Payola & Coercing Bands to do Events in Exchange for Airplay

[davideduardo]

Attorney David Oxenford's blog today is headlined:

FCC Enforcement Advisory Warns of Payola Concerns in Coercing Bands to Play at Broadcast Station Events with Threats of Decreased Airplay – and Reminds All Broadcasters, Radio and TV, of Sponsorship Identification Requirements​

He goes on to say...
When in January I offered my predictions as to the issues that the new FCC would be considering this year, payola and musical artists complaining of being coerced to play for free at radio station concerts or other events was not on the bingo card. That changed early this past week when Tennessee Senator Marsha Blackburn sent a letter to FCC Chair Brendan Carr stating that she had received many complaints from musical artists complaining that they were being coerced to play for free at radio station events with threats that, if they did not participate, on-air play of their music would be reduced.


The Senator’s letter suggested that this was a violation of the FCC’s payola rules that prohibit broadcasters from making programming decisions based on the receipt of anything of value for airplay without disclosing that consideration on the air. The letter’s implication is that receipt of the artist’s concert appearance for free would constitute the consideration and, if that consideration was not disclosed when increased airplay occurred, the station would be in violation of the payola policies. The letter suggested that the FCC take action to ensure that such coercive tactics were not used to secure free appearances by musicians at radio station events. In what seems like record time, the FCC’s Enforcement Bureau responded to the Senator’s letter by issuing an Enforcement Advisory about the issue. What does that Advisory provide and what are the FCC’s policies payola and sponsorship identification?


The Enforcement Bureau did not ban broadcasters from asking bands to play at station events for free or reduced compensation, but it did warn that any “deals” for bands to play at station events in exchange for more airplay, or any threats (express or implied) to reduce airplay if a band did not appear at an event, would be seen as a violation of the rules. The Bureau referred to such threats as “covert manipulation of radio airplay.” The Advisory states “[w]hen payola causes stations to broadcast programming based on their financial interests at the expense of community responsiveness, the practice is inconsistent with localism.”

The whole article is at FCC Enforcement Advisory Warns of Payola Concerns in Coercing Bands to Play at Broadcast Station Events with Threats of Decreased Airplay – and Reminds All Broadcasters, Radio and TV, of Sponsorship Identification Requirements

Oxenford's site is free and open.

 

[TheBigA]

In practicality, the way it works is the record label promo people call the station, volunteering their artists. Stations don't make "threats." The radio charts are extremely competitive. There's a line of artists waiting to do these things. It's hard for artists to break through. Good music isn't enough when you have an over-supply of artists and new releases. A radio station is happy to play older, more familiar catalog music rather than take the risk of playing a new artist.

Meanwhile the labels have this problem of artist development. How to market an artist when the streaming services just play songs, often without any artist identification. So it perpetuates the old & familiar with no way to build new artists. Broadcast radio has a way of helping, but these kinds of legal things discourage them from participating. It takes two to tango. In the past, the labels were held responsible as much as the radio stations, but that doesn't seem to be the approach now.

The fact is the law only prohibits increased airplay without credit. If the station includes a label credit with the extra spin, that fulfills the legal requirement. Meanwhile, artists are also being told by labels to post on social media. I had one artist complain about being "forced to do a TikTok." But that doesn't get reported because social media isn't regulated and payola laws only apply to broadcast radio.

The big radio companies have centralized artist relations. iHeart, Cumulus, and Audacy have people who specifically handle all that, so it's taken out of the hands of the local PDs. Is that better in terms of serving the local community? Artists get paid for appearing at the iHeart Music Festival. I can imagine the corporate radio lawyers have already responded to this policy with more centralization. So the artists will still do the concerts and the station isn't involved.

In Blackburn's case, she's threatening stations with payola laws, while at the same time demanding these stations pay a new royalty for labels & artists. How does she expect stations to pay that new royalty when radio has to follow laws that don't exist for streaming? The answer is it's not her problem. It's just one more reason why radio is shifting its audience to streaming where they don't have to deal with federal regulations.

