Pandora claims it will bury radio. Truth is, Pandora will be buried.

[SirRoxalot]

We should really look at this as what it was: An opportunity for the AG to make some hay, grab some headlines, and get some revenue from profit-making companies.

You forgot to add "profit-making companies who were breaking the law." Just because you don't like the law doesn't nullify it. BTW, if I were the NAB, I'd be quoting the NYAG, who says:

"Radio airplay is the single most effective driver of music sales. The more airplay a song receives, the higher it climbs on published charts that purport to reflect the song’s popularity, and the more likely consumers are to buy it."

 

[TheBigA]

You forgot to add "profit-making companies who were breaking the law." Just because you don't like the law doesn't nullify it.

As I said, the state never proved the stations were breaking the law, and there is evidence they weren't. But it was easier to pay the fine and move on.

The only proof they had was for the poor PD in Buffalo, who was made a scapegoat, in my opinion.

 

[SirRoxalot]

I'm pretty sure that neither the radio companies, nor the recording companies would have forked over millions if they thought that they could win. But you are, of course, entitled to your opinion.

As far as the "poor PD in Buffalo" is concerned, you won't find much sympathy for him in this town. I suspect that the most common response to his name would be "dumbass".

 

[Goat Rodeo Cowboy]

I'm pretty sure that neither the radio companies, nor the recording companies would have forked over millions if they thought that they could win.

Actually companies do that quite often. Paying the settlement is cheaper than paying the lawyers who can achieve the win. And paying the settlement is a sure thing. Going to trial is NEVER a sure thing.

 

[TheBigA]

I'm pretty sure that neither the radio companies, nor the recording companies would have forked over millions if they thought that they could win.

Keep in mind that these are all companies that are based in NY state and get a lot of favors from the state government. It really was a small price to pay. These same companies would gladly pay a 1% royalty to Sound Exchange to get rid of the possibility of a government imposed performance right. It's called "the cost of doing business." And it's tax deductable.

 

[davideduardo]

You forgot to add "profit-making companies who were breaking the law." Just because you don't like the law doesn't nullify it. BTW, if I were the NAB, I'd be quoting the NYAG, who says:

Nolo contendre is not an acceptance of guilt nor is entering a plea of nolo contendre proof of guilt.

Saying that companies "... were breaking the law" is both incorrect and unproven in this case. As other posters have said, I don't think the case, had it proceeded, would have resulted in any wrongdoing being proven. But, as such cases can linger for years, they impede station sales and other such activities by licensees so getting rid of the whole mess is much better than "taking a stand."

"Radio airplay is the single most effective driver of music sales. The more airplay a song receives, the higher it climbs on published charts that purport to reflect the song’s popularity, and the more likely consumers are to buy it."

This statement shows how whacked the AG was. Published charts are "published" in trade publications like Billboard. The average record buyer does not have the several hundred dollars a year that such a magazine costs.

What charts do is serve as a guide for "record buyers" at the store level. Retail outlets with record departments have limited music footage (think Target or WalMart) so they will only stock the top material in genres that move in each location. Music buyers can't know all the different genres that sell, down to things like Regional Mexican or Country if their personal taste is perhaps more pop in nature. Charts help select things to stock, but actual sales takes over soon thereafter.

If you are in radio, I am surprised that you lend any credence to some rabble rousing by an AG who had... past tense... higher political aspirations and lower common sense than "the average bear."

 

[davideduardo]

I'm pretty sure that neither the radio companies, nor the recording companies would have forked over millions if they thought that they could win. But you are, of course, entitled to your opinion.

A few million is dirt cheap compared to going to trial in a case like this. But, more costly is the way such a case can affect the image of a company and its ability to do business in the meantime.

There was an article in a California newspaper recently that showed that the average sexual harassment suit against a larger company and which goes to trial costs around $300,000 even without a settlement or verdict. Just imagine what a major publicity driven case would cost.

