Payola

This article is about a legal term. For the Canadian band, see Payolas. For the New Zealand band, see Payola (band). For the Northern Irish band, see Pay*Ola.

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Payola, in the American music industry, is the illegal practice of payment or other inducement by record companies for the broadcast of recordings on music radio, in which the song is presented as being part of the normal day's broadcast. Under U.S. law, 47 U.S.C. § 317, a radio station can play a specific song in exchange for money, but this must be disclosed on the air as being sponsored airtime, and that play of the song should not be counted as a "regular airplay".

The term has come to refer to any secret payment made to cast a product in a favorable light (such as obtaining positive reviews).

Some radio stations report spins of the newest and most popular songs to industry publications. The number of times the songs are played can influence the perceived popularity of a song.

The term payola is a blend of the words “pay” and “Victrola”, a trade name of early home music reproduction devices from RCA Victor.^{[citation needed]} Payola has come to mean the payment of a bribe in commerce and in law to say or do a certain thing against the rules of law, but more specifically a commercial bribe. The FCC defines "payola" as a violation of the sponsorship identification rule that recently resulted in tens of millions of dollars in fines to cable corporations in New York.

History

"Payola, in one form or another, is as old as the music business." ^[1] In earlier eras there was not much public scrutiny of the reasons songs became hits. The ad agencies which labored for NBC radio & TV show Your Hit Parade for 20 years refused to reveal the specific methods that were used to determine top hits.^[2] Attempts to create a code to stop payola were met with lukewarm appreciation by publishers.^[1]

Prosecution for payola in the 1950s was in part a reaction of the traditional music establishment against newcomers.^[3] Hit radio was a threat to the wages of song-pluggers.^[1] Radio hits also threatened old revenue streams; for example, by the middle of the 1940s, three-quarters of the records produced in the USA went into jukeboxes.^[3]

Alan Freed, a disc jockey and early supporter of rock and roll (and also widely credited for actually coining the term), had his career and reputation greatly harmed by a payola scandal. Dick Clark's early career was nearly derailed by a payola scandal, but he avoided trouble by selling his stake in a record company and cooperating with authorities.^[4] Attempts were made to link all payola with rock and roll music.^[5]

The amount of money involved is largely unpublished; however, one deejay, Phil Lind of WAIT in Chicago disclosed in Congressional hearings that he had taken $22,000 to play a record.^[6]

Partially out of payola concerns, a very large majority of DJs are cut out of the song-picking decisions and are instead told, in the form of a playlist, what to play and when, by their superiors (who may include music directors, program directors, general managers, and even owners).^{[citation needed]}

Third-party loophole

A different form of payola has been used by the record industry through the loophole of being able to pay a third party or independent record promoters ("indies"; not to be confused with independent record labels), who will then go and "promote" those songs to radio stations. Offering the radio stations "promotion payments," the independents get the songs that their clients, record companies, want on the playlists of radio stations around the country.

This newer type of payola was an attempt to sidestep FCC regulations. Since the independent intermediaries were the ones actually paying the stations, it was thought that their inducements did not fall under the "payola" rules, so a radio station need not report them as paid promotions.

Former New York State Attorney General Eliot Spitzer prosecuted payola-related crimes in his jurisdiction. His office settled out of court with Sony BMG Music Entertainment in July 2005, Warner Music Group in November 2005 and Universal Music Group in May 2006. The three conglomerates agreed to pay $10 million, $5 million, and $12 million respectively to New York State non-profit organizations that will fund music education and appreciation programs. EMI remains under investigation.^[7][8] The largest independent firm headed by Rick Hendrix of the Rick Hendrix Company was cleared of any wrong doings and became the only promoter reinstated with full rights.^{[citation needed]}

Concern about contemporary forms of payola prompted an investigation during which the FCC established firmly that the "loophole" was still a violation of the law. In 2007, four companies (CBS Radio, Citadel, Clear Channel, and Entercom) settled on paying $12.5 million in fines and accepting tougher restrictions than the legal requirements for three years, although no company admitted any wrongdoing.^[9] Because of the increased legal scrutiny, some larger radio companies (including industry giant Clear Channel) now flatly refuse to have any contact with independent promoters.

