?

  27. Count me among the Neil Young fans dismissing Nick’s dismissal of Neil’s post-mid-eighties output. Of course it doesn’t have the consistent brilliance of his earlier work, but anybody who declares 1989’s Freedom a bad album gets tossed out of the Neil Young fan club.

  28. Joe:

    That’s besides the point, as far as I am concerned.

    I also don’t like any books that haven’t found a publisher, or any movies where the scripts don’t get made, etc.

    But as soon as I read a book or see a movie and like it or am entertained by it, my response to it is reflexively self-justified. My likes are my likes once I like them. If someone tries to claim, “Well, if publishers, movie studios, record companies and radio stations were more impartial gatekeepers, you’d like a whole different set of artists,” I have to reply, So What? You’re still in the position of trying to protect me from my actual likes in favor of an alternative set of theoretical likes – and that’s just silly.

    Having messed up and mishandled broadcast media in general, the government now thinks it can rectify the situation by attempting to regulate in favor of “merit” by reducing the ability of content providers to coordinate their activities with broadcasters. This puts them in a position of a silliness with two components: one of a “maybe two wrongs will make a right” flavor, and one where they believe they can identify “merit” in the area of arbitrary preference for pop culture content, where depending on how you look at it merit either can’t be measured [at least not by government] or the system is in a state of perfect merit by definition at all times [as above].

  29. Much like politicians buying votes and cola companies buying shelf space, I personally find record companies buying popularity to be immoral. The question for me becomes, do we “do something” about it? I have to say “no” in all of these cases, because I know I will never [again] vote for Bloomberg, drink Pepsi, or purchase the garbage I hear on Top 40 radio. It still rankles to know that most people are much more pliable, however.

  30. I know this is circuitous logic, but I think payola’s not a problem for anyone because if you like the music they play on the radio, then you deserve to hear the music they play on the radio.

  31. Let’s look at this from a little different angle: In the publishing industry, bookstore space goes to publishing companies willing to pay payola. This is also true in the grocery store, by the way. As a consumer, I am denied ready access to the good material – books or groceries – that would naturally float to the “top” because someone bothered to make a better product. Now, I only get to see/buy items for which the skids have been greased -be they of good quality or not – witness any chain bookstore or supermarket today. It degrades a free marketplace where quality at least used to have a chance of being considered.

  32. Isn’t the playing of a song on the radio equivalent to an advertisement for the artist or the album?

    Why should the music industry get free radio advertising when every other industry has to pay for it?

    Every song should really end with: “The preceding was a paid commercial. The views and opinions presented do not reflect those of the owners, management or staff of this radio station.”

  33. Joe, it’s true that no one can like a song that they haven’t heard, but at least part of the point is that radio is no longer the primary source of new music. New music can be found in movies (soundtracks), digital music on cable or satellite, the internet, or even the clearance bin at local stores and thrift stores.
    FCC concern about radio is increasingly irrelevant. Concerns about the FCC regulating cable or other new technologies, however, would be much more relevant.

  34. Good point, Ross. It?s the old libertarian paradox again ? if you end all government regulation of the markets, you?ll often end up with mob rule, which tends to be quite a bit more restricting of one?s liberty than reasonable regulations.

  35. God, Spitzer is such a butthead…

    Am I still allowed to say that?

  36. Ross:

    The problem is that prominent space in a bookstore or supermarket is an asset – and we shouldn’t expect access to that asset to be free.

    You’re expecting to see the selection process of the market as a whole played out on the premises of one participant in the market, and that’s not the right place to look for it. The store owner is not required to himself be “the impartial marketplace”. The store owner is just supposed to run a store. The universe of all stores together is supposed to be the market. There will always be an element of the arbitrary in the selection of products a store chooses to sell. That means that payments received by store owners can’t be viewed as market distortions, any more than a store owner’s personal preference for organic products is a market distortion, or any more than the fact that I can’t walk into a hardware store and order a pizza is a market distortion.

  37. Hey, I figure if payola is legal for doctors (ie. kickbacks for prescricptions) its all good.

  38. joe, what’s the point of asking people repeatedly where they hear about new songs, or find new bands, or what have you? Does it matter where they hear about them? Would those leads have been more legitimate if we had gotten them from over-the-air radio?

    For me, the #1 sources of finding new music are:

    1. An extensive list of mp3 blogs
    2. The websites of the bands that I see featured on those blogs
    3. The links from those websites
    4. Satellite radio
    5. Friends’ recommendations
    6. The websites of record labels that carry artists I already like

  39. All yalls they-fucked-up-fm-but-its-moot-now crowd oughter mosey on over to Reason Express today.

  40. Joe,

    I don’t actually have a personal playlist, but I’ve heard that other people do.
    I listen to music online, not over the airwaves. By the way, most of what’s online is pretty crappy, just like what’s on the radio.
    Except my online crap, of course.

  41. At this point, I’m willing to pay people just to tell me I don’t suck.

  42. At this point, I’m willing to pay people just to tell me I don’t suck.

    Any takers?

  43. Food makers pay dearly for just about every square inch of space and display in any grocery store–

    Thank you for mentioning that, it’s always been something I wondered about, why certain kinds of bribery are considered illegal, and yet in order to find the good crunchy kind of potato chips I have to hunt all over the store because clearly Lay’s et al have made sure that no one else gets space in the chip section.

  44. There’s nothing illegal or immoral about selling shelf space. The shelf space is a valuable commodity, just like any real estate.

    If it helps you to think of it as food companies “renting” their linear feet of shelf space, go right ahead, because I don’t see any difference between a food producer paying for space on a shelf, a hair dresser paying for space in a salon, or a store paying for space in a shopping center.

  45. joe, what’s the point of asking people repeatedly where they hear about new songs, or find new bands, or what have you?

    So he can pretend no one’s answering him.

  46. “Hey, I figure if payola is legal for doctors (ie. kickbacks for prescricptions) its all good”

    it’s not legal.

  47. I can’t believe there’s a whole thread about music and nobody’s posted any lyrics yet.

    From the guys who brought you “Dial-a-Song”:

    “I could never sleep my way to the top
    ‘Cause my alarm clock always wakes me right up
    And since my options had been whittled away
    I struck a bargain with my radio DJ
    I said I’d like this song to be number one
    He said “I’d really really like to help you my son”
    And then I knew that I would have him to thank
    Because he asked me how much I had in the bank”

  48. I don’t actually have a personal playlist

    Depending upon the way you lissen these days, audioscrobbler can be a fun way to track personal playlist. Here is for my household:

    http://www.last.fm/user/Basically/

  49. The greatest test of courage on earth is to bear defeat without losing heart.

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