 

[SirRoxalot]

Man, you guys can't even admit that people got caught with their hands in the cookie jar. As someone who saw some of the wrongdoing first hand, I'm pretty sure of how much credence to lend to the "rabble rousing AG". But thank you for expressing the corporate view of wrongdoing.

Since this has drifted WAY off the Pandora topic, I think it might be time to get back to that discussion. Otherwise, it will simply be more ad hominem attacks, generating heat rather than light.

 

[TheBigA]

Man, you guys can't even admit that people got caught with their hands in the cookie jar.

In the case of Spitzer, it wasn't his hand.

Since this has drifted WAY off the Pandora topic, I think it might be time to get back to that discussion.

As I said earlier, payola is legal in internet radio. Lots of indie promoters there with cash to spend. Ask Tim Westergren who pays for his travel these days. It's not Pandora.

 

[secondchoice]

Man, you guys can't even admit that people got caught with their hands in the cookie jar.

Even if you (DID NOT), if there is a slightest chance of any of this "sticking" the FCC could give you a hard time at renewal. I can remember the RKO / General Tire mess. Different wrong doings but still same result could be possible.

 

[davideduardo]

Man, you guys can't even admit that people got caught with their hands in the cookie jar. As someone who saw some of the wrongdoing first hand, I'm pretty sure of how much credence to lend to the "rabble rousing AG". But thank you for expressing the corporate view of wrongdoing.

Spitzer obviously decided that he could get publicity that enhanced his political aspirations by making accusations based on his own interpretation of FCC rules and such.

There was no prohibition of paying a song in exchange for payment if the sponsor ID rule was complied with and the deal was done by station management and not under the table by an employee for personal gain.

In fact, there is no difference between receeiving payment for playing a song and running an infomercial for Stepmaster or the latest colon cleanser.

 

[Carmine5]

F The problem is lack of spectrum to give free over the air access to the public Internet and why the FCC wants to take away spectrum from TV broadcasters and auction it off to the highest telco bidder. The end-game being..To put more money into the government coffers, not allow you to listen to free streaming in the car.

The lack of spectrum argument is baloney. Cable and wireless providers are already sitting on 320 MHz of unused spectrum. But you are right on one thing: this is about the government trying fill its coffers with a few billion. It's also about the telcos and cable companies, the proud owners of nearly all of this unused spectrum, along with their lobby groups trying to cripple if not stop Mobile DTV as well as hobble broadcast TV altogether. Free mobile TV and free HDTV does not fit into their dreams of high bandwidth usage with capped data plans to internet, smartphone and pad users.

 

[flashback]

what is the diffrence between a station being paid and a disc jockey being paid to play a song?if the effect is the same (the song being heard because of payment ) isn`t either, if you are honest about it, a bribe either way?

saying one is a bribe and one is not is like saying a ticket scalper on the street is wrong but if someone pays for an office and a licence they are ticket brokers who buy tickets in bulk and sell at a higher cost and they are ok.both are scalpers and morally both are wrong.

my point is when you get away from the legal sematics one is as bad as another.if it`s the disc jockey or the station getting paid to play a song . even if it crosses its t`s and dots its i`s.right is right and wrong is wrong.

 

[Goat Rodeo Cowboy]

what is the diffrence between a station being paid and a disc jockey being paid to play a song?if the effect is the same (the song being heard because of payment ) isn`t either, if you are honest about it, a bribe either way?

Here is my memory of the history of the legal status. Back in the early days of radio, station owners faced a problem when radio personalities would accept a pair of shoes or a suit or other favors when they worked mention of a merchant into the chit-and-chatter of their show. The station owners asked a law, a regulation that make it illegal for commercial content to be heard without it being acknowledged as PAID CONTENT.

