"Sony BMG settles New York radio probe"

[Tiesto]

Sony BMG will pay $10 million to settle a New York State probe into the way the music company influenced which songs were played on the radio, Attorney General Eliot Spitzer said Monday.

The investigation centers on a number of "pay for play" practices, widely known as "payola," including paying independent promoters to help secure airtime for songs. Under the Sony BMG settlement, the company agreed to stop making payments to radio stations in exchange for airplay, Spitzer said.

"Instead of airing music based on the quality, artistic competition, aesthetic judgments or other judgments, radio stations are airing music because they are paid to do so in a way that hasn't been disclosed to the public," Spitzer said at a press briefing.

As part of the settlement, Sony BMG admitted that payola "has continued to be an unfortunately prevalent aspect of radio promotion. Sony BMG acknowledges that various employees pursued some radio promotion practices on behalf of the company that were wrong and improper."

Spitzer also said the payola investigation continues at the other three major record companies--Universal Music Group, EMI Group and Warner Music Group, as well as the United States' largest radio companies.

"These practices are pervasive," Spitzer said. "We are far along with the other three labels. We have received documents and are deep in conversations with them about this." He added that he expected that Sony BMG's agreement to stop the payola would be the threshold against which other agreements are made.

Sony's $10 million payment will be distributed to not-for-profit entities that fund New York state programs aimed at music education and appreciation. Spitzer said he didn't know if the payment could count as a charitable tax deduction.

Asked for comment, an EMI spokeswoman referred to a statement by the company in its annual report, which confirmed Spitzer's investigation into the promotion of records on New York stations and said it was co-operating with the inquiry.

"EMI has a longstanding, strict written policy prohibiting unlawful radio promotion practices," the company said. "EMI is not currently aware of any reason for believing that there will be a material financial impact on the group."

Universal Music declined to comment, while Warner Music was not immediately available to comment.

Spitzer saved his harshest criticism for the radio companies and called on the Federal Communications Commission, which licenses the airwaves to radio companies, to be more vigorous in fighting payola.

"I would certainly encourage the FCC to take a very hard look at whether something that is this pervasive, something that is so corrosive to the marketplace, should not merely be investigated and pursued but whether some of these stations deserve to have their licenses stripped from them," Spitzer said.

Asked if he thought radio would improve as a result of the settlement, the attorney general laughed and said, "Listen, I don't think anyone wants me to make aesthetic judgments about what's on the air. I've been a Bruce (Springsteen) and Grateful Dead fan for decades. As far as I know, their music is still played on the radio, just not any stations that my kids listen to."

If I were Sony, I would tried to buy two or three radio stations with that money so I wouldnt needed to do any "payola", even more, I would gone after the MTV Networks that way I might push the Atrac format and all its devices into the masses

[Syrius]

At least Sony has admitted to wrong doing. Who knows if the other companies have even bigger and uglier skeletons in their closets?