The office of Eliot Spitzer, the New York State attorney general, has been investigating the music industry’s record promotion practices, including the labels’ use of independent promoters who are paid to push songs to radio programmers. But the Entercom case raises questions about another aspect of the promotion business: the labels’ direct efforts to woo the programmers.
Federal law prohibits broadcasters from accepting money or anything of value in exchange for playing a specific song, unless the payment is disclosed to listeners. Taking undisclosed payments – known as payola – has been outlawed since the earliest days of the rock era, when a scandal involving cash bribes paid to certain disc jockeys rocked the music business.
[…] [S]ince Mr. Spitzer’s inquiry began, executives in the radio and record industries have tried to distance themselves from the promoters, sometimes known as indies. Just last week, the Nashville-based RCA label, the country music arm of the music giant Sony BMG, said it would no longer pay the promoters.
Late last year, Infinity and Entercom each said they would sever their ties to the independent promoters. Jack Donlevie, Entercom’s executive vice president, told Billboard magazine at the time that the company’s deals with independents were based on “a business model that doesn’t work anymore.”
[…] To some, the move underscores the dilemma facing the industry as the labels try to terminate their relationships with the middlemen.
“It depends on what replaces it,” said Peter Hart, an analyst with Fairness & Accuracy in Reporting, a media watchdog organization, who has studied the issue. “If it’s stations dealing one-on-one with labels, and continuing to abuse the relationship, the fact that there’s no independent promoters doesn’t do us any good.”
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