P2P: Pay-to-Play? The FCC Issues Final Decision on Payola
By: Christy Mannering
“Airwaves belong to the public, not the highest bidder,” those are the wise words spoken by Eliot Spitzer, New York’s attorney general. He is the catalyst who started the ball rolling in uncovering the payola scandal. On Friday, April 13th the Federal Communications Commission (FCC) ended the largest payola investigation to date since the law was passed in 1960 by invoking a consent decree.
Major record labels such as Universal and Warner went under investigation during the summer of 2005 for paying radio stations to play their selected music. Ironically, those same mainstream labels are fighting people (or shall I say IP addresses) for illegal P2P activity claiming a loss in profits; while behind closed doors they are participating in illegal payola churning out the dough to radio stations.
Radio stations also received hefty fines in conjunction with the consent decree for accepting money and gifts under the radar. According to Digital Music News, the biggest bill went out to Entercom totaling $4 million. The FCC is also demanding radio employees receive routine training on payola rules and hire compliance officers at each station.
Depending on one’s perspective, it's easy to see what the fuss is all about. For up and coming artists, making it onto mainstream radio means a song hitting more ears, which also lends to more album sales. At the same time, a wad of cash stashed in the jewel case doesn’t necessarily mean the music is any good. Perhaps that's why the digital radio listener population is rising in percentage rapidly, combined with digital album purchases. Streaming music online allows a bigger variety and a more diverse listening experience. Kudos to Spitzer for seeing through the frosted jewel case and bringing in multiple cases to demand the FCC take a stronger stand.