Payola: Another Brick in the Wall

We're living in the era where bands are prepackaged for our convenience, and then the packaging itself is repackaged as a serial documercial and sandwiched between paid ads. The kids whose billions pay for this machine are not only fully aware it's a sham, they embrace the cynicism and still manage to enjoy the show. So I'm guessing nobody will be stunned to learn that, a week ago, the L.A. Times uncovered documents showing that record labels are still buying radio airplay, at some stations, the same quasi-legal way they've been buying it for twenty years. But it's an interesting story, and it's as good a launching point as any for thinking about the next twenty years. ("Payola" is the first of three Slashdot features on music distribution. Parts two and three run tomorrow and Thursday.)

Pink Floyd's The Wall set the standard for amazing stage shows. It was the kind of thing that makes me wish I'd lived in L.A. or New York in 1980 (and been out of grade school, I guess). In February 1980, they played five sold-out L.A. shows, inflatable pig, airplane and all, the epicenter of cool. The double album was number one and would stay there for four months.

But although you can hear "Another Brick in the Wall, Part Two" played on L.A. oldie stations today, at the time, you wouldn't have heard it on any station in the city. Total blackout. The record labels used a network (creatively called The Network) through which they exerted control over which songs got on the air.

But in 1980, The Network was in revolt.

To understand why it even existed, we have to go back to Alan Freed's Rock and Roll Show in 1960. One of the first rock'n'roll DJs, Freed was busted in 1960 for taking $2,500 in bribes to play records. He claimed the money was just a thank-you with no influence, but he still went down. He only paid a small fine, but his career was ruined and he died soon after.

As a result of the scandal, Congress passed a law against "payola" in 1960. We'll get into fine ethical distinctions later, but basically a radio station that secretly takes money to spin a song is guilty of payola.

Note that just coming out and admitting a spin was bought is perfectly legal: if that Limp Bizkit play was paid for, just say so and your station is home-free.

Break the law and you might be fined up to $10,000. Payola is a misdemeanor. Theoretically, someone might spend up to a year in jail, but according to Hit Men , published in 1990, nobody has ever spent a single day behind bars.

There have been convictions, yes. Last year, after the L.A. Times turned up some evidence, Clear Channel Communications paid an $8,000 fine for promoting a Bryan Adams single and billing his label. The bill, by way of comparison, was for $237,000.

Clear Channel did well over $1 billion in revenue last quarter and has almost $50 billion in assets. "During the first quarter of 2001, we acquired 126 radio stations in 36 markets...."

But convictions are few and far between, partly because of the layers created between the labels and the stations. Post-Freed, a niche job was created to, essentially, be the go-between from the labels to the radio stations.

The job title is "independent promoter."

The promoters work for the labels. Each week, they talk to the program directors of radio stations in their region, and try to convince the stations' program directors [PDs] to add the labels' songs to the playlist.

And competition is fierce. There are only about 30 slots that get heavily played on any given station, and most of them carry songs over week-to-week. Ten new songs in a week would be heavy turnover; usually it's much fewer, and all the labels are fighting for those slots.

The question is how the promoters "convince" the program directors. By building a relationship with each PD, based on trust and knowledge of each station's market? Or by bribes, paid in dollars or some other currency?

The Network, a small cabal of promoters working together, became famous in the early 1980s for making or breaking songs, depending on how well they were paid. That's where "Another Brick in the Wall" comes into the story. After years of lean revenue, combined with rising costs in fees paid to the Network, CBS experimented with cutting them off.

And CBS got burned. The hit single from the number-one album in the country, in a market of three million, was blacked out. While the band was playing sold-out shows, not one of the city's four big Top-40 stations would play the 45.

Shortly after Pink Floyd's last show, the promoters were rehired, and within hours the song was back on the radio (top of the charts for weeks). It was pretty clear who owned the air.

How much money was CBS trying to save? Here's a quote from 1983, which I find amusing because the speaker is John Gotti's second-in-command -- a mob underboss who can appreciate a good racket when he sees it:

"That kid in California came in to see me, said ... they give him fifty thousand to a hundred thousand to push a record. The company, they pay you, just to make a record on the air, you know..."

A lot of money. This explains why CBS wanted to try it again, testing the promoters the next year as well. In early 1981, the company's labels boycotted them entirely. In retaliation, The Network targeted "Turn Me Loose," the first single by the new band Loverboy. After breaking into the Billboard charts with a star, it rose quickly, but peaked only at number 37 before falling off the bottom.

The next target was The Who's "You Better You Bet." Its appearance was even more promising, appearing at number 63 with a superstar. But it peaked at 18 and fell off the charts quickly.

CBS was convinced. Its boycott began to crack, and within months it ended.

