More on the NYC Payola Settlement

How Payola Went Corporate

And so goes the latest version of payola, the illegal trading of secret payments in exchange for airplay. Attempts to game the system are nearly as old as the industry itself. “Song pluggers” urged certain songs on big band leaders in the 1930’s and 40’s, accompanied by bundles of cash to make the musical choice easier. Disc jockeys in the 1950’s were handed cash bribes or fur coats for their wives. The independent promoters of the late 1970’s and 1980’s plied station directors with drugs and prostitutes.

The latest scandal to hit the music business shows that just as the industry has turned corporate in recent decades, so too has its underbelly. Documents ferreted out by investigators for Attorney General Eliot Spitzer of New York show that executives at Sony BMG Music Entertainment’s labels (including Epic) concocted their deals with some of the biggest commercial radio chains in the country. Last week, the company acknowledged its improper promotional practices and agreed to pay a $10 million fine.

The scandal also offers a reminder that, in important ways, little in the business has changed. The record labels still try to curry favor with station programmers, even though traditional radio is less powerful than it has been for decades, as satellite and Internet radio, as well as devices like iPods, give music lovers more control over what they listen to.

But commercial radio still dwarfs its competitors and retains its singular ability to mint hit records. And the record business is hit-driven.

Later: related F.C.C. to Scrutinize ‘Pay to Play’ in Radio

Turning to the Web For TV

And turning the Web into TV? More People Turn to the Web to Watch TV

It looks like that future may well be by way of the computer, as big media and Internet companies develop new Web-based video programming and advertising that is truly under the command of the viewer. As Americans grow more comfortable watching programs online, Internet programming is beginning to combine the interactivity and immediacy of the Web with the alluring engagement of television.

[…] For all of them, and many more media and Internet companies, investing in new Internet video programming is a way to cash in on the demands of advertisers who want to put their commercials on computer screens, where new viewers are watching. And on many Web sites, viewers can’t skip the video commercials, the way they can when using TiVo and other video recorders.

[…] An Internet commercial typically costs about $15 to $20 for each 1,000 viewers, nearly as much as broadcast networks charge. The price is high because there is more demand from advertisers than there is Internet video programming available. Broadband Enterprises estimates about $200 million will be spent on Internet video this year, up from $75 million last year. That pales in comparison to the $65 billion or so spent on broadcast and cable television advertising, but it is growing faster.

While much of the development of Internet video is now being driven by advertising, there is a growing crop of pay-per-view and subscription video services.

The Online Arms Race, Continued

New File-Sharing Techniques Are Likely to Test Court Decision

At a computer security conference in Las Vegas on Thursday, an Irish software designer [FreeNet’s Ian Clarke] described a new version of a peer-to-peer file-sharing system that he says will make it easier to share digital information anonymously and make detection by corporations and governments far more difficult.

Others have described similar efforts to build a so-called darknet that aims to shield the identities of those sharing information. The issue is complicated by the fact that the small group of technologists designing the new systems say their goal is to create tools to circumvent censorship and political repression – not to abet copyright violation.

Such a stand is certain to test the impact of the Supreme Court ruling in June against Grokster and StreamCast Networks, publishers of peer-to-peer file-sharing software, a number of legal specialists and industry executives said.

Clarke’s slides clarke's last slide

Software Patents-No!

A nice background summary tale of software patents: Why Bill Gates Wants 3,000 New Patents

I have not seen the software in use. But if I were in a position to make a ruling, and even if I accepted the originality claim on its face, I would process these swiftly: Rejected.

Microsoft’s other pending applications – 3,368 at last count – should receive the same treatment. And while tidying up, let’s also toss out the 3,955 patents that Microsoft has already been issued.

Perhaps that is going too far. Certainly, we should go through the lot and reinstate the occasional invention embodied in hardware. But patent protection for software? No. Not for Microsoft, nor for anyone else.


Missed this: Senators Grill P2P Providers

[Sen. Ted] Stevens closed the hearing by threatening to introduce bipartisan legislation if P2P companies don’t do something to stop piracy on their networks.

“If you don’t do it, I’m going to move over and meet with Sen. Boxer on this,” he said. “We’ve got to find some way to meet this concept of protecting our intellectual property. We can hardly accuse the people abroad of stealing our intellectual property if we can’t protect it at home.”

The hearing site: Issues Related to MGM v. Grokster; Washington Post’s Senator Threatens Crackdown on File-Sharing Industry [pdf]

A Little Common Sense

‘San Andreas’ Rocks the ‘Righteous’ [pdf]

So — the justification for this use of our tax dollars is that Take Two misled the public by promising a game featuring enough violence to make Sam Peckinpah blush, but instead sprinkled it with near-hardcore pornography. (I use “near” as there isn’t any display of genitalia, at least as far as I could see. And it’s a cartoon graphic, not real people…)

Good heavens, citizens! What’s going on here? Oh yes, of course, we’re getting all bent out of shape over nothing again. I keep forgetting that this is a proud American tradition, on the same display shelf as the controversy over “Darling Nikki” and the fuss over video games in general from the early ’80s. I bet some of the folks who thought our children’s brains were turning to mush over too much “Centipede” aren’t looking at it this way today.

