Yesterday, New York State Attorney General Elliot Spitzer unveiled the details of Sony BMG's $10 million settlement after the company admitted to paying off radio stations to play its artists' singlesAccording to Spitzer, the record company paid radio programmers off with gifts in exchange for airplay for its artists. In one instance, a Sony BMG executive contemplated a plot to promote Killer Mike's "A.D.I.D.A.S" by sending deejays one Adidas sneaker. Deejays would receive the other sneaker after playing the single ten times. Elsewhere, Epic Records, a subsidiary of Sony BMG, offered a flat-screen television to San Diego's KHTS, but called it a "contest-giveaway." Meanwhile, Epic also used the giveaway tactic when giving Greenville, North Carolina's WRHT's program director PlayStation 2 videogames and an out-of-town trip with his girlfriend.
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After taking Sony down, Spitzer now has his sights on three other major record companies –Vivendi Universal, Warner Music Group, and EMI Group. He also plans to go after the radio companies that allegedly accepted gifts from the aforementioned labels. Spitzer's investigators have given subpoenas to several radio companies like Clear Channel Communications and Emmis Communications. New York's highly popular Hot 97 station is part of Emmis Communications.
"This is not a pretty picture. What we see is that payola is pervasive," Spitzer stated. "It is omnipresent. It is driving the industry and it is wrong."
Under the settlement, Sony BMG admitted "that various employees pursued some radio promotion practices on behalf of the company that were wrong and improper, and apologizes for such conduct."
Yesterday, according to insiders, Sony BMG terminated Epic's top promotion executive and disciplined four execs at Sony Urban and Epic by handing out financial penalties and placing the execs on probation. Sony also agreed to pay $10 million in fines. The sum will be donated to nonprofit organizations that promote music education.
For over four decades, federal law has forbidden radio programmers from taking payoffs or anything of value in exchange for playing specific songs on the air. The state investigation also uncovered that Sony BMG provided stations with artists for station-related concerts, paid for the station equipment or other bills in exchange for having its singles played. Sony BMG also hired independent promoters to pass money through radio stations. Furthermore, the probe found that the music giant attempted to alter industry airplay charts –making it seem like a single was climbing the charts by paying stations to play the cuts as sponsored advertisements. Sony BMG also used interns and hired vendors to call radio stations with song requests.
"Sony BMG and the other record labels present the public with a skewed picture of the country's 'best' and 'most popular' recorded music," Spitzer offered
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After taking Sony down, Spitzer now has his sights on three other major record companies –Vivendi Universal, Warner Music Group, and EMI Group. He also plans to go after the radio companies that allegedly accepted gifts from the aforementioned labels. Spitzer's investigators have given subpoenas to several radio companies like Clear Channel Communications and Emmis Communications. New York's highly popular Hot 97 station is part of Emmis Communications.
"This is not a pretty picture. What we see is that payola is pervasive," Spitzer stated. "It is omnipresent. It is driving the industry and it is wrong."
Under the settlement, Sony BMG admitted "that various employees pursued some radio promotion practices on behalf of the company that were wrong and improper, and apologizes for such conduct."
Yesterday, according to insiders, Sony BMG terminated Epic's top promotion executive and disciplined four execs at Sony Urban and Epic by handing out financial penalties and placing the execs on probation. Sony also agreed to pay $10 million in fines. The sum will be donated to nonprofit organizations that promote music education.
For over four decades, federal law has forbidden radio programmers from taking payoffs or anything of value in exchange for playing specific songs on the air. The state investigation also uncovered that Sony BMG provided stations with artists for station-related concerts, paid for the station equipment or other bills in exchange for having its singles played. Sony BMG also hired independent promoters to pass money through radio stations. Furthermore, the probe found that the music giant attempted to alter industry airplay charts –making it seem like a single was climbing the charts by paying stations to play the cuts as sponsored advertisements. Sony BMG also used interns and hired vendors to call radio stations with song requests.
"Sony BMG and the other record labels present the public with a skewed picture of the country's 'best' and 'most popular' recorded music," Spitzer offered
