By Steve Weinstein
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Do you want what's in the box or what's behind door number three? The latest episode in the radio payola version of Let's Make a Deal is looking like a zonk. ThenNew York Attorney General Eliot Spitzer's heroic crusade against payolanetting more than $35 million in settlements from the four major record labels and two broadcasters, spread piecemeal over the past three yearsmay still produce the change it initially promised, and clean up a perpetually dirty business. But the institutionalized practice of trading radio airplay for money and favors from record labels has proved stubbornly resistant to eradication since the first scandals in the late '50s.
Of course, it's moved into this millennium with stations such as Woodstock's WDST extorting an Xbox as payment for adding Starsailor and increasing Shannon McNally's spins. (If you've heard either artist, you're probably wondering why that's all the station got.) Spitzer's raid uncovered a flood of incriminating e-mails between major labels, independent promoters, and radio stations in which the stations were promised ticket giveaways, free concerts, and personal booty in exchange for airplay. His tenacious pursuit not only netted a lot of money and pledges of reform, but it forced the federal government to stop looking the other way.
Unfortunately, there's only so much Spitzer can do about the FCC's lack of regulatory will. Rumors of a settlement with the radio giants implicated by Spitzer (Clear Channel, Citadel, Entercom, and CBS Radio) first surfaced in January and cropped up in greater detail last week. According to reports, the broadcasters would pay a fine totaling $12.5 million and agree to a variety of measures aimed at increased transparency. The settlement, or consent decree, would require the stations to keep a database of any items of value they received, and to adhere to a gift limit. It also mentions independent compliance officers and a whistle-blower hotline. A separate side agreement the broadcasters negotiated with the American Association of Independent Music (A2IM) involves "Rules of Engagement," which seek to boost support for local and independent music. (These rules largely echo those contained in legislation introduced by Wisconsin Senator Russ Feingold.)
All of which is fine and good, but in the end it feels like a drop in an empty bucket of promises. Since consolidation consumed the industry in the wake of the Telecommunications Act of 1996, localism and adventurousness have been sucked out and replaced with risk-averse homogeneity. Like Wendy's and McDonald's, most markets are chain-dominatedClear Channel remains the poster child, having grown from 40 stations to more than 1,200, more than four times as many as its nearest competitor. From DJs recording their between-song patter hundreds of miles away to canned requests, it's questionable whether you can even call them "local" stations anymore.
Yet perhaps a worse problem is their refusal to play independent music; Norah Jones sold millions of records before radio ever caught on. From commercials to late-night talk shows, television has embraced hundreds of artists who apparently aren't "commercial" enough for radio. How is that? "Why is it that only 10 percent of the spins at radio are from the independents, whereas 30 percent of the sales are from independents?" asks Tommy Silverman, CEO and Founder of Tommy Boy Records. "It's obvious enoughit's because of payola."
In a shameless sop, the broadcasters have offered a half-hour radio show of "indie" music chain-wide once a week as part of the A2IM side agreement. The free airtime would be granted to companies not owned or controlled by the majorsSony BMG Music Entertainment, Warner Music Group, Universal Music Group, and EMI Group. The beneficiaries also can't have a market share larger than 5 percent, and must be represented as independent through sales tracking firm Nielsen SoundScan.
As recently as three weeks ago, that show was 90 minutes long. But now it has slid back to a mere half-hoursay, 20 minutes of actual music (or around six songs), once you account for commercials, station IDs, and DJ blatherwithout a guarantee it will even be locally produced. The decree comes with a rule prohibiting stations from broadcasting the show within the 12-to-6 a.m. dead zone, but don't be surprised to hear it early Sunday morning or at 11:30 on a weekday night.
Even this concession (which hasn't officially been mandated or approved by anyone yet) was a strugglethe oft-demonized Recording Industry Association of America balked at the plan. "We communicated our concerns about the constitutionality of content regulations," explains Jonathan Lamy, RIAA senior vice president of communications.
FCC Commissioner Jonathan Adelstein acknowledges the probable effect of payola on independent music but suggests it's outside of his agency's purview. "It may not be something our rules can address directly," he says. "We can't get involved in content-type decisions. I certainly would like to see more local artists played on the radio. That's one thing. Wherever they come from, independent or major label, it doesn't matter."
Longtime observers are skeptical. "For your ills, we're going to smack you on the wrist and make you do what you should've been doing in the first place," gibes USC professor and former radio programmer Jerry Del Calliano. Radio is now an unadventurous wasteland that refuses to acknowledge changing times and new innovations. How else do you explain iTunes beating the labels to marketing digital downloads, or the still-lagging promise of HD radio? Even now, radio complains about the potential monopoly of satellite radio on one hand, while the other supports higher webcasting royalties in an attempt to protect an industry that will disappear the moment Wi-Fi is available in your car.
"Innovation is missing because even a declining radio industry has too much to protect," Calliano says. "And then there's the declining record industry, with these CDs they feel they must protect. We're obsessed with the delivery systemwe are not obsessed with the content. And therein lies the problem."
Michael Bracypolicy director for the Future of Music Coalition, which has agitated on this issue for yearsis more sanguine. Their organization has issued several reports criticizing media ownership and major label policies. He points to the issue's long gestation period, and argues that with a Republican majority on the FCC board, this deal was the best we could get. While he sees the indie half-hour as a new opportunity, he doesn't believe it's the essential piece. "The most important part of the deal is the agreement between the broadcasters and the independent community to say, 'This is how we're going to work together,' " Bracy says. "Anything has to be viewed with skepticism. Just because they put their names on a piece of paper doesn't mean it means anything. But the consent decree does have increased enforcement."
If radio does follow through on its promises, and the airwaves start reflecting a more vibrant mix of artists, perhaps it can repeat the success of the early '90s musical boom. When Billboardcharts were first based entirely on sales and not partially on the ever-shady radio "spin," N.W.A.'s Niggaz4Life immediately rocketed to number 2. Several weeks later came Nirvana's Nevermind. Hip-hop, alternative, and country all took off when the charts came unshackled, and in a best-case scenario, something similar could happen again. Of course, this was before consolidation changed radio.
"Hopefully, this period of intensive investigation and new allegations will lead to better practices by the industry," Commissioner Adelstein says. "I'm already hearing from people in the industry that people are a lot more cognizant of the issue, and taking a lot greater care. I hope it's not just taking greater care they don't put things in e-mails."