I’m going to echo the refrain that you’d expect from thirtysomethings like me who don’t have children to protect: I don’t like the sex and violence of the GTA series. As a result, I do what anyone capable of making decisions does: I don’t play it.

Movies and Remix Culture

An art review: A Medium in the Making: Slicing Familiar Films Into Something New

Movie-loving artists divide roughly into two groups, fans and users. The fans flock to films, or the nearest video rental store, for both respite and inspiration; they discuss and sometimes write about what they see with distinctive intelligence. Their numbers are legion; their apotheosis is probably Manny Farber, the artist who had a distinguished career as a film critic before turning to painting full time.

The users are such impassioned, if not addicted, cinephiles that movies become the central component of their art. Films are not just inspiration for these artists; they are raw material that can be appropriated, manipulated and reshaped into another work of art, with their names on the credit line.

[…] Still, “CUT” brings needed curatorial clarity to an expanding genre that is challenging to survey. The catalog provides an expansive backdrop by flanking Mr. Basilico’s lucid discussion of the works with essays by Rob Yeo, on the history of film appropriation in underground film (starting with Joseph Cornell), and by Lawrence Lessig, on the creative chill that recent changes in copyright law are bringing to the arts.

You come away from this show with a new sense of film as a found object; as an immense reservoir of untapped form and feeling; and as a highly charged raw material by which artists can celebrate, examine and stave off the deluge of images bearing down on us from all sides.

Two NYTimes OpEds on Payola and the Music Biz

  • The current situation with a look at record contracts: The Price of Fame [pdf]

    Payola gets a song on the radio. If it becomes a hit, radio works it to death. In this day of consolidated radio ownership and programming, my friend suggests, eliminating payola could mean that commercial stations would become even more monotonous, if that can be imagined.

    To my mind, however, the difficulty of picturing a world beyond payola is reason enough to cheer Eliot Spitzer along. Payola restricts access to the public airways; only artists whose labels are willing and able to pay get played. Listeners who might enjoy something else won’t hear it from stations on the take. And when fans go to the record store, they’ll find that payola has driven up the price of CD’s.

    By the end of our three-album run with MCA, Semisonic had sold close to two million records, but we were a long way from recouping the costs of radio promotion. Thus musicians, even some who have benefited from payola, will applaud Mr. Spitzer, even as they wonder what chance he has of bringing about vast structural reform. Knowing what it takes to get their songs on the radio and watching their share of record sales swallowed up along the way, most recording artists would love to see the current system brought down, even if they can’t imagine what would replace it.

  • A little history: Broken Record [pdf]

    Music professionals have always agreed that hits cannot be bought. To this day, when a label backs the wrong song, it loses money. Moreover, systems of “bribery” analogous to payola operate in many retail markets. Most supermarket chains, for example, make a chunk of their revenue from “slotting fees,” which are the rents that food distributors pay them for shelf space. That such rents are paid says nothing about the flavor or nutritional value of any given item on the shelves. Where music is concerned, however, the concept of payola somehow seems intuitively revolting.

    Yet, like it not, every popular song you’ve ever loved has reached you via some chain of pay-for-play machinations. The technological landscape has changed over time, as have the laws supposedly governing music promotion, but payola has been as constant and pervasive a force as gravity for more than a century now. A rational set of regulations would probably acknowledge this reality and aim at leveling the playing field so that small players can compete against big ones, just as they used to do in the early heyday of rock ‘n’ roll, when tiny labels like Sun briefly had the likes of RCA on the ropes.

    Mr. Spitzer is doing his duty by enforcing the existing laws. But he might want to at least acknowledge that earlier attempts to kill payola, when they had any effect at all, have tended to leave the beast stronger.

Again, Why Is Downloading Bad?

A little fuel for the fire: Downloading ‘myths’ challenged

People who illegally share music files online are also big spenders on legal music downloads, research suggests.

Digital music research firm The Leading Question found that they spent four and a half times more on paid-for music downloads than average fans.

Rather than taking legal action against downloaders, the music industry needs

Some other links: – from The Leading QuestionMusic pirates spend four and a half times more on legitimate music downloads than average fans; Digital music will not kill the radio star; The Guardian’s report, Online filesharers ‘buy more music’

New Telecom Bill Proposal

U.S. senator unveils bill that aids phone carriers [pdf]

[Sen. John] Ensign, a Nevada Republican and chairman of the Senate Commerce subcommittee on technology, innovation and competitiveness, called his 72-page bill a starting point as Congress considers overhauling the 1996 Telecommunications Act that aimed to promote competition in voice services.

“Changes in technology necessitate that we update these rules if America is going to be competitive in the face of global competition,” he told reporters, pointing to rankings that the United States has slipped to as low as 16th in the world for deploying high-speed Internet service, known as broadband.

Under the bill, companies that want to offer video service would no longer have to get permission from local or state officials, a boon to companies like Verizon Communications and SBC Communications Inc., which are rolling out video.

It would also eliminate requirements in 2011 that the four big local telephone companies, known as the Baby Bells and includes Verizon and SBC, resell their phone service to other competitors at regulated rates or have to make parts of their existing copper networks available to competitors.

Senator Ensign’s press release on The Broadband Consumer Choice Act of 2005.