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Payola-as-you-go radio regulation

The real answer to the old problem is new technology

Los Angeles Times

Following the lead of New York Attorney General Eliot Spitzer, the Federal Communications Commission launched a formal probe this week into allegations that four major radio corporations secretly took cash or gifts to spin discs. The investigation raises the question: Why do regulators still care about payola?

Sure, there's the small matter of the law banning it. And the practice is unfair. The better question, though, is whether the technological and competitive landscape has changed enough to make payola ineffective or, better yet, self-defeating.

The music industry has been dogged for more than a century by evidence that music publishers, record companies or promoters have bought exposure for songs. The outcry about payola prompted Congress to pass a law requiring radio stations to disclose payments or gifts they received in exchange for airplay. The FCC has a similar rule.

The main victims of payola are the artists, songwriters and labels that can't afford to buy their way into the system. Getting a song played on commercial radio stations is the easiest route to having a major hit; just look at the overlap between the songs getting the most radio airplay and the CD, download or ring-tone sales charts. The rapid corporate consolidation of radio, meanwhile, has made it even harder to get on playlists.

Given that the airwaves belong to the public, not to the radio stations that use them, it makes sense for regulators to try to protect it against payola and other corrupting practices that distort the market. Yet the rules against under-the-table gifts haven't brought about any fundamental changes. Instead, they've simply given birth to new middlemen who collect money from record companies with one hand and pay stations with the other.

Ultimately, the best weapon against payola is new technology. A band might not be able to hit Britney Spears' sales figures without radio airplay, but it can promote and distribute its music cheaply and easily through the Internet. At the same time, radio programmers have lost their stranglehold on the nation's musical tastes. Hip television shows and advertisers, satellite radio, Internet broadcasters and online music services have all emerged as alternative sources of music, and MP3 players let people take their music collections with them wherever they go.

Sure, the new outlets for music could attract payola-like abuses, but their ranks are so large and growing that there's no way to buy off all of them. And they're already having their effect, as seen in the dwindling market share for the artists who hog the airwaves. If commercial stations insist on following the money, instead of the shifting tastes of music fans, they'll lose their audience. That's the punishment they deserve; it's up to music fans to mete it out.