The Hypocrisy of The Payola Settlement

Four of the six largest radio consolidators have settled with the FCC over alleged payola practices according to the Associated Press. That means Entercom pays $4 million. Clear Channel $3.5 million. CBS $3 million and Citadel $2 million. Previously New York Attorney General Eliot Spitzer collected $30 million from the big four record labels and another $6.25 million from CBS and Entercom. Spitzer has been critical of the FCC for doing nothing.

But early reaction to the deal seems to be positive. I wish I could share their enthusiasm. I'm seeing the FCC settlement as the ultimate hypocrisy. Let me explain.

According to the AP: "Under the FCC consent decree, broadcasters would agree to closer scrutiny in their dealings with record companies, including limits on gifts, a promise to keep a database of all items of value supplied by those companies, the employment of independent compliance officers to make sure stations are following the rules and a new ''payola hot line'' for employees to report infractions".
Hypocrisy #1:

The radio groups admit no wrongdoing . The punishment lasts for only three years and the payola investigation goes away. It's like a DUI that injures someone and getting away with it.
It gets worse.

There is a separate agreement termed "rules of engagement" designed to level the playing field for indie record labels to get airplay on terrestrial stations. FCC Commissioner Jonathan Adelstein thinks that this settlement will help radio sound fresh adding that "payola gets in the way of authenticity because money drives the music, not its quality."
Hypocrisy #2:

The FCC created this mess. It has long been disinterested in payola. The most recent "outrage" from your Commission was back in 2000 when it hit up Clear Channel for "pay for play" scandals and broke the bank with a whopping $8,000 fine. Guess payola wasn't getting in the way of authenticity back then. In fact, there was more influence exerted on radio playlists that year due to the hubris of consolidators which brings me to the next hypocrisy.
Hypocrisy #3:

It was the consolidators themselves who created the climate for modern-day payola when they trumped up a system whereby labels and independent promotion companies could get access to the music their stations "added" a few hours before the music trade publications were notified -- a dubious reason to spend millions of dollars. But in a wink and a nod arrangement the labels through their indies got access to these radio group program directors -- not influence over them, of course (wink, wink). The arrogant consolidators were looking for a way to get a payday from the very labels they had been in bed with all these years (nod).

Hypocrisy #4:

FCC Commissioner Michael Copps said payola "cheats radio listeners and will not be tolerated". Oh, yeah? Where have you been? Think the independent promotion outfits are not going to find a way around this one -- they always do. If you want cheats in radio look no further than the consolidators you created and protect while the radio industry continues to decline. With friends like the FCC commissioners, radio listeners don't need enemies. Who is your daddy, anyway?
But I saved the best for last.

These four major "angels" will give up a collective 8,400 half-hour segments of free airtime for indie record labels and local artists according to the AP report. I'll bet these half-hours will be in morning drive at about 7:20 am, right? I was talking to an old PD friend of mine and we were kidding about how early Sunday morning these half hours of freshness will run. Hell, 8,400 half hours is only a pimple on the program director's butt -- an insignificant amount of time.
Hypocrisy #5 :

If everyone was so concerned with fresh music, new artists and the health of indie labels, they'd be fighting the new Internet royalty rates that threaten to impede the growth of Internet radio by charging small operators more money than they can afford to play the music. (Go to Kurt Hanson's RAIN, it's my bible on all things related to this travesty and it's a shame). Who is kidding whom? 8,400 half-hours when no listeners are listening to terrestrial radio or building Internet radio as the lifeline for music diversity.
Does anyone question the pervasiveness of the Internet?

Is it that hard to believe the Internet will be on everyone's mobile devices once WiFi becomes universal?

If you're with me so far, can you see the hypocrisy of letting four serial offenders of music diversity off the hook for chump change and a kiss on the backside while the big crybabies in the music industry try to get blood out of the one stone that will outlive them -- Internet radio.