The payola has got to stop — that's the word from New York State Attorney General Eliot Spitzer, who on Monday announced a settlement with Sony BMG Music Entertainment, which has agreed to cease its "pay for play" policy.
The label group, home to such acts as Jessica Simpson and Franz Ferdinand, was the subject of a yearlong investigation that revealed it was paying and providing expensive gifts — otherwise known as "payola" — to radio stations and their employees in return for airplay, in a violation of state and federal law. The payola took the form of outright bribes as well as fictitious contest giveaways for listeners, which actually went to station employees.
For instance, the program director for Buffalo, New York's WKSE-FM received several flights (to New York, Miami and Ft. Lauderdale, Florida, with guests) in exchange for adding Jennifer Lopez's "I'm Real" (in July 2001), Good Charlotte's "Hold On" (in November 2003) and Franz Ferdinand's "Take Me Out" (in August 2004) to his station's play list.
A label employee complained about the deal in an intercepted e-mail to a higher-up: "Two weeks ago, it cost us over $4,000 to get Franz on WKSE. That is what the four trips to Miami and hotel cost. ... At the end of the day, [the program director] added [Good Charlotte] and Gretchen Wilson ... for $750. So almost $5,000 in two weeks for overnight airplay."
In other instances, program directors were offered and/or received electronic goods such as flat-screen TVs, entertainment systems, laptop computers, PlayStation 2 consoles and games, and portable CD players, as well as flights, hotel stays and car service. Radio stations that participated in the payola schemes include WQHT-FM in New York (Hot 97); WWPR-FM in New York (Power 105); KHTS-FM in San Diego (Channel 933); WRHT-FM in Greenville, North Carolina; WFLY-FM in Albany, New York (Fly 92.3) and WWHT-FM in Syracuse, New York (Hot 107.9), among others. In response to one such offer, a program director e-mailed the label, saying, "I'm a whore this week, what can I say?"
"Our investigation shows that, contrary to listener expectations that songs are selected for airplay based on artistic merit and popularity, airtime is often determined by undisclosed payoffs to radio stations and their employees," Spitzer said. "This [BMG settlement] is a model for breaking the pervasive influence of bribes in the industry."
Much of the illegal solicitation came in the form of "spin programs" — airplay under the guise of advertising — for artists such as Jessica Simpson ("Take My Breath Away"), Good Charlotte ("I Just Wanna Live"), Avril Lavigne ("Don't Tell Me") and Maroon 5 ("Sunday Morning"). This meant listeners were sometimes unaware that the spin was purchased, and the songs achieved an inflated chart position because monitoring services couldn't differentiate between the purchased spins and regular spins.
Also, the label group orchestrated fake call-in campaigns, hiring people to request songs so that the station might add a track because it thought listener demand warranted it. In one e-mail exchange about the practice, a label employee instructed the call-in campaign leader to make the callers sound more excited: "My guys on the inside say that it's the same couple of girls calling in every week and they're not inspired enough to be put on the air. They've got to be excited. They need to be going out or getting drunk or getting in the hot tub or going clubbing ... you get the idea."
Sony BMG acknowledged that fraudulent practices and payola took place and called it "wrong and improper."
"Despite federal and state laws prohibiting unacknowledged payment by record labels to radio stations for airing of music, such direct and indirect forms of what has been described generically as 'payola' for spins has continued to be an unfortunately prevalent aspect of radio promotion," the label group said in a statement. "Sony BMG acknowledges that various employees pursed some radio promotion practices on behalf of the company that were wrong and improper and apologizes for such conduct. Sony BMG looks forward to defining a new, higher standard in radio promotion."
Toward that end, the label group agreed to companywide reforms to detect and prevent future abuses and is making a $10 million donation to local charities to fund programs aimed at music education and appreciation. Meanwhile, Spitzer's office said it is still investigating payola practices at other companies.