Feeds

Spitzer the Blitzer goes after music label payola

This is for the children

  • alert
  • submit to reddit

Top three mobile application threats

The music labels, accustomed to bullying teenagers, appear to have pissed off the wrong man. New York attorney general Eliot "The Blitzer" Spitzer has served up subpoenas to the major labels, as he digs for information on their relationships with promoters who are thought to pay radio stations to play certain songs, according to a report in The New York Times.

The paper states that Universal Music Group, BMG, EMI Group and Warner Music Group have all been asked to turn over contracts and billing records that show their ties to these so-called song middlemen. This method of paying promoters goes around a federal statute most commonly known as the payola law that forbids bribing radio broadcasters.

"Broadcasters are prohibited from taking cash or anything of value in exchange for playing a specific song, unless they disclose the transaction to listeners," the Times reports. "But in a practice that is common in the industry, independent promoters pay radio stations annual fees - often exceeding $100,000 - not, they say, to play specific songs, but to obtain advance copies of the stations' playlists. The promoters then bill record labels for each new song that is played; the total tab costs the record industry tens of millions of dollars each year."

Spitzer is best known for cracking down on financial firms and being a very aggressive attorney general.

His apparent investigation into the music labels comes as they are trying to take the high road by suing thousands of their customers for piracy. Much to the labels' dismay, their most recent sales figures show that revenue is actually on the rise despite still rampant file-trading and a massive increase over the past two years in broadband connections. Myriad music executives this week were seen covering their eyes and ears in a show of solidarity against these sales gains.

Spitzer's investigation shouldn't be too troubling for the labels. It's thought that the payola practice has died down significantly from its glory days many years ago. In addition, the labels have faced a worse attack before when the federal government charged them with and made them pay up for large scale CD price-fixing operations. ®

Related link

NYTimes Spitzer story

Related stories

Music sales rise despite RIAA's best efforts
MP3 music service draws industry fire
RIAA hunts down more file-trading scum
Tech bubble banker goes to jail
Spam King dodges $20m big stick
Spitzer the Blitzer unseals more Bubble Era memos

Build a business case: developing custom apps

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.