Monday, July 25, 2005

Eliot Spitzer's Payola Settlement

Here's a payola update from Yahoo!:

New York Attorney General Eliot Spitzer is expected to announce today an international "payola" settlement with a major record company to limit the industry's ability to influence what recordings are played on the radio. The settlement was expected to be announced before noon EDT, according to a scheduling announcement. Media reports worldwide began reporting since Saturday that SONY BMG Music is expected to settle with Spitzer, while three other companies remain under investigation.

In October, Spitzer had questioned the London-based EMI Group PLC record label and other companies in the music and broadcast industries about the promotion of their recordings on radio stations. EMI had confirmed the inquiry. The Los Angeles Times on Saturday quoted unidentified sources saying SONY BMG could pay as much as $10 million to settle the case.

...The industry uses independent promoters or "indies." They are paid by record companies to persuade radio stations to play the companies' recordings. The record companies can't offer financial incentives under a 1960 federal law that made it a crime punishable by a $10,000 fine and up to a year in prison to offer money or other inducements to give records airplay. The practice was called "payola," a contraction of "pay" and "Victrola" record players.
Go get 'em Eliot.

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