 

[TheBigA]

Tennessee Senator Marsha Blackburn sent a letter to FCC Chair Brendan Carr stating that she had received many complaints from musical artists complaining that they were being coerced to play for free at radio station events with threats that, if they did not participate, on-air play of their music would be reduced.

Just to clarify, stations don't make these deals with artists or even with managers. If this is happening, the label is the intermediary. So the artist gets the message from their label rep. Who knows what the label person is telling the artist? All the artist knows is they're on a plane every day going to dozens of free gigs. The artist doesn't haggle with PDs for more spins. The label does. If Blackburn is only speaking to artists, she isn't getting the real story.

 

[Kent]

In Blackburn's case, she's threatening stations with payola laws, while at the same time demanding these stations pay a new royalty for labels & artists. How does she expect stations to pay that new royalty when radio has to follow laws that don't exist for streaming? The answer is it's not her problem. It's just one more reason why radio is shifting its audience to streaming where they don't have to deal with federal regulations.

I've always found this part of the pro-royalty argument to be disingenuous. On the one hand, they're saying, "Radio exposure has no value; it's pure exploitation." Then, they turn around and say, "Radio won't play us if we don't pay them." If both of those statements were true, they could just stop paying radio stations to play them, and they wouldn't be exploited anymore.

I suspect Blackburn is aware of that, but record labels support her, and she'll do their bidding.

 

[TheBigA]

A letter was sent to members of congress asking them to force AM/FM radio to pay them for music:

Recording artists want Congress to force radio stations to pay them for their songs

The American Music Fairness Act would ensure performers, not just songwriters, get paid when AM/FM radio stations play their music.

www.nbcnews.com

They call it "fairness," but they refuse to negotiate with radio over this royalty. They want it imposed with no negotiation.

The fact is that AM/FM radio stations pay artists, labels and musicians for all music on radio streaming sites. So to say they're not getting paid is a lie.

There's also a movement in congress against the new royalty:

US Legislators Push Back Against New Fees on Local Radio - Radio Ink

A bipartisan group of US House members has reintroduced the Local Radio Freedom Act, a resolution opposing new performance fees for AM/FM.

radioink.com

 

[TheBigA]

In connection with the investigation mentioned in the OP, Chairman Carr sent a letter to iHeart CEO Bob Pittman about their annual iHeart Country Festival:

FCC Chairman Inquires To Bob Pittman Regarding iHeartCountry Festival Sponsorship Identification Requirements

FCC Chairman Brendan Carr has sent a letter to iHeartMedia Chairman/CEO Bob Pittman inquiring how the company plans to ensure

radioinsight.com

It sounds to me like all of this is coming from Marsha Blackburn. They're not asking about iHeart's other festivals or events. Just the country one.

 

[Theater of My Mind]

As always, Carr's intentions are highly suspect. But frankly, these are fair questions in spite of the devious motives likely behind them.

 

[davideduardo]

In connection with the investigation mentioned in the OP, Chairman Carr sent a letter to iHeart CEO Bob Pittman about their annual iHeart Country Festival:

FCC Chairman Inquires To Bob Pittman Regarding iHeartCountry Festival Sponsorship Identification Requirements

FCC Chairman Brendan Carr has sent a letter to iHeartMedia Chairman/CEO Bob Pittman inquiring how the company plans to ensure

radioinsight.com

It sounds to me like all of this is coming from Marsha Blackburn. They're not asking about iHeart's other festivals or events. Just the country one.

This is an absurd investigation.

The investigation is the same thing that Republicans criticized in Trump's property evaluation case: a standard business practice that both sides enter into knowingly and enthusiastically as both stand to gain.

Record labels have, historically, liked to have their artists exposed in every way possible. This is why record companies have promotion departments. It goes back at least 70 year, with radio hosting artists for everything from small park events to large concerts.

