Sony BMG to pay $10m in 'pay for play' probe
One of the biggest United States music companies, Sony BMG Music Entertainment, agreed on Monday to pay $10-million and to stop paying radio-station employees to feature its artists to settle an investigation by New York attorney general Eliot Spitzer.
The agreement resulted from Spitzer’s investigation of suspected “pay for play” practices in the music industry.
A Sony BMG spokesperson didn’t immediately respond to a request for comment.
But Spitzer said Sony BMG has agreed to hire a compliance officer to monitor promotion practices and to issue a statement acknowledging “improper conduct” and pledging higher standards.
He commended the company for its cooperation.
“Our investigation shows that, contrary to listener expectations that songs are selected for air play based on artistic merit and popularity, air time is often determined by undisclosed pay-offs to radio stations and their employees,” Spitzer said. “This agreement is a model for breaking the pervasive influence of bribes in the industry.”
Spitzer had requested documents and information from EMI, Warner Music Group, Vivendi Universal SA’s Universal Music Group as well as from Sony BMG, which is a joint venture of Sony Corporation and Bertelsmann AG.
Spitzer said his investigation showed Sony BMG paid for vacation packages and electronics for radio programmers, paid for contest giveaways for listeners, paid some operational expenses of radio stations and hired middlemen known as independent promoters to provide illegal payments to radio stations to get more airplay for its artists.
Spitzer also said e-mails among company executives showed top officials were aware of the payments.
He said Sony BMG employees sought to conceal some payments by using fictitious contest winners to document the transactions.
Record companies can’t offer financial incentives under a 1960 federal law that made it a crime punishable by a $10 000 fine and up to a year in prison to offer money or other inducements to give records airplay. The practice was called “payola”, a contraction of “pay” and “Victrola” record players.
The law was passed in response to the payola scandals of the 1950s and early 1960s that implicated some then-famous DJs.—Sapa-AP.