"Pay to play" for live music

While payola involves payments for the playing of recorded music, the related practice of "pay[ing] to play" involves payments by bands to promoters or club owners to play live at a live venue, club, or auditorium. Most often a band does this to get increased exposure to a large audience.

The promoter is usually looking to minimize the financial risk involved in putting on an unknown band by asking them to help ensure the cost of the event are covered somewhat by their own efforts, rather than leave it all to the promoter. This usually involves the band pre-selling tickets, publicising the event etc. In return they get a platform for their artistry. As a band builds a following the risks are diminished.

In rock and metal music, some clubs and bars ask some bands to pay to perform. Metal/rock drummer Richie Rivera states that the best clubs to play "...are usually pay-to-play (or what the clubs call 'pre-selling tickets')". Rivera says that while his band has done "pay to play" to perform at venues, in the future, the band will "...only do it for a support slot for a national act."^[10]

Jazz trumpeter Marvin Stamm has described a similar "pay to play" issue in New York city jazz clubs. Stamm says that if a jazz "...artist or group is new or unknown, some clubs - even the larger clubs - will ask that the artist or group’s record company guarantee that the club will break even. If there is no record company to back the artist, then he will probably have to guarantee this himself." If there is a poor turnout at the club, the jazz band leader may have to pay hundreds of dollars to the club.

In the US, there are "pay-to-play" "Battle of the Bands" contests where bands pay to perform on stage.^[11] Billboard Magazine's Oct. 21, 2006 article "Pay to Get Played" described how a "third-party booking agency in New Jersey" called Audible Spectrum Records was "charging bands up to $350 per show, promising services and opportunities that were never delivered." "Battle of the Bands" are becoming increasingly common in both the U.S.A. and Europe, particularly the U.K. Typically, each band that enters the "battle" will pay a fee, returnable only if a minimum number of tickets is sold for the first round of the contest. Progress in the contest is dependent on "votes". A prize is usually given to the winner.

Criticism

On September 25, 2007, the U.S. Congress held a hearing on hip hop music entitled From Imus to Industry: The Business of Stereotypes and Degrading Images.^[12] In her testimony, Lisa Fager Bediako argued that misogynistic and racist stereotypes permeate hip hop music because record labels, radio stations, and music video channels profit from allowing such material to air while censoring other material. In that context, Fager stated:

Payola is no longer the local DJ receiving a couple dollars for airplay; it is now an organized corporate crime that supports the lack of balanced content and demeaning imagery with no consequences.^[13]

Satire of payola practices

In 1960, Stan Freberg did a parody on the Payola Scandal, by calling it "Old Payola Roll Blues", a two sided single, where the promoter gets an ordinary teenager, named Clyde Ankle, to record a song, for Obscurity Records, entitled "High School OO OO", and then tries to offer the song to a Jazz radio station with phony deals that the Disc Jockey just won't buy it. It ends with an anti-rock song, saying hello to Jazz and Swing, and goodbye to amateur nights, including Rock and Roll.

In episode 6 of season 4 of the CBS show Cold Case, the detectives investigate the murder of a DJ in 1958 who was suspected of accepting a payola.

The Vancouver, BC, new wave band the Payola$ chose their moniker during the punk explosion of the late 1970s.

The practice was criticized in the chorus of the Dead Kennedys song "Pull My Strings", a parody of the song "My Sharona" ("My Payola") sung to a crowd of music industry leaders during a music award ceremony.

The They Might Be Giants song "Hey, Mr. DJ, I Thought You Said We Had a Deal" is another song about the practice. It is narrated from the point of view of a naive and inexperienced musician who has been coerced by a disc jockey into paying for airplay – the disc jockey then disappears and does not deliver on his promise.

The song "Payola Blues" by Neil Young from his album Everybody's Rockin'. It opens by saying "This one's for you Alan Freed" and then states "'Cause the things they're doing today would make a saint out of you," implying that Payola corruption is bigger now than it was in the '50s.