Heck, I can remember a good case from around 1980 when a new band in Miami wanted to play at our WHTT street events and fair appearances. They liked the chance to play in public and not just in clubs for people who were drinking too much to appreciate them. They'd bring their own sound gear and set it up and often did several sets. We did not play them on the air, of course, until later when they released a good song under their band's name, Miami Sound Machine.

Radio worked for Emilio and Gloria back then, as we gave them exposure and they got noticed and signed with a label. We got entertainment at our events. We were all happy with each other and loved working together.

When Payola was originally defined in the late 1950's, the definition was the exchange of something of value (money, travel, drugs, etc.) for airplay on a radio station without the knowledge of station owners and managers. In other words, payola occured when a staff member such as a PD or DJ played a song and took compensation from the artist or label without the knowledge of the station top management and, thus, the paid promotion was not logged.

Now, Carr is making the simple trade of exposure for the artist and a promotion for the station and making payola a station offence. Stupid, and it puts another nail in radio's nearly finished coffin.

To me, collaborations between stations and artists and their labels is no different than my helping the high school student next door with his term paper in exchange for him mowing my lawn a couple of times. It is a quid pro quo, and harms nobody.

It illustrates Carr's and, particularly, Blackburn's total ignorance of how this sector of the entertainment business works. I hate to think of what is coming next from these two idiots.

 

[TheBigA]

It illustrates Carr's and, particularly, Blackburn's total ignorance of how this sector of the entertainment business works. I hate to think of what is coming next from these two idiots.

This is why I say the NAB is nuts if they think they're going to get any more deregulation from this FCC.

 

[davideduardo]

This is why I say the NAB is nuts if they think they're going to get any more deregulation from this FCC.

For some reason, the new people at the FCC and certain legislators think that station operators program their stations to their own personal taste. They don't know the amount of research, right down to song by song selection of music, that goes into finding what listeners want.

Even Soros, whom I despise, is not going to modify formats to fit his political views because he knows that any product, whether radio or a shampoo, has to fill a customer's needs, not his.

I think the idiot in the room is Blackburn, however.

 

[radiofan2023]

For some reason, the new people at the FCC and certain legislators think that station operators program their stations to their own personal taste. They don't know the amount of research, right down to song by song selection of music, that goes into finding what listeners want.

Even Soros, whom I despise, is not going to modify formats to fit his political views because he knows that any product, whether radio or a shampoo, has to fill a customer's needs, not his.

I think the idiot in the room is Blackburn, however.

Is the NAB willing to try to get everyone in Congress, whether they listen to radio or not, to understand exactly how radio and broadcasting works?

 

[TheBigA]

Is the NAB willing to try to get everyone in Congress, whether they listen to radio or not, to understand exactly how radio and broadcasting works?

I don't think the NAB knows either. But I'll be interested to see Pittman's response to Carr. What I would like him to do is invite Carr to the iHeart Country Festival so he can see for himself what they do, and talk to the artists directly about why they do the show. He apparently likes to travel and see things. Pittman can be a good host, and he knows radio.

 

[TheBigA]

For some reason, the new people at the FCC and certain legislators think that station operators program their stations to their own personal taste. They don't know the amount of research, right down to song by song selection of music, that goes into finding what listeners want..

They also don't seem to understand that iHeart is also one of the world's top streaming companies. Payola laws don't apply to streaming companies. Only broadcasting. The FCC doesn't regulate streaming. Plus streaming companies pay artist and label royalties to SoundExchange. Blackburn doesn't seem to know that.

So Pittman has a real beef with all of these people, who attack his company for not paying artists, and then they turn around and play police when they do.

BTW if you look at the lineup, the artists are not doing this show for spins or money. A lot of those artists will fly there on private jets. Don't feel bad for these artists. They don't need money or free airplay. A lot of them have their own personal sponsorship deals, none of which are regulated by the FCC.

