As they detail in the report this system of bribery had been in place in the United States since the 1950s. In the 1960s Federal laws were passed to prohibit the practice however record labels and radio stations simply began using middle men to pass benefits which included cash payments, favours and goods.
In 2003 the New York Attorney General conducted an investigation with out of court settlements being reached and record labels forced to compensate the public for distorting the communications system. The compensation of over $30 million was used to set up music education programs. A voluntary agreement was also entered into by the radio stations allowing for independent music air time and rules of engagement establishing acceptable industry standards.
These rules specify that radio stations should establish non-discriminatory procedures for music submissions and access to radio station music programmers. It is also important that stations do not form relationships with music companies, independent promotion companies, or others who may seek to influence the content of the music played on air. There should be open access to all independent promoters rather than exclusion of independents as a class. Furthermore and of fundamental importance, there should be no direct or indirect benefit passing in exchange for the playing of music with internal tracking systems to allow for transparency of any promotional offers.
The Future of Music Coalition raise a number of concerns with respect to the settlement and voluntary agreements. In particular the voluntary agreement does not have any real enforcement provisions and is separate to the rules and regulations of the Federal Communications Commission. This raises questions as to accountability and compliance.
The time afforded to promoting independent music is also questionable given that it has been offered on a voluntary basis and is quantified at 4,200 programming hours. This does not specify how this amount of time will be allocated nor does it provide a long term commitment for the inclusion of non label artists.
Such a practice is particularly problematic as it prevents independent artists from gaining exposure to listeners. Radio remains one of the key drivers of CD sales and for bringing audiences to concerts. The payola system created an environment in which some artists were favoured over others with those making the payments unaccountable and the public left ignorant of the practice.
Despite being able to access independent music over the internet, many independent artists struggle to attract and sustain an audience large enough to enable them to support themselves financially from their creations. Unless there is a level playing field for radio air time these artists are far less likely to succeed. Major record labels have in the past had too much influence over the content of radio programs and unless concerted and ongoing efforts are made to ensure fairness, this system will remain distorted.
Further Reading
Future of Music, Change That Tune Introduction (July 2008)
<http://www.futureofmusic.org/research/payolaeducationguide.cfm>
Digital Music News, Senator Prods Radio Conglomerates on Payola Compliance (12 July 2007) <http://www.digitalmusicnews.com/stories/071207feingold/view> at 15 July 2007
Digital Music News, FCC Issues Payola Decrees Involving Terrestrial Conglomerates (16 April 2007) <http://www.digitalmusicnews.com/stories/041607fcc> at 17 April 2007
Digital Music News, Major Radio Conglomerates, FCC Forge Payola Agreement (5 March 2007) <http://www.digitalmusicnews.com/stories/030507payola> at 7 March 2007
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