Sony's Mega Payola Pay Out
Not that it's surprising or anything, but apparently getting radio stations to play a Jennifer Lopez song is a crime in New York.
Sony BMG decided to get right with New York State Attorney General Eliot Spitzer, agreeing Monday to pay $10 million to the state in a blockbuster payola settlement that has rocked the music industry.
Among the revelations coming out of the settlement: Sony BMG routinely gave radio deejays and music directors cash or gifts to hype Sony BMG artists like Lopez.
In one email memo obtained in response to the lawsuit, a Sony radio promotions exec wrote: "Please be advised that in this week's Jennifer Lopez Top 40 Spin Increase of 236 we bought 63 spins at a cost of $3,600."
The "Get Right" singer's camp had no immediate comment on the label's pay-for-play practices involving her music. But Sony and its affiliated labels (including Arista, Columbia and Epic) did not limit their aggressive radio campaigns to Lopez.
Audioslave was linked to the scandal in a series of dispatches that showed VPs would do virtually anything to get an add at stations in large markets. "What do I have to do to get Audioslave on WKSS this week?" one missive read. "Whatever you can dream up, I can make it happen."
While outright pay-for-play was thought to be finished after strict legislation was enacted following scandals in the late 1950s, Spitzer characterized the practice as still "pervasive" in the music industry. He threatened to take on other labels in the wake of his success with Sony BMG.
Record companies routinely hire independent record promotion companies to secure airplay for their artists in the increasingly competitive corporate-owned radio environment, but outright gifts of laptops or trips tied to radio "adds" are prohibited under a 1960 federal law.
Still, Spitzer's suit against Sony BMG said the label was engaged in precisely that kind of payola scheme over the past few years--in a big way.
Industry watches declared the deal a victory for music fans.
"The new restrictions will foster competition within every facet of the music industry," said Scott McKenzie, editor of Billboard Radio Monitor. "This will drastically change the way business is done and ultimately steer radio in a positive direction.
"Record labels will likely return to more conventional routes of advertising," continued McKenzie, "a move that will not only solve the payola problem, but help radio stations in the process."
For its part, Sony BMG tried to move beyond the scandal, saying in a statement some of its employees had engaged in "wrong and improper" practices.
The label, whose market share dipped from 34 percent in the first half of 2004 to just 27 percent this year, also said it looked forward to "defining a new, higher standard in radio promotion" going forward.
One member of the FCC said that the email trail uncovered by Spitzer and his investigators was "a whole arsenal of smoking guns."
"This is a potentially massive scandal," Jonathan Adelstein, a Democratic member of the FCC, told the Associated Press. Spitzer has handed over his evidence against Sony to the commission, which could penalize any stations found to have been willing partners in payola.
Meanwhile, the $10 million penalty will go to nonprofit music-education programs, Spitzer said.
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