News broke yesterday that New York Attorney General Eliot Spitzer’s 11-month investigation into radio payola has resulted in a $10 million dollar settlement from Sony, with similar arrangements with the other labels to follow.
Everyone is “outraged” of course, but fighting payola is like crushing spiders — they lift up some rocks once in a while, valiantly stomp the offenders, and then go back to pretending like it’s not a naturally occurring state of affairs. The practice became a federal crime in the 1950s after the major labels complained to the government about independent labels bribing their way onto the scene — paying the DJs was the big boys’ game plan, and they didn’t like these new kids using the same tactics. So, the direct payment of a third-party gatekeeper for playing a song became illegal, which let the major labels invent a much more capital-intensive, complicated payola system involving “independent consultants” that continued the same game while keeping out smaller labels lacking the necessary “promotion” budget. (For more, see Fredric Dannen’s book Hit Men.)
The music industry is extremely unstable: What will “hit” is almost completely unpredictable and the companies involved must scurry around trying to figure out how to match consumers’ wildly fickle and protean tastes. The easiest way to stabilize the market is to secure exposure. Consumers don’t usually buy songs they’ve never heard, and with lots of plays on the radio or on MTV (which for you youngsters out there, used to play music videos), simple musicians become “stars” overnight to even the most passive, casual listeners/viewers.
So, payola is a natural thing for companies to pursue, but in the other corner, there’s the “odd” American liberal idea that the airwaves should be for the people, whether owned by a private or public company. Federal prosecutors do not normally pursue payola cases, but there is an ethical and legal precedent that bribing DJs and cultural intermediaries is a bad thing, and I would assume that most Americans agree with this principle. This current case proves again that the United States government takes pop culture seriously, and they should: Movies, magazines, songs, and images are not only big business, but define our identities, shape social discourse, and end up becoming explanatory agents for the world around us.
Meanwhile in Japan, there is no concept of “payola” or widespread consciousness of the practice, seeing that direct payment for the exposure of songs is a standard, semi-legal part of industry. The Japanese government has never shown much antipathy towards cartels — the dust is so thick on the Anti-Monopoly Law of 1947 that you can hardly read the text — and no one particularly thinks that media outlets should be under different guidance than supermarkets. If Coca-Cola can pay for an end-aisle display at a grocery, why can’t Sony buy time for Puffy on J-Wave?
But this attitude of Japanese policy-makers resembles another theme of Japanese society: Pop culture is rarely taken seriously. And that’s crazy, seeing how vibrant popular culture is in Japan. Some of this is that Japan’s pop culture market is relatively new, and I assume that the old men who run the country couldn’t possibly see the importance of a bunch of silly, frilly things primarily consumed by women and children (especially since you’re supposed to give up all interests in these frivolous matters after becoming a shakaijin).
Now that the Japanese “contents” industry is a ¥20 trillion market, JETRO and the think tanks are starting to look at pop-cult with a more serious eye, but if the bureaucrats and politicians continue to support oligopolistic industries and suppress competition as part of a national economic strategy, I doubt there would be any precedent on which to go after payola.
While the American government is hardly a noble knight for killing the occasional exhibition beast, as a liberal American distrustful of big business and collusion, I do agree with the anti-payola law. Payola ultimately benefits the firms with the most capital and acts as an entry barrier to smaller companies with innovative ideas. Creating a record costs almost nothing, but getting it played evidently costs hundreds of thousands of dollars, plasma televisions, drugs, prostitutes, and exotic vacations. But that’s all over now, right?
Update: Here is an interesting pro-payola article from Slate.com that brings up a lot of similar points. I am hesitant to agree with his overall idea that consumers can perfectly counterbalance industry collusion through their purchase power. Even if we all hate Celine Dion and don’t buy her records, she’s still a “star” if played on the radio a million times in the major markets, and a lot of other companies will use that artificially frequent radio play as a guide for their own organizational decision making. If successful, payola creates fake stars, who eventually create a distortion in the cultural code.