Payola Scandals Show Why Performance Rights Tax Makes No Sense
from the reverse-economics dept
Apparently yet another payola case was just settled, leading Ars Technica to not only point out that this undermines the RIAA's entire basis for the Performance Rights tax, but to highlight the payola deals that have come to light over the past few years:
Sony was busted (and paid out much more) for even more egregious violations back in 2005. Sony's promoters went so far as to tell radio stations that the "real people" (they were planted) calling in to request songs had to be more convincing.It's hard to believe that anyone takes the RIAA seriously when it claims that radio stations don't provide much promotional value to artists when at the same time the RIAA labels keep funneling cash to radio stations under the table to get them to play their music. Pretending that it's somehow not just fair, but "morally" correct, to force radio stations to pay for the right to promote the RIAA's music, is really impressive from a "that takes guts" standpoint. But it's difficult to believe that anyone who isn't receiving a paycheck from the RIAA can actually support that position with a straight face.
"As for Saturday nights, you need to rotate your people," said one message from a promoter. "My guys on the inside say that it's the same couple of girls calling in every week and that they are not inspired enough to be put on the air. They've got to be excited. They need to be going out, getting drunk, or going in the hot tube [sic], or going clubbing... you get the idea."
Later that year, fellow major label Warner Music paid out $5 million to make its own payola problems go away.
In 2006, the world's largest music label, Universal, paid $12 million for a long history of payola. As the New York Times noted, the payola could take many forms, including trips and baseball tickets.
"In April 2004, Universal provided Mr. Michaels--by then a programmer at WHYI-FM in Miami--with a New York hotel room and New York Yankees tickets. The company booked the room under a false name and used a false Social Security number to conceal the transaction, the document states."
Finally, in mid-2006, the last major label, EMI, settled its own payola charges by paying $3.75 million in fines.
In 2007, the broadcasters were busted. CBS, Citadel, Clear Channel, and others paid more than $12 million and signed similar anti-payola consent decrees.