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Middlemen exerting increasing influence on record industry Ralph Blumenthal, New York Times |
Thursday, May 30, 2002
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It was one of the scandals that defined the 1950s -- payola, the payments to radio disc jockeys to push certain records. Congress outlawed the practice in 1960, making it a federal crime to play for pay, unless the financial arrangement was announced on the air. Now, however, a growing coalition of music and consumer groups and members of Congress charge that payola is back in a disturbing new form involving middlemen promoters who skirt the law while operating legally to the detriment of artists and the listening public. As a result, they say, new artists have diminished chances for recognition, and listeners are bombarded with the same music. The complaints, entwined with concerns over concentration of the radio industry in the hands of a few media giants, are drawing the scrutiny of regulators and Congress. "There is an ongoing review at the Federal Communications Commission," said one federal official who would not be named. In a recent telephone interview, Sen. Russell Feingold, the Wisconsin Democrat in the forefront of campaign financing reform, called the new payola allegations "an exceptional abuse" and vowed to introduce legislation to close loopholes in the law. Earlier this year, he and Rep. Howard Berman, D-Los Angeles, wrote to Attorney General John Ashcroft and the FCC chairman, Michael K. Powell, urging an investigation of consolidation in the radio and concert promotion business. Berman said he was particularly concerned about allegations that one of the largest entities, Clear Channel Communications, retaliated against Britney Spears and other artists who declined to use its concert promotion service by refusing to play their songs and burying their ads. A spokesman for Clear Channel Radio did not respond to a request for comment. According to the transcript of an ABC "20/20" report scheduled for broadcast on Friday, even artists whose records get no play on the radio feel they have to pay fees to the so-called independent promoters, known as "indies, " for fear that their records might not be played in the future. The complaints about a reemerging payola problem were set forth last week in a statement to congressional leaders and the FCC by a coalition that included the American Federation of Musicians, the American Federation of Television and Recording Artists, the Nashville Songwriters Association International and the Recording Industry Association of America, representing the record labels. "Artists shouldn't have to pay for access to public airwaves," said Michael Bracy of the Future of Music Coalition, another of the groups. As they described it, in one form of the new "de facto payola" that has spread widely in the last two years, radio station group owners establish exclusive arrangements with promoters who guarantee the stations a fixed fee that could reach $1 million a year. In exchange, the stations give the promoter first notice of new songs added to the playlist each week. The promoter, in turn, is paid by record labels and artists to represent their interests. Because of the exclusive arrangement, radio stations deal only with the promoter, not the label or artist, said Cary Sherman, president of the recording industry group. So, he said, "if you want to pitch a song you have to go through the independent promoter." On the face of it, there is no quid pro quo between the fees to the promoters and the songs added to the playlist. But the inferred connection gives the promoters considerable weight, critics say. A call to the Chicago headquarters of one of the leading promoters, Jeff McClusky & Associates, was not returned. The power of the promoters has been magnified, the music groups said, by the consolidation of the radio industry since passage of the Telecommunications Act of 1996. That year, they said, there were 5,133 owners of radio stations. Today, they said, for the Contemporary Hit Radio/Top 40 formats, only four radio station groups -- Clear Channel, Chancellor, Infinity and Capstar -- control access to 63 percent of the format's 41 million listeners nationwide. For the country format, they said, the same four radio groups control access to 56 percent of the 28 million listeners. |
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