The great radio rock 'n' roll swindle

Payola is back. Back in the radio stations, back in the headlines and soon, possibly, back in the courtroom. The New York State Attorney General, Eliot Sptizer, has served subpoenas on the four major labels - EMI, Sony/BMG, Warner and Universal. Spitzer is seeking copies of contracts, billing records and other information detailing the links between the major labels and the "independent middlemen" whose job it is to get certain records playlisted, writes Brian Boyd.

Legally, the situation with payola is that broadcasters are forbidden from taking money or any value in exchange for playing a specific song unless they disclose the transaction to listeners. It's an interesting choice of words that - "disclose the transaction" - as will soon become clear.

Give the music industry's hysterical overreaction to downloading and file sharing, it's deeply amusing to consider their previous attitude to radioplay. When music was first played on the radio, the industry tried to ban it - outright. The argument put forward back then - remarkably similar to the argument we hear over and over again concerning downloading - was that if people could hear music for free, they wouldn't buy it.

In fact, the whole idea of paying publishing companies royalties for radioplay comes from a compromise brokered between the labels and radio stations - the stark truth of it is that most bands will gladly forfeit their meagre radioplay cheque just so long as their stupid song gets any sort of airplay.

When the industry belatedly realised that radioplay actually sells records (and lots and lots of them) they did a complete U and embraced this new marketing tool, so much so that they began paying the radio stations an awful lot more than they were getting back in royalty cheques.

Radio has long been aware of its potent power. If a song is highly rotated, people will buy it. The fact that a substantial number of DJs and radio programmers wouldn't know a good song even if it came in a package marked "This Is A Good Song" and was signed in a legally binding manner by "The Official Good Song Society" is neither here nor there. It wasn't so much that radio started looking for large sums of dosh to play certain songs, it was more that the majors were all too willing to offer large sums of dosh to get their wares played. And yes, this is the same industry that would gladly imprison a teenager for downloading a song without paying for it.

The payola scam was hardly subtle - a record would arrive with a hundred dollar/pound bill enclosed in its case. A wrap of cocaine would always help your case, too (just what we needed: DJs who already talk too much, being offered cocaine - the tragi-comedy of it all).

Payola was so rife right through the 1960s and 1970s that at one particular time songs would appear at the top of the radio playlist charts before they had even been pressed in the factory. Such were the amounts of money involved at one stage, that in the US it is alleged that the Mafia muscled in on the action.

A bunch of legal spoilsports soon ruined the fun, though, and legislation meant that payola had to take on a different name. Bearing in mind the definition of payola above, the new scam was to have the witless DJ announce: "Here is the new single by X presented by Y records". This, technically, made the paid-for song an advertisement. Other inducements were tacky bits of merchandising including with the promo single - but T-shirts and mugs could never really compete with cash and cocaine.

For the past number of years, some sections of the industry have been using independent promoters to do their "radio liaison" work. The deal here is that a major pays an indie who then pays a radio station an annual fee.

This fee appears in audit books as "a payment to obtain advance copies of a station's playlist". Of course it is.

It is this "advance playlist fee" that Eliot Spitzer is currently looking at. A crusading prosecutor, Spitzer specialises in corporate malfeasance and has previously confronted the financial services industry over various questionable business practices.

Not that the music industry has anything to worry about.

bboyd@irish-times.ie