Let's Get Real About Payola

Yesterday, Entercom finally gave in and agreed to pay New York Attorney General Eliot Spitzer $4.25 million to make his payola investigation go away. Several other big radio consolidators including Clear Channel and a few major record labels have already settled.

Anyone who has been or is presently in radio knows that there was and is various kinds of payola. The record industry denies it. Independent promoters have a habit of disappearing -- I heard of one going to Sicily and returning when the heat was off. Radio stations can't bring themselves to admit their complicity. They're in denial. Hey, President Clinton told us he did not have sex with "that woman, Miss Lewinsky" and President Bush said steadfastly -- there are weapons of mass destruction in Iraq. There weren't. We're used to lies. But anyone lying about payola today only hurts themselves and their industry.

There were many types of payola. First, the "so nice, I'll play it twice" payola where the djs got paid directly for extra spins. But that was back when djs could pick their own music. In my era, the program director chose the playlist and they received drugs, sex, money and trips to Vegas under assumed names if they gave into the temptation. That's for starters. When consolidation came along, I call the third phase "legalized payola" where newly-consolidated companies insisted on being paid by record labels ostensibly in exchange for giving them a couple of hours advanced notice as to what songs they were adding. Had the labels waited, the trades would tell them for free. But it wasn't really about early notice. It was about access to their programs directors. Of course, access didn't mean influence, remember? Wink. Wink.

I guess you could say from the labels' point of view payola served them well. So inexpensive compared with having to buy a lot more regular advertising on stations promote their music. So clever because once a radio employee took payola, they swallowed their tongue for their own protection. How untraceable. This exemplifies the mentality that labels had namely that they discovered the artists, signed them to contracts, arranged their music and controlled their futures. Somebody forgot to tell the labels that it isn't that way anymore. They don't have the influence they once had. And their secret, silent but not shameful radio co-conspirators don't have their old influence either.

All this talk about Eliot Spitzer is so retro. What is payola anyway when the two conspirators don't have the influence to be guilty any more.

The killer apt for payola is peer-to-peer file sharing. While the consolidators were trying to find new ways to legally bilk the labels, the next generation was at work taking apart the infrastructure both of them have fought to preserve for decades. If we're going to get real about payola once and for all, let's admit it. It happened and I'm sure it still happens.

More important is that payola doesn't matter any more. The next generation can trade music legally and illegally and they do. They sample music from friends or social networking sites. Their iPods are basically their own personal, portable oldies station. But their computer, their MySpace and Facebook and tomorrow their mobile phones have neutered the old payola partners and solved the age of problem once and for all.

While the labels and radio stations were thinking of ways to make consolidation increase their influence over the record buying public, the kids of the next generation gave them a lesson in power to the people. So, Eliot Spitzer is the governor-elect of New York state. The consolidators who were caught red handed practicing payola only had to throw a couple of million dollars apiece at the attorney general's office to make it all go away.

The laugh is on them for the lawsuits may have gone away and Spitzer got his money, but the next generation made the underlying and illegal influence of payola disappear first.