By 1986 the abuses had grown serious enough to merit an investigative report by NBC. Calling the indie system "The New Payola," they uncovered evidence of The Network bribing DJs with cash and cocaine, and threatening them with violence. Senator Al Gore launched a Senate probe. And the RIAA quickly issued a short statement announcing that they would not tolerate illegal activity, but denying any wrongdoing (and reminding everyone that they had done Live Aid the year before).

In reality, the labels were glad for the coverage. It gave them the chance they needed to take the promoters down a few pegs, saving them all a great deal of money. In a few weeks, all the labels had joined in a boycott. Nobody knows real dollar amounts, but The Network's income, probably measured in the tens of millions, dropped drastically.

And since 1986, things have been different. But are we right back now where we started? The president of RCA Records claimed in 1987 that his industry had paid $50 to $60 million a year to the promoters. Last week's L.A. Times story (go read it) claims it's now a "$100-million-a-year trade."

We've come a long way since Alan Freed and his twenty five hundred bucks.

I talked last week with Woody Houston, a PD for the market leader Top-40 station in my hometown. (Disclosure: the company that owns his station competes with Clear Channel.)

Woody has seen examples of corruption, but nothing like some of the abuses of the 1980s -- maybe because we're not in a big city. He's had promoters offer to pay his way to conferences, but he's turned them down. Company policy is to fire anyone who takes such an offer, even though that's pretty small-time compared to some of what's been documented.

I described the L.A. Times story to him, and asked him to try to clarify where the line gets drawn, ethically:

"If Clear Channel is using those dollars for promotional support -- let's say Interscope wanted to put $2500 behind Smashmouth -- if they're buying T-shirts that have my call letters on the front, I don't see a problem.

"There's a fine line between buying airplay and promotion. If they're taking the thousand dollars that they got for 25 spins and not using it to support the record, that's wrong. If they just give the money away on the air, that's wrong -- that's the ethics of it."

When the system works, it does its job. You may or may not like the results -- Top-40 can't please everybody of course -- but the radio airwaves are a limited public medium that should be accountable to its listeners and advertisers, not the companies that make the product. Radio stations' PDs compete by doing their research, making the judgement calls they get paid to make, and seeing their Arbitron ratings, and advertising rates, rise or fall accordingly.

When it doesn't work, it's -- well -- it's a Wall, a barrier of moneyed inertia between new artists who want to be heard and the audience who wants to hear them.

Music has been an industry for the last hundred years, so we've never known what it might be like to strip out some of those barriers. In the next two installments, I'll throw out some ideas to kick around.

Tomorrow: part two, a look back at music distribution technology of the last 200 years.

(I mentioned Hit Men earlier. Most of my sources for the industry's history come from this 1990 book by Fredric Dannen. Its research is thorough, heavy on names, dates and places; Dannen talked to just about everybody and had a good nose for what was credible. Highly recommended if this subject interests you. He's got another book that looks good, too, with an inside story on the Hong Kong film industry.)

Update, 10:45 AM EDT: Salon ran a story on payola today too, a good one. Deja vu to 1980/81, but this time, Destiny's Child's label is not even trying to boycott the promoters, they're just scaling back how much they're paying them -- even this is considered risky.

Salon on "independant promoters"

It's even worse than this article presents... promoters will bill labels even is station managers decide to play the song on their own.

Check Pay for play [salon.com] and Fighting pay-for-play [salon.com].

Why?

Instead of everybody jumping on the "it's illegal so it must be bad" bandwagon, how about we take a step back and ask:

WHY is it illegal?

Is there really a compelling government interest in making sure that one company doesn't pay another company to perform a service? I mean, if the radio station is playing music people don't want to hear, we'll stop listening, right?

Does it really matter so much that it ought to be enforced at gunpoint?

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Let them do what they want

Of course they're corrupt. The moral bankruptcy of the mainstream music industry is only too well documented.

I say that it doesn't matter. What's really corrupt is slickly packaged, trite, utterly empty rubbish that passes for music. There's no law against that, and there shouldn't be.

The music industry are scavengers, cleaning up on second handers who don't want to listen to music they like so much as music they are told that other people like. That they ruthlessly exploit musicians is another topic.

My suggestion is that if you don't like what you hear on the radio, turn it off, and support the small labels trying to change the way the business operates; e.g. Chris Cutler's Recommended Records, John Zorn's Tzadik [tzadik.com], or Robert Fripp's DGM [discipline...mobile.com]. That all of the above are run by world class veteran musicians should be no surprise - they've been there, done that, got the t-shirt and the shaft.

This explains a great deal about Napster

No wonder they are all paranoid about Napster et al! Obviously, they are willing to pay a great deal to get thier songs to the masses, but now the power is in the hands of the individual.Yes, people still download what is on the radio, but in time that will change.

When we are talking about THIS much money, someone somewhere is getting really scared.

