heystoopid used our news submit to tell us his thoughts on this legal issue: "This is a short form story, of how Eliot Spitzer has for the past 11 months been investigating all record labels use of middlemen for record payola and influence to force radio DJ's to play a particular record. Interestingly, ultimately the total costs of this payola/graft is usually deducted from the royalties payment to recording artists under publicity/promo CD listing. Other more extensive articles in regard to this investigation also appear in the New York Times on line (free on line registration required though). The NY Times hints that Eliot's terms of settlement, have yet to be ratified, but will be used as a big stick, to force the remaining 3 labels to the negotiation table. A possible fine has been hinted at circa US$10 million dollars! The headline of the latest NYT article dated 23rd July 2005 is "Sony BMG Called Close to Settlement With Spitzer."
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The newspaper, citing people familiar with the matter, said the settlement, which follows an 11-month investigation, would slap Sony BMG Music, the world"s largest record company by market share, with a fine of at least $10 million. In addition, the settlement will also call for changes in how the company does its radio promotion. The terms of the settlement were still being worked out, the Journal said on its online edition on Friday. |
I suppose I always knew there was some arm twisting going on out there with the radio stations and I suppose that it is part of doing business. But you would think that the artist would not have to foot the bill for the kickbacks. I always shudder to think of all the talent out there that never gets heard due to the lack of airplay. We have to wonder if this technique is hindering the evolution of music, slowing it down to milk the last drop from every new sound. Interesting story.
Source: Reuters
