A-Ha! CD Prices Have to Be High to Fund Record Label Payola

Sony BMG Music Entertainment today agreed to pay $10 million, to be distributed to charities aimed at music education and appreciation, to end an investigation by New York State Attorney General Eliot Spitzer into their pay-for-play practices. Sony also agreed stop providing contest prizes and other gifts to radio stations and to stop paying stations operational expenses.

However, FCC Commissioner Jonathan Adelstein has called for a separate FCC investigation. "It's unfair to listeners if they hear songs on the radio because someone was paid off, not because it's good music," Adelstein said. "We need an immediate investigation to determine whether these practices violate federal payola laws." Spitzer has agreed to share all of his evidence with the FCC.

Spitzer's look into the payola practices in the record industry isn't over either. He said his investigation continues into Universal Music Group, EMI Group, Warner Music Group, and the country's largest radio companies. He said, "We are far along with the other three labels."

Meanwhile, Sony BMG has agreed to acknowledge their "improper conduct" and pledge higher standards in the future. To that end, they have also agreed, to hire a companywide "compliance officer" who will monitor promotion practices.

Spitzer said this investigation revealed that air time "is often determined by undisclosed payoffs to radio stations and their employees." He called the settlement "a model for breaking the pervasive influence of bribes in the industry."

E-mails at Sony showed top officials knew of the payments. A rather enthusiastic employee at Sony's Epic label wrote in one e-mail, "WHAT DO I HAVE TO DO TO GET AUDIOSLAVE ON WKSS THIS WEEK?!!? Whatever you can dream up, I can make it happen." Another employee, unhappy that Celine Dion's "I Drove All Night" was being played very late at night at some stations, threatened to take away a trip to a Dion show in Las Vegas unless play times improved. That's almost the greatest threat ever on so many levels. I wish someone would give me a trip to a Celine Dion show, then threaten to take it away.

Any radio station found to have taken an illegal payment could theoretically lose their license for failing to disclose it. Promoters involved in this activity could face civil and criminal sanctions.

So... at least finally know that all that money made from bloated CD prices hasn't just been going toward diamond-encrusted backscratchers for spoiled execs. It's also been used for bribes! We probably already all very strongly suspected it, but now we know. Oh, the fun the folks in accounting must have had creatively accounting (so to speak) for different sorts of bribes. Plus, they probably sometimes got stuck with a trip to a Celine Dion concert someone else had taken away as a "punishment."

Thank goodness for the possibility of FCC sanctions or Sony would be getting off way too lightly. Although if Sony was engaging in this behaviour in New York, it seems likely they were doing it in other states too. Any state could launch their own investigation...

mp3:Spinal Tap - Gimme Some Money

mp3:Stan Freburg - The Old Payola Roll Blues (Parts One and Two) (From 1960, about another payola scandal. Sadly, this copy is not perfect quality; it has a few little "bloops" in it. Sorry about that. It's just too on-point to not share anyway, if anyone's interested, given that disclaimer)

mp3:Ronny Jordan - No Pay, No Play (jazz, instrumental)

mp3:Liz Phair - Shitloads of Money