An American Problem

OK, this is a rant.
I've lived in four countries; Germany, US, Sweden and Australia, and I have to say this quite simply. American media is the worst. By far.
The reason is simple, the business of America is business, the research of America is business, the government of America is business and art in America is just business.
On the plus side, Americans are rich and pay is good, at least if you've got a degree and work hard and are a bit lucky. But, it means you have to watch over promoted shit from Hollywood, watch TV that is utterly crap, watch professional sports that are little more than long ads and, if you're silly enough to listen to the radio, listen to virtually uninterupted crap.
Honestly, Americans talk about choice but there is none. I live in a city of about 1.5 million and there is less choice in films here than there was in Australia in a city of 300,000. Try listening to Australian radio - triple J broadcasts on the internet. There is a radio station that plays good new music, rather than Britney spears. And as for TV. Well, cable here has less variety than Australian, Swedish or German free to air.
It's all money, and money produces crap entertainment in the long run. Just like American fast food, fatty, dull and tasteless after a while.

Breaking down the wall

(Warning, I've ranted about this before, so if it seems familiar it probably is.)

Between musicians & fans involves fans being able to directly-pay musicians, bypassing the inefficient layers of "corruption" inherent in the current system. e-gold (among other options) now makes this possible in ways un-dreamed-of in the days of Alan Freed, and it's going to lead to good things for artists and fans (greed-disclamer -- and me!). Slashdot readers are free to contact me for a free spot of my favorite currency if you want to play with our Shopping Cart [e-gold.com]. e-gold works for this because e-metal payments are pushed, rather than pulled, and settle instantly and internationally. Yes, I'm a greedy self-interested capitalist, but we've been ignored for a long time in favor of failed systems that try to be a real currency but can't, for a variety of reasons. e-gold, in either a tipjar or pay-per-listen model, is what will work today. e-gold has been in the black for over a year, and is not a typical overhyped dot.com (in fact, I'm pretty-much the entire hype-department, in many ways!).

I happen to prefer the tipjar idea to pay-per-listen because I like voluntary stuff, and I have enough faith in what's left of human nature to think that most of us will leave tips. I also have enough faith in the greed and inefficiency of the RIAA to think that tips will end up benefitting artists more than the present system, but I have no proof (yet!). I'm giving e-gold away because it's in my interest for programmers to try and play with e-gold. Thanks for listening, as always I speak only for myself -- since nobody else would claim these opinions anyway.
JMR
AKA Cassandra, among other names...

If you're looking for more on this...

Check out the Frontline (excellent PBS news magazine) episode The Merchants of Cool [pbs.org]

It's not only the radio stations...

Last night a DJ saved my life

To understand why it even existed, we have to go back to Alan Freed's Rock and Roll Show in 1960. One of the first rock'n'roll DJs, Freed was busted in 1960 for taking $2,500 in bribes to play records. He claimed the money was just a thank-you with no influence, but he still went down. He only paid a small fine, but his career was ruined and he died soon after.

If you're interested in more information about this, I just finished reading a book called "Last night a DJ saved my life: The history of the Disc Jockey". It outlines the rise of dance music in the 20th century, and starts with an in depth history of radio disc jockeys.

One of the interesting things it mentioned was that although Freed was the first person busted for 'payola', he was by no means the only one accepting it at the time. Apparently it was common practice at that time too. The book claims that Freed was busted instead of other DJs because of his love for rock made by black musicians, which he would play instead of the sanitized rock made by white musicians.

Telestra: All your bandwidth are belong to us.

Internet killed the radio star...

Is anyone really surprised by this? After all, radio is the most heavily commercialized venue for music you're liable to find. Most Top 40 stations play nothing but typical commercialized drivel anyway. Considering that traditional music outlets like radio and MTV hardly spend more than a third of their time actually playing music, no wonder everyone's gone on the Napster bandwagon. I've heard a more diverse selection of artists who aren't attached to the RIAA or the big labels through the Internet than traditional media have allowed. You better believe it's causing me to buy fewer major label CDs... because I actually can find *better music*. It's a win for good music, and a loss for the kind of crap that radio wallows in. Radio's a wasteland for the most part, and they're doing everything they can to help their bottom line. (Why else would they resort to giving money away to get listeners?) These payola deals are just one way of helping stave off oblivion before Internet mobile radio becomes practical and traditional radio dies comepletely.

Bless you, BBC

I was recently in America, and I was surprised to hear the same songs being played over and over again on not only the same stations, but on almost every other station on the dial. It was almost as if they were all running a continuous loop of five songs.

So, thank fuck for the BBC. No commercial interests means no Payola. No Payola means no endless drivel of the same stuff all the time. BBC Radio 2 has recently become the most listened to station in the UK, the main reason being that it plays a massive mix of old and new music.

