- Those paragons of virtue, the Big Four record cartel members, are again squarely in the sights of New York State attorney general Eliot Spitzer for dirty dealing.
In May, Spitzer ordered Universal Music Group (France), Sony-BMG Music Entertainment (Japan and Germany), the EMI Group (UK) and the Warner Music Group (USA) to return $50 million to musicians they'd had under contract.
Now payola is the issue and Spitzer is looking for contracts, billing records and other information detailing their ties to independent middlemen who pitch new songs to radio programmers, says the New York Times, going on:
"The inquiry encompasses all the major radio formats and is not aiming at any individual record promoter, these people [sources] said. Mr. Spitzer and representatives for the record companies declined to comment.
"The major record labels have paid middlemen for decades, though the practice has long been derided as a way to skirt a federal statute - known as the payola law - outlawing bribes to radio broadcasters.
"Broadcasters are prohibited from taking cash or anything of value in exchange for playing a specific song, unless they disclose the transaction to listeners. But in a practice that is common in the industry, independent promoters pay radio stations annual fees - often exceeding $100,000 - not, they say, to play specific songs, but to obtain advance copies of the stations' playlists. The promoters then bill record labels for each new song that is played; the total tab costs the record industry tens of millions of dollars each year.
"The new scrutiny comes at an inconvenient time for the major record companies, which have been pressing federal and state law enforcement officials to shut pirate CD manufacturers and the unimpeded flow of copyrighted music online."
This last is in reference to the all-but dead anti-p2p INDUCE Act, ironically shut-down by the cartel's own RIAA (Recording Industry Association of America), and its sue 'em all campaign under which Big Music hopes to terrorize former 'consumers' into once again buying 'product,' as music is known to the corporate music community.
Apple introduced iTunes in January, 2001, as a loss-leader for its iPod player. It's become the de facto benchmark for corporate music sales online with the current number currently at 150 million.
However, compared to what's happening in the real world of online music, 150 million is so paltry it doesn't even register.
Thanks to the p2p file sharing networks and applications, more than a billion music files move between and among computers around the world every month.
The corporate music business as it used to be is stone dead but the Big Four cartel hasn't yet been able to grasp that. In this 21st century, peer-to-peer - p2p - applications will be the means by which music, movies, software and anything else which can be digitized, will be promoted, sold and distributed.
As far as payola is concerned, "One promoter, who spoke on condition of anonymity, said Mr. Spitzer's investigators 'are not going to find anything; they're 20 years too late'," says the NYT story.
The way pay-for-play works is, "independent promoters pay radio stations for the exclusive right to 'represent' those stations, to act as a kind of middleman between the radio station and the record company," says a 2002 Salon report. "Generally, the indies pay between $100,000 and $400,000 per station, depending on the size of the market.
"Once that deal is signed, the indie sends out weekly invoices to record companies for every song added to that station's playlist. This is not technically considered payola under current laws, by the way, because indies don't pay station employees money to play a specific song.
"Those invoices add up. Every song added to an FM radio playlist comes with a price: Roughly $800 per song in middle-size markets and $1,000 and more in larger markets, up to about $5,000 per song for the biggest stations in the biggest markets. Most stations add between 150 and 200 songs to their playlists every year."
Expect disingenuous Gosh Golly - Us? statements from the RIAA.
