[Dixielandjazz] SONY SETTLES - PAY TO PLAY SUIT BY NY STATE ATTORNEY GENERAL

[Steve barbone]

No wonder OKOM is never played on the radio. The gift of a trip to Laughlin
Nevada and a free stay in a camper just doesn't cut it these days in the
slimy world of payola. :-) VBG

Hey musicians, time to take back the music from the Philistines. It is the
folks like Sony and the disc jockey's who sell their souls for a pair of
Sneakers that are primarily responsible for the crap on the air today. The
audience is ready for some good music.

Do your own thing with Indie promotions, your own CDs and your own promo.

Cheers,
Steve Barbone


Radio Payoffs Are Described as Sony Settles

By JEFF LEEDS and LOUISE STORY July 26, 2005 NY Times

To disguise a payoff to a radio programmer at KHTS in San Diego, Epic
Records called a flat-screen television a "contest giveaway." Epic, part of
Sony BMG Music Entertainment, used the same gambit in delivering a laptop
computer to the program director of WRHT in Greenville, N.C. - who also
received PlayStation 2 games and an out-of-town trip with his girlfriend.

Eliot Spitzer, the New York State Attorney General, announces an agreement
to halt pervasive "pay-for-play² practices in the music industry.

In another example, a Sony BMG executive considered a plan to promote the
song "A.D.I.D.A.S." by Killer Mike by sending radio disc jockeys one Adidas
sneaker, with the promise of the second one when they had played the song 10
times. 

The gifts, described in a $10 million settlement with Sony BMG that was
announced yesterday by New York's attorney general, Eliot Spitzer, exemplify
what Mr. Spitzer called a broad effort by the recording industry to curry
favor with radio station programmers in exchange for their promises to play
specific songs. 

The focus of Mr. Spitzer's inquiry is now expected to shift to the other
three major record companies - Vivendi Universal, the Warner Music Group and
the EMI Group - and the radio companies whose employees have accepted gifts
in exchange for playing songs. Mr. Spitzer's investigators have served
subpoenas on several radio companies, including Clear Channel Communications
and Emmis Communications.

"This is not a pretty picture; what we see is that payola is pervasive," Mr.
Spitzer said, using a term from the radio scandals of the 1950's in
describing e-mail messages and corporate documents that his office obtained
during a yearlong investigation. "It is omnipresent. It is driving the
industry and it is wrong."

As part of the deal, Sony BMG acknowledged "that various employees pursued
some radio promotion practices on behalf of the company that were wrong and
improper, and apologizes for such conduct."

Yesterday, the company fired the top promotion executive at its Epic label.
And it disciplined four executives in its Sony Urban unit and at Epic by
imposing financial penalties and placing them on probation, said two people
briefed on the actions.

Sony BMG also agreed to pay a $10 million fine, to be distributed to
nonprofit organizations that promote music education; to follow new policies
governing its efforts to cajole programmers; and to better monitor its
promotional spending.

The finding that gifts were used to help tailor the playlists of many radio
stations comes as audiences show signs of rejecting the music choices made
by programmers. The iPod and other portable devices have begun cutting into
the popularity of radio, and the growth of satellite radio has been putting
pressure on the station owners to play a broader range of music.

For more than four decades, federal law has prohibited broadcasters from
accepting secret payments or anything of value in exchange for airplay of a
specific song. While music companies have long tried to sidestep the law,
Mr. Spitzer says they have continued to violate it.

The state investigation found that Sony BMG, which releases music by acts
including Jennifer Lopez, Good Charlotte and Beyoncé, had provided stations
with entertainers for station-affiliated concerts or paid for station
equipment or other bills in exchange for having its songs played. It also
provided vacations and electronic goods for on-air giveaways in a direct
trade for airplay. And it hired independent promoters to funnel money to
radio stations. 

In addition, the investigation found that the company had tried to distort
industry airplay charts - creating the false impression that a song was
taking off - by paying stations to play its songs as sponsored
advertisements. It has also used interns and hired vendors to call radio
stations with requests.

As a result, Mr. Spitzer said in the settlement documents, "Sony BMG and the
other record labels present the public with a skewed picture of the
country's 'best' and 'most popular' recorded music."

While many of the promotions detailed by Mr. Spitzer appear to come cheap -
for example, $939 to fly a Buffalo programmer and a guest to New York City
in connection with the addition of a Jennifer Lopez track to the playlist -
they add up to millions of dollars a year. More than that, the settlement
documents provide an unusual window on a sector of the music business where
the public airwaves are discussed as a commodity, and where little is
allowed to stand in the way of bolstering a song's chart position.

In one case cited by Mr. Spitzer, an executive at Sony BMG's Columbia
Records label - after learning that airplay for the John Mayer song "Bigger
Than My Body" had declined on certain stations that had accepted a promotion
package from the label - told his staff in October 2003 that "many stations
here will NOT be given the promo with the airplay" being given at the time.
"Either deal with it or pull it," the executive said.

In other cases, Mr. Spitzer said, Sony BMG, a unit of Sony and Bertelsmann,
had negotiated large deals with radio conglomerates, in which the record
company would fly dozens of national contest winners to see an artist
perform. In return, the radio station would commit to playing specific songs
a certain number of times a week. He cited one case in which Epic had struck
a deal with Infinity Broadcasting involving the Celine Dion song "Goodbyes."
By e-mail, an Epic executive, whose name was not disclosed, said each
station had committed to "report" the song on its playlist on a certain date
in October 2002.  

Infinity declined to comment. Clear Channel said that it was cooperating
with the inquiry and that "the allegations made today will be fully
investigated and any wrongdoing will be met by swift and appropriate
disciplinary action."

It remains to be seen how far-reaching the impact of Sony BMG's new policies
will be in altering the culture of promotion. As part of the settlement,
Sony BMG agreed to an array of changes. For instance, the company said it
would no longer provide stations with cash or gift cards, which are
difficult to track, for use in listener contests. The company also said it
would no longer use "spin programs," in which it pays stations to play songs
as commercials, to manipulate the charts.

The company is also expected to end its relationships with independent
promoters unless they meet strict new guidelines, a prospect that many
consider unlikely. 

In a practice once widespread, the promoters acted as middlemen paying 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 labels for each new song played; the total tab costs the
industry tens of millions of dollars a year. Under the new rules, Sony
cannot reimburse promoters for any expense for a radio station or contest
winner. 

The industry has been divided over the impact of the settlement. Many
executives say Mr. Spitzer's inquiry amounts to too little too late: radio
companies like Clear Channel and Cox Radio severed their deals with
independent promoters before the investigation began, for example.

Others, including several independent record labels, say the settlement
could signal a shift that might break the major record companies' chokehold
on the airwaves. 

"This sounds to us like something that will be very helpful," said Don Rose,
president of the American Association of Independent Music. "It's obvious to
us that we're not getting the fair share because of the embedded
relationships with big radio."