I'm sure most of you already know, but the BBC also webcast both Radio 1 [bbc.co.uk] and Radio 2 [bbc.co.uk] over RealMedia streams. If you live outside of the UK and want to know what a non-commercial, music playing radio stations sounds like, I recomend you try them. You might be surprised.

P.S: http://www.bbc.co.uk/radio1 & http://www.bbc.co.uk/radio2 for those who don't like links in posts.

Changing music tastes

Disclaimer:Most people wouldn't give a crap about the stuff I'm about to speil. So, don't read it if you don't want to.

Several things happened to change my tastes in music when I went away to college a couple of years ago.

1) The first and major thing that changed was that I was no longer in High School worrying about such trivial things such as fitting in with the "cool" group. Not that I really cared all that much for such things anyway, but when everybody in school was listening to a certain CD and were exclaiming how good it was I would go out and pick up the CD too. I wanted to see what all the fuss was about. So, I mostly listened to what was popular at the time. I listened to what everybody else listened to. Of course, that just happened to be the pre-packaged crap that the music industry was spewing out, and paying good money to do so. But, once I got to college I stopped caring as much about such things

2)I went to college out of state and met many new friends who had come from different areas of the nation. Namely, they came from areas where there is something of a local music scene. (If there's any kind of local music scene here in Arkansas, I wish somebody would clue me in as to where to find it. All we ever get is the mindless, corporate crap.) As such, they had chances to see some of the lesser known bands and experience music that I'd never heard before. And these friends introduced me to this new music. I didn't realize that there could be such good music out there, and that it was good music that I'd never heard of. I had just assumed that if it were any good, then it would be played on the radio.

3)I went to school in a city that had a bit of a local music scene of its own. As such, I was able to experience a much wider array of music in person, than I ever had before. These were bands that had never come to Arkansas and probably never would.

4)Napster. Let's face it. Whether the record companies like it or not, Napster has changed the face of music forever. Now(or rather then; Napster is useless now), any time somebody mentions a band that I might like, I simply had to fire up Napster and download a few of their songs. If I liked them, I went out and bought the CD. If I didn't, oh well, nothing lost.

It is because of these four factors that I was able to discover a whole new breed of music: that of the non-prepackaged, corporatized crap. I found good music by talented artists who, more often than not, were making music to make music and not making music to make money. (Don't get me wrong on this point. Making good music can be very time consuming and can be very hard work. Good artists should get paid for their work.) I look at the popular music scene these days and I'm glad my music tastes have changed. I don't think I could have stomached the current boy band trend otherwise. Don't they remember New Kids On The Block? They know how it ends. Anyway, I encourage everybody who doesn't already to go out and give some lesser bands a try. You might like them.

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Mp3 Payola

It's not as if the same thing isn't happening on the internet. MP3.com Payola [mp3.com] is at least honest about it.

D
Mad Scientists with too much time on thier hands

Re:Internet killed the radio star...

Granted, you still have to wade through a lot of crap, but at least it's *different* crap.

Sure, I could find good independent music on the internet too, if I had the time to wade through lots of crap. Thus my question: how do you find good independent music without wading through lots of crap?

Admittedly, having to wade through some crap is inevitable, as each person's definition of "crap" varies with taste. I'd like to listen to more independent music, but I don't have the time to listen to twenty bands I don't like in order to find one I do.

The issue isn't necessarily that independent or obscure music is always better... its about the *choice* to listen to those artists. Radio doesn't provide that.

I won't argue with that. But the flip side is that, even though the radio may only play 50 different bands, it's not too difficult to find the 5 that I like. How do I find the good music among 50,000 bands?

(I'm not trying to attack independent music; this is a sincere question.)

Heavy rotation sucks...

One of the local "alternative" rock stations (how can they be an "alternative" when there's so many of them, and they're all the same?) just completed a weekend of programming that was not based on their usual rotation system.

Basically, the DJ's dug up some of their old (and new) favorites and played those instead. Oh, it wasn't like they went too far out on a limb... they were all songs that had been played on the station at one time or another, when they were "current".

Still, the listener response was overwhelmingly positive, with comments such as "Man, I haven't heard some of that stuff in a while. You guys should do this more often!" The DJ's agreed, but sadly they were back to playing the same old schlock on Monday morning. Why? The payola system, most likely.

Sad.

As a former station employee

I can tell you this sort of thing happens every day. I have seen numerous times when we needed a prize to give away for a summer or fall book promotion and normally our indie or record label would "donate" a prize in exchange for us playing a new song in late night rotation. Take a listen to your favorite station between midnight and 5am and see how many new songs are playing that you normally don't hear. About 70% of all the songs we played on the overnight shift were favors to labels or indies. It's just one of those things that everyone in the industry knows about and kind of accepts. But to be honest, it's nice for the pd to have a big screen tv shipped to his house so the record companies can show their appreciation. Hell, I've even seen an extra jet ski and trailer sent to a station on "accident".

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