Courtsey of the AP:
By MICHAEL GORMLEY
ALBANY, N.Y. - Warner Music Group Corp. has agreed to pay $5 million to settle an investigation into payoffs for radio airplay of artists, New York Attorney General Eliot Spitzer said Tuesday.
Warner is the second major recording company to reform and settle with Spitzer in a practice the attorney general said was "pervasive." In July, Sony BMG Music Entertainment agreed to pay $10 million and stop bribing radio stations to feature artists.
"Unfortunately, other companies continue to engage" in the practices, he said. "I applaud Warner's decision to halt this conduct, cooperate fully with my office, and adopt new business practices."
The money that Warner Music has agreed to pay in the civil settlement will be distributed by the Rockefeller Philanthropy Advisors to New York State to fund music programs in the state.
"The reforms we have agreed to with the attorney general are consistent with the internal reforms that our new management team implemented earlier this year," said Warner Music spokesman Will Tanous. "We consider this to have been a valuable process. From our perspective, radio cannot be too consumer-driven. The music that people hear on the radio always should represent the highest quality the industry has to offer."
Spitzer said the settlements with Sony and Warner should benefit artists and consumers, who can expect a wider range of artists on the airwaves based on "artistic merits."
"Artists, especially new artists and lesser known artists who did not have major backing, should find a more open environment to have their music heard and hopefully succeed," said Spitzer, a Democrat running for governor in 2006.
A 1960 federal law and related state laws bar record companies from offering undisclosed financial incentives in exchange for airplay. The practice was called "payola," a contraction of "pay" and "Victrola," the old wind-up record player.
In the 1950s and '60s, most payola involved direct payments of cash to DJs. Today, payola is in the form of "direct bribes" to radio programmers, including airfare, electronics, iPods, tickets to top sporting events and concerts; as well as payments to radio stations for expenses and for use in contests. He also said companies have hired "independent promoters" to act as conduits for payments to radio stations and pay for "spin programs" to increase airplay of some recordings that are supposed to be based on popularity among listeners.
Spitzer said he hadn't sought criminal charges in the payola cases because the related laws governing are more specific and difficult to violate than the civil laws.
In July, federal regulators began taking a closer look at the scandal that led to the settlement with Sony. Federal Communications Commission Chairman Kevin Martin promised swift action against anyone violating rules against "pay-for-play" in the music industry.
"The settlement with Warner Music Group adds more dirt to the mountain of evidence that payola is rampant in the music business," said one of the FCC's Democratic commissioners, Jonathan Adelstein, on Tuesday. "The FCC needs to act on this evidence and conclude as soon as possible the investigation we are now undertaking."
"We have yet to see any real evidence of FCC activity in this area despite overtures by us to join us," Spitzer said.
Spitzer has also asked for documents from EMI Group PLC and Vivendi Universal SA's Universal Music Group.
##<P ID="signature">______________
It's radio, not brain surgery - Jim deCastro
When in Atlanta, listen to 85 FM DIRK!</P>
By MICHAEL GORMLEY
ALBANY, N.Y. - Warner Music Group Corp. has agreed to pay $5 million to settle an investigation into payoffs for radio airplay of artists, New York Attorney General Eliot Spitzer said Tuesday.
Warner is the second major recording company to reform and settle with Spitzer in a practice the attorney general said was "pervasive." In July, Sony BMG Music Entertainment agreed to pay $10 million and stop bribing radio stations to feature artists.
"Unfortunately, other companies continue to engage" in the practices, he said. "I applaud Warner's decision to halt this conduct, cooperate fully with my office, and adopt new business practices."
The money that Warner Music has agreed to pay in the civil settlement will be distributed by the Rockefeller Philanthropy Advisors to New York State to fund music programs in the state.
"The reforms we have agreed to with the attorney general are consistent with the internal reforms that our new management team implemented earlier this year," said Warner Music spokesman Will Tanous. "We consider this to have been a valuable process. From our perspective, radio cannot be too consumer-driven. The music that people hear on the radio always should represent the highest quality the industry has to offer."
Spitzer said the settlements with Sony and Warner should benefit artists and consumers, who can expect a wider range of artists on the airwaves based on "artistic merits."
"Artists, especially new artists and lesser known artists who did not have major backing, should find a more open environment to have their music heard and hopefully succeed," said Spitzer, a Democrat running for governor in 2006.
A 1960 federal law and related state laws bar record companies from offering undisclosed financial incentives in exchange for airplay. The practice was called "payola," a contraction of "pay" and "Victrola," the old wind-up record player.
In the 1950s and '60s, most payola involved direct payments of cash to DJs. Today, payola is in the form of "direct bribes" to radio programmers, including airfare, electronics, iPods, tickets to top sporting events and concerts; as well as payments to radio stations for expenses and for use in contests. He also said companies have hired "independent promoters" to act as conduits for payments to radio stations and pay for "spin programs" to increase airplay of some recordings that are supposed to be based on popularity among listeners.
Spitzer said he hadn't sought criminal charges in the payola cases because the related laws governing are more specific and difficult to violate than the civil laws.
In July, federal regulators began taking a closer look at the scandal that led to the settlement with Sony. Federal Communications Commission Chairman Kevin Martin promised swift action against anyone violating rules against "pay-for-play" in the music industry.
"The settlement with Warner Music Group adds more dirt to the mountain of evidence that payola is rampant in the music business," said one of the FCC's Democratic commissioners, Jonathan Adelstein, on Tuesday. "The FCC needs to act on this evidence and conclude as soon as possible the investigation we are now undertaking."
"We have yet to see any real evidence of FCC activity in this area despite overtures by us to join us," Spitzer said.
Spitzer has also asked for documents from EMI Group PLC and Vivendi Universal SA's Universal Music Group.
##<P ID="signature">______________
It's radio, not brain surgery - Jim deCastro
When in Atlanta, listen to 85 FM DIRK!</P>