NY State attorney general Eliot Spitzer is still making enemies. After b*tch-slapping the mutual-fund industry for giving preferential treatment to big money and screwing small-time investors and after very recently stepping up to the giant insurance brokers who direct client’s to the biggest commission-paying insurance company instead of the one offering best terms, Mr. Spitzer is now getting ready to set the record (business) straight. As most industry heads know, if you want to get a radio dj to spin your artists’ single (or should I say pop the cd into the disc changer?) you have to have the money or props to influence them. At one time (which some would argue includes the present) radio programmers were so notorious for taking bribes that a federal law was passed, known as the payola statute, that prevented them from accepting any “gift” for including a particular song or songs on their playlist. In good form the industry was able to adapt and create a process wherein the radio station still received a payoff from “promoters” who were getting paid by the record execs. After a few decades of people lampin’ and collecting paper for playing what people did not necessarily want to listen to, without feeling any heat, it seems the AG is finally ready to confront sophisticated bribery schemes: (peep excerpt)
Record Labels Said to Be Next on Spitzer List for Scrutiny
Now he is casting his eyes on the music industry, particularly its practices for influencing what songs are heard on the public airwaves. According to several people involved, investigators in Mr. Spitzer’s office have served subpoenas on the four major record corporations – the Universal Music Group, Sony BMG Music Entertainment, the EMI Group and the Warner Music Group – seeking copies of contracts, billing records and other information detailing their ties to independent middlemen who pitch new songs to radio programmers in New York State.
The inquiry encompasses all the major radio formats and is not aiming at any individual record promoter, these people 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.