The practice was also referenced in Billy Joel's song "We Didn't Start the Fire," during the verse dealing with the events of 1960.

"Sell Out" by the Reel Big Fish can be seen as a satire of payola scandals.

In 2002's video game "Grand Theft Auto: Vice City" the DJ for Flash FM, in a Freudian slip admits that the station used an inverted payola (the musicians paid the station off) scheme to have Love Fist's songs on the radio ahead of their concert.

The Basque country band Berri Txarrak record a LP/CD called Payola.

The Dead Milkmen song "Methodist Coloring Book" contains the line "God is honest; he don't take payola."

See also

• Alan Freed
• Radio promotion

References

Notes

1. ^ ^{a b c} "Pluggers war on old curse". Billboard magazine (Nielsen Business Media, Inc.) 61 (44): 3, 13, 47. October 29, 1949. ISSN 0006-2510. 
2. ^ Dunning, John (1998). On the air: the encyclopedia of old-time radio (revised ed.). Oxford University Press US. pp. 739. ISBN 0195076788. 
   Only a general statement that hit status was based on "readings of radio requests, sheet music sales, dance-hall favorites and jukebox tabulations"
3. ^ ^{a b} Cowen, Tyler (2000). In praise of commercial culture. Harvard University Press. pp. 164, 166. ISBN 0674001885. 
4. ^ "The Jordan brothers: A Musical Biography of Rock's Fortunate Sons," by Maxim W. Furek. Kimberley Press, 1986.
5. ^ "Has payola cued a new inspirational wax kick?". Billboard magazine (Nielsen Business Media, Inc.): 6. Jan 16, 1960. ISSN 0006-2510. 
   "Even now after the payola scandals and the attempt to link all payola with rock and roll recordings, the music with a beat still dominates over 60 percent of The Billboard's Hot 100 chart. This isn't to say that rock and roll isn't fading, or actually evolving into pop music, but .... "
6. ^ Richard Campbell et al, Media and Culture: An Introduction to Mass Communication, 2004
7. ^ Leeds, Jeff; Story, Louise (2005-07-26). "Radio Payoffs Are Described as Sony Settles". The New York Times. http://www.nytimes.com/2005/07/26/business/26music.html. 
8. ^ Ross, Brian; Walter, Vic; and Esposito, Richard (2006-05-11). "New Settlement in Payola Probe". ABC News. http://blogs.abcnews.com/theblotter/2006/05/new_settlement_.html. 
9. ^ Dunbar, John (2007-04-13). "FCC unveils settlement with radio firms". USA Today. http://www.usatoday.com/money/economy/2007-04-13-2144814802_x.htm. 
10. ^ Rising Stars: Madison Paige (cached version). Retrieved 05-Jan-2009.
11. ^ Girl Trouble official web page (cached version). Retrieved 05-Jan-2009.
12. ^ "From Imus to Industry: The Business of Stereotypes and Degrading Images", Committee on Energy & Commerce, accessed on September 20, 2011.
13. ^ "From Imus-to-Industry: The Business of Degradation in Rap Music", UCLA, Center for Communications & Community, October 03, 2007.

General

• Cartwright, Robin (August 31, 2004). "What's the story on the radio payola scandal of the 1950s?." The Straight Dope.
• Coase, Ronald (1979). "Payola in Radio and Television Broadcasting." Journal of Law and Economics 22: 269-328.
• McCarthy, Jamie (June 5, 2001). "Payola: Another Brick in the Wall." Slashdot Features.
• Boehlert, Eric (March 14, 2001). "Pay for play." Salon.
• Dannen, Fredric (1991). Hit Men: Power Brokers & Fast Money Inside the Music Business. New York: Random House. ISBN 0-679-73061-3. Frederic Dannen.
• The FCC's Payola Rules "[1]" FCC's consumer publications.
• Palmer, Robert (1995). Rock & Roll: An Unruly History. New York: Harmony Books. 325 pages. ISBN 0-517-70050-6. Robert Palmer (writer).

External links

• "Joint statement on current issues in radio" on May 2002 by recording artist groups.