So the rules on the book specifically make it a crime for a radio person to take money or other value but fail to make some kind of recognizable on-air acknowledgment of the transaction. If the announcer violates this rule and the station owner can show proper training and scrutiny of the logs matching what went on the air, then the employee is a criminal.... cheating primarily the station owner, and cheating the listening audience as a secondary crime.

Taking money to play a record, or talk about a record and artist is NOT the crime. Failing to make it clear to the listening audience that value changed hands is the crime. If the station did not know value was chaning hands, no crime. If the station takes value and gives boost to a recording, and makes it clear to the audience that consideration is involved, THERE IS NO CRIME.

Every new generation of broadcasters has to be exposed to this archaic legal reality.

 

[davideduardo]

what is the diffrence between a station being paid and a disc jockey being paid to play a song?if the effect is the same (the song being heard because of payment ) isn`t either, if you are honest about it, a bribe either way?

saying one is a bribe and one is not is like saying a ticket scalper on the street is wrong but if someone pays for an office and a licence they are ticket brokers who buy tickets in bulk and sell at a higher cost and they are ok.both are scalpers and morally both are wrong.

As GRC explained, it's about disclosure. One of the tenets of broadcast regulation has been to insure that the listener knows when a mention is a commercial, for which some form of compensation is made, and everything else. That is why "teaser" campaigns must indicate who sponsors them: "A big change is coming to your breakfast table this Monday" is not allowed as a stand-alone, but "A big change .... this Monday. Post Cereal." is OK.

Much of this has to do with political and issue ads, which must not just identify who pays but where the station must keep the contracts on file.

On the other hand, an employee who promotes his hidden interest in a club, his brother's restaurant or a song is stealing from his employer, and that is illegal. Payola does not just cover music but any promotion for compensation made without the consent of station ownership and which is broadcast on the air... using "stolen" time.

If the station owner wishes to give away time, that is their right... witness the bonus spot... as long as the advertising meets all the other rules and regulations as to sponsor ID, etc.

 

[SirRoxalot]

Spitzer obviously decided that he could get publicity that enhanced his political aspirations by making accusations based on his own interpretation of FCC rules and such.

There was no prohibition of paying a song in exchange for payment if the sponsor ID rule was complied with and the deal was done by station management and not under the table by an employee for personal gain.

In fact, there is no difference between receeiving payment for playing a song and running an infomercial for Stepmaster or the latest colon cleanser.

Songs being played without sponsor IDs, and songs being both added and reported by employees for personal gain are exactly what Spitzer uncovered at mutliple stations. It was both systemic by the corporations, and out in the open by several employees according to evidence cited by the AG.

Internet broadcasting is not under the same strictures as licensed broadcast facilities. Whether payola should be a crime is debatable. Whether it is under current law is not. What Spitzer uncovered undoubtedly fell under "payola" according to existing broadcast law.

 

[davideduardo]

Songs being played without sponsor IDs, and songs being both added and reported by employees for personal gain are exactly what Spitzer uncovered at mutliple stations. It was both systemic by the corporations, and out in the open by several employees according to evidence cited by the AG.

He found one incident, but no payola charges were lodged against the individual... the company "handled" the matter.

In any large group of people, there will be a percentage who do prohibited things, whether it is cussing on the air, collecting money from clients and not turning it in, faking logs or documents, falsifying time sheets and so on. To think otherwise is not realistic.

Whether payola should be a crime is debatable. Whether it is under current law is not. What Spitzer uncovered undoubtedly fell under "payola" according to existing broadcast law.

The relationships with independent promoters does not fall under payola and plugola regulations, since those rules deal with the promotion of something by an employee without the knowledge and consent of the licensee. The independent promotion agreements were formal contracts with management, and did not fall under the letter of payola rulings.

And, while payola can result in FCC action, the enforcement generally comes under commercial bribery statutes. (US Code Title 47, C 5, S III, Part 1, #47) The FCC could find a station that did not properly supervise its operation to be lacking in the qualifications of a licensee, although this has never been done with any consequences.