 

[b-turner]

In Today's Daily Digest is this letter from Carr to iHeart.

https://docs.fcc.gov/public/attachments/DOC-409718A1.pdf

Carr wants details on what bands are being paid and what their normal compensation would be and many other things that would ONLY be required if the licensee had violated FCC Rules.

First, he does not understand what payola is. Second he is on a witch hunt. I think probable cause needs to apply here. It seems there has been no complaint leveled but rather the FCC trying to turn over stones until they find something; at least they hope to. It is too much guilty until you prove yourself innocent. Now iHeart must spend payroll to put together facts and get them to the FCC with 10 days. I personally resent the head of the FCC doing this. I'm all for enforcement but not for harassment by the FCC.

 

[TheBigA]

It seems there has been no complaint leveled but rather the FCC trying to turn over stones until they find something;

The complaint came from Marsha Blackburn.

But yes, everything else you say is right. As long as everything is open and disclosed, there is no payola. That's why I think Pittman should invite him to the concert, and let him meet everyone. Also bring all of his MAGA talk show hosts.

 

[TheBigA]

iHeartMedia has responded to the letter from FCC's Carr:

iHeartMedia: Event Participation Has No Impact On Airplay.

iHeartMedia has responded to FCC Commissioner Brendan Carr’s request to Chairman/CEO Bob Pittman for information regarding securing artists for the iHeartCountry Festival. The company says it looks “forward to demonstrating

www.insideradio.com

Trump’s FCC Is Investigating Music Industry Payola Claims

The agency wrote a letter to iHeartMedia asking whether the audio giant is manipulating radio airplay.

www.hollywoodreporter.com

 

[Theater of My Mind]

Anytime you see the word "enhance" in a document these days there's a pretty good bet it was written by A.I.
ChatGPT loves using that word.

 

[boombox4]

For some reason, the new people at the FCC and certain legislators think that station operators program their stations to their own personal taste. They don't know the amount of research, right down to song by song selection of music, that goes into finding what listeners want.

Even Soros, whom I despise, is not going to modify formats to fit his political views because he knows that any product, whether radio or a shampoo, has to fill a customer's needs, not his.

I think the idiot in the room is Blackburn, however.

This leads to what may be a stupid question, but I will ask it anyway. Is music research still done for current based formats? I was under the impression from posts I've read here by the experts in the field that it is still done, but I have gotten into a discussion with an ex, 25 year radio veteran elsewhere who swears up and down that no research is done by any radio company for its current based formats, or by any radio station that is current based.

Perhaps I remember reading some of your comments (and comments by others here) about research for non-current based formats, and mistakenly thought it also applied to current based formats as well.

My apologies if this derails the thread. I didn't think a new thread was merited, and I didn't find the answer during a quick search here.

 

[TheBigA]

Is music research still done for current based formats?

Depends on what you call research. I just attended a music radio seminar where song research was discussed in detail. Everybody researches songs. I went to one session where Spotify talked about how they research a song. On that same panel was the PD of a station in Denver. Record labels also research their own songs. So yes. music research is done for currents based formats. It may not be done the way it was done 30 years ago, but its being done. One aspect that I heard during this panel was that the currents audience doesn't think in traditional formats. So that makes research even more important.

Getting back to the topic of this thread: The thing regulators and legislators don't understand is that music is a business. 70 years ago radio had a lot of power. Today, the music is where the power is. Regulators don't see how much things have changed since the 50s. The fact that broadcast radio is still constrained by these obsolete laws while other music platforms can exist without any regulation seems completely crazy to me.

 

[radiofan2023]

Drake and Iheart just settled a case about payola allegations related to Kendrick Lamar, but Drake is still suing Universal Music Group:

Drake settles legal action against iHeartMedia in dispute over 'Not Like Us'

Court records show Drake has reached a settlement with iHeartMedia in his ongoing legal dispute over Kendrick Lamar’s diss track “Not Like Us.”

apnews.com