Sony Busted for Payola

[jd930]

From Pitchfork:
 
 Sony Busted for Payola!
 
 Rob Kleckner reports:
 Just in from Pitchfork's Crimewatch: New York Attorney General Eliot Spitzer has forced Sony BMG Music Entertainment to stop paying radio stations for airplay. In case you didn't know, this practice known as payola, is illegal. "Our investigation shows that, contrary to listener expectations that songs are selected for airplay based on artistic merit and popularity, air time is often determined by undisclosed payoffs to radio stations and their employees," Spitzer said.
 According to a press release from Spitzer's office, the payola occurred in several forms, including the following: "Outright bribes to radio programmers, including expensive vacation packages, electronics, and other valuable items; contest giveaways for stations' listening audiences; and payments for 'spin programs', airplay under the guise of advertising."
 
 An email found during the investigation, from one executive at Epic to another, read: "At the end of the day, [David] Universal added Good Charlotte and Gretchen Wilson and hit Alex up for another grand and they settled for $750."
 
 Another, from an Epic employee to a Clear Channel programmer looked like this: "WHAT DO I HAVE TO DO TO GET AUDIOSLAVE ON WKSS THIS WEEK?!!? Whatever you can dream up, I can make it happen."
 
 You can't make this shit up, folks. To pay for their crimes, Sony has agreed to donate $10 million to non-profit charities and music education programs. Don Henley, of Eagles fame, commended Spitzer for "successfully addressing the pay-for-play problem. There is no question that payola hurts recording artists. The Recording Artists' Coalition is grateful to him and his staff for exposing the magnitude of the payola problem and for getting a major label to agree to change the way it does business."
 
 In a statement, the label said: "Despite federal and state laws prohibiting unacknowledged payment by record labels to radio stations for airing of music, such direct and indirect forms of what has been described generically as 'payola' for spins has continued to be an unfortunately prevalent aspect of radio promotion. Sony BMG acknowledges that various employees pursed some radio promotion practices on behalf of the company that were wrong and improper and apologizes for such conduct. Sony BMG looks forward to defining a new, higher standard in radio promotion."
 
 What does this mean for you, the music listener? Hopefully it's a sign we'll be hearing a lot less Good Charlotte on the radio. Fans of good music everywhere thank you, Mr. Spitzer. He can likely count on the New York hipster vote when he runs for Governor in 2006.

[Dr. Anton Phibes]

People don't really think stations were playing J Lo's garbage because it was GOOD,do you??! That girl has one talent.....her ass!

[kosmo vinyl]

yeah right this will change the landscape of whats played on the radio... what exactly is going to leap into the place of Good Charlotte and Train?  The Arcade Fire, Ash, Eugene Edwards, The Orange Peels, Annie?  not likely... They'll find away to keep placing records on radio stations...

[amnesiac]

To pay for their crimes, Sony has agreed to donate $10 million to non-profit charities and music education programs.  

Sony should also have to pay anyone that has been subjected to Good Charlotte's "music"

[sonickteam2]

Originally posted by jd930:
  . To pay for their crimes, Sony has agreed to donate $10 million to non-profit charities and music education programs.

which is probably roughly 10% of what they made from committing these crimes.

[jd930]

Originally posted by kosmo vinyl:
  yeah right this will change the landscape of whats played on the radio... what exactly is going to leap into the place of Good Charlotte and Train?  The Arcade Fire, Ash, Eugene Edwards, The Orange Peels, Annie?  not likely... They'll find away to keep placing records on radio stations...

Oh I agree completely. I don't see radio becoming anything I want to listen to any time soon.  But, maybe it is a teensy step in the right direction...surely to be followed by five giant steps back.

[ggw]

This story is kind of a joke.
 
 Sony had revenues of $69.3bn last year and profits of $2.4bn.  $10mn is 0.4% of their profits, or, .014% of revenues.
 
 It probably would have cost Sony more to defend themselves.  Plus, the charitable donation is tax-deductible.
 
 This has more to do with Spitzer's future run for governor of New York than with rooting out bad practices in the music business.

[Jaguär]

I posted about this last night...or very early this morning.
 
 In the end, I just can't imagine the corrupted politicians to ever side with the little guys. I agree with GGW that it's nothing but some kind of grandstanding and nothing will change at all.

[dfmcpete]

I'm surprised only Sony has been mentioned. The way the memos and emails are phrased, it doesn't seem like either side was surprised by the bribe offers.
 
 Does anyone think other labels will be called out? Or radio stations for accepting/soliciting?
 
 Here's hoping that Clear Channel takes a fall...

[Jaguär]

Thought that some of you would like to see a view from the inside.
 
 I find it rather interesting that terrestrial stations get paid to play music while the fucking RIAA makes internet stations pay to play the music that they are inadvertently promoting.

[duderino]

why would spitzer need to 'grandstand'? his biggest rival for governor before he bowed out, gov. pataki, had already been slipping in the opinion polls. spitzer's already considered "the people's champion" for going after the mutual fund industry, investment bankers, and the insurance industry (all have lost billions as a result of the investigations). if anything, continuing to go after big corporations like sony is only making himself less and less popular with the big money donors who find him overzealous and threatening.
 
 i, for one, am thankful that he took on this case. is the attorney general expected to regulate whats on the airwaves and how it gets there? no, that should be the fcc's primary responsibility, and spitzer's investigation is almost certainly going to lead to a follow-up from them. investigations into other record companies (EMI, Warner, Universal) are also still going on, in addition to radio stations (viacom, clear channel).

[ggw]

Originally posted by duderino:
  why would spitzer need to 'grandstand'?

Why would he settle for a token charitable donation if he really had a case?
 
 Because it keeps his name in the papers.  It allows him to chalk-up another "victory" and maintain his image as the People's Champion.  Especially important on the heels of losing one of the few (the only?) of his cases that went to trial.
 
 I think his run for Attorney General was financed wholly by family money, so corporate donations are likely not a priority for him.

[duderino]

even with a recent loss, he's firmly in the lead, even moreso now than when this story broke. as the election rolls around, his name will be in the papers regardless of whether or not he milks 10 mil from sony. plus he already announced he's retrying that loss. if his public image suffered from it, he's already taken steps to prop it back up.
 
 and i don't know if i'd call $10 mil 'token'. yes, their practices were reprehensible, but it doesn't merit a settlement on the same scale with those made in the insurance and mutual fund industries. the punishment is tailored to the crime, not the perpetrator.

[kosmo vinyl]

the whole thing about "promotional" money is that it's not the AG's office that should be looking into it, it's the Tax Revenue department that should be taking it on.  Giving whatever you want to call it, is the way business runs.  So it fine if record companies want to ram their way on to radio, by passing along gifts,etc.  But the receiving party needs to be paying the tax on the item given them.  Think of all the unclaimed taxes.  The Record companies should required to report what they do and the people should pay up. Because in the end the public isn't going to give a rats ass about it.
 
 The bigger issue for the AG should be the independent promoters who serve as the only way to get to a radio station...

[ggw]

Originally posted by duderino:
  even with a recent loss, he's firmly in the lead, even moreso now than when this story broke. as the election rolls around, his name will be in the papers regardless of whether or not he milks 10 mil from sony. plus he already announced he's retrying that loss. if his public image suffered from it, he's already taken steps to prop it back up.
 
 and i don't know if i'd call $10 mil 'token'. yes, their practices were reprehensible, but it doesn't merit a settlement on the same scale with those made in the insurance and mutual fund industries. the punishment is tailored to the crime, not the perpetrator.

I'm not doubting that Spitzer has done some good things, my point is only that he often seems driven more by personal ambition than by altruism.