AGAIN, PAYOLA

...General economic circumstances probably triggered the decline...

...Record promoters work with radio programming directors in much the same way lobbyists stroke politicians: They treat them to expensive meals and supply them with services designed both to increase a station's audience and to ensure exposure for a new album...

...Often enough, the largesse includes giveaway albums and concert tickets as listener bait...

...Some of the tactics have gotten almost obscene...

...In the last Steve Coll is a free-lance writer in Los Angeles...

...record sales have shot up from hundreds of thousands to hundreds of millions...

...But when it comes to the bread-and-butter acts, the major labels are relying on schmoozy, big-dollar radio promotion more than ever...

...In part, the increase reflects the rise in the price of oil-based vinyl, but it can also be chalked up to bad planning: Record companies jumped to cash in on the mega-platinum sales of the mid-1970s with higher prices...

...In fact, several big, established labels have signed distribution agreements with some of the more prosperous small-timers, and others have formed "satellite" labels where new talent can be developed and tested, even with limited marketing resources...

...In another quarter of the entertainment industry, however, some insiders are calling for a Congressional investigation...

...But there are a lot of guys out there carrying around a lot of things besides records to get records on the air...

...The Government has tried over the years to investigate payola," one independent promoter with over two decades in the business says...

...By pouring money desperately into radio promotion, the corporate labels have fostered corruption under their own roofs—and ensured that the trend of declining record sales will continue...

...Some believe that the price hikes alone have caused the recession...

...And even if the music sells, these business practices drive the price up because they increase overhead but do nothing to stimulate new sales growth...

...The disc jockey became nothing more than an air "personality," with little or no control over what made it to the turntable...

...No one trusts anyone," says one independent promoter...

...From a handful of maverick outfits, the industry has swollen into a world-wide corporate network dominated by multinational entertainment companies...

...The new companies ignore corporate radio altogether because they cannot afford high-priced promoters...

...The committee found that most of the day's popular television quiz shows were rigged, and that top disc jockeys in cities like New York, Boston, and Los Angeles were on the take, receiving regular "salaries" from record promoters in exchange for airplay for certain albums or songs...

...They were routine...

...I think they've reached a breaking point where they've priced the middle-income consumer out of the market...

...For some companies, the success of a single new release by a well-known artist may mean the difference between profit and loss...

...The most sweeping change in the record business since the days of the Harris Committee, however, was unrelated to the industry's black eye...

...Successful independent promoters boast special access to station programming directors in particular regions or cities...

...And that was in the suburbs, not a big market9 As for radio promotion, the prolonged slump has created a mood of desperation...

...But programmers and promoters alike acknowledge that the retainers record companies cough up for independent promotion often hide the costs of taking care of key programmers' "habits"— and outright cash bribes...

...Since 1978, consumers have been spending less on entertainment in general...

...Tinsel Town withheld its star witnesses and sent the embarrassed Representatives back to Washington without a trace of the scandal they came looking for...

...Instead, they identify narrow markets and invest in more direct approaches: television and print advertising, extensive touring and live performances, regional marketing, and grass-roots publicity campaigns...

...All this concentrates an enormous amount of money and power in the hands of a small number of independent promoters and radio programmers...

...It is an odd characteristic of corporate capitalism that when a market begins to dry up or stiff competition looms, large businesses retrench rather than retool...

...In particular, the finger is being pointed at independent record promoters, who, some say, are using illegal payoffs to line up radio airplay in crucial markets for client record companies and performers...

...Most important, radio stations began to give programming and music directors sole responsibility for deciding what would go on the air...

...This gap in the reporting system allows independent promoters extra "flexibility" when lobbying for airplay of their records...

...The corruption and diversion of resources that this strategy engenders distorts the kind of music we hear and shapes our preferences...

...He turned [the offer] down because he knew it'd be a long time paying it back...

...in-house accountability for radio stations increased...

...But the amazing thing is that he's PD [programming director] at a secondary station in the suburbs, not in a big market...

...Since the companies rely solely on the trade sheets to find out what kind of airplay their singles and albums are getting nationally, promoters devote their efforts to the handful of major stations that report their playlists...

...Smith says that the decision to drop the independents was purely a business one...

...Still, the corporate labels continue to pour money into radio promotion because that is what brought them success in the first place...

...They claim the recession-plagued record industry is resorting to the "payola" methods of the 1950s in an effort to boost album sales...

...Innovation is rare, and never so radical as to upset the system of radio marketing...

...That does not mean that such top-selling Elektra artists as the Eagles or Jackson Browne will release new albums without the benefit of high-powered independent promotion...

...Said another promoter, "There is what I call a 'Gang of 12' out there who have a direct line into key programmers' offices...

...But such an inquiry would at least shake the record business out of its rotting complacency, something music lovers everywhere deserve...

...In general, these smaller companies are flourishing, though their profits are certainly not on the scale of the large corporate labels...

...Sales are slumping now, but the big labels still regard radio as the best way to reach consumers...

...People have become more desperate because of the sales slump...

...Conglomerates like Warner Brothers-Elektra-Atlantic gross tens of billions of dollars in yearly revenue...

...If only the Beatles could regroup . . . even just the three of them...

...The growth over the last fifteen years of album-oriented FM radio, programmed for the huge twenty-five-to-forty-year-old record-buying market, helped set off the record sales explosion of the 1970s...

...Retainers for independent promoters can run in the tens of thousands of dollars per record per week—a far cry from the cash-stuffed envelopes of yore...

...The majors can learn a great deal about alternative marketing strategies from the newcomers...

...Programming directors supposedly select music to play for the enjoyment of the listener and promoters are sent in to influence their choices...

...The specter of the middleman paying radio programmers to make a song a hit has haunted the record business from its birth...

...Undoubtedly, a renewed Government investigation of payoffs in the record industry would meet the same indignation and resistance that greeted the last Congressional touring party, to visit the city of bright lights...

...Companies can spend tens of thousands of dollars pushing an album to key people in the radio industry before the public has ever heard one cut...

...During the hearings, scores of record distributors and promoters confessed to handing out bribes to get music on the air...

...Companies can spend tens of thousands of dollars pushing an album to key people in radio before the public has heard one cut For their part, record company executives admit that promoter fees are high, but most see them as a necessary marketing cost...

...with a vial of cocaine and a woman...

...Studio executives, directors, and actors joined in unusual solidarity to brand the House subcommittee hearings a "witch hunt...

...When I went out on the road I,picked up an envelope from the distributor that was filled with hundred dollar bills...

...As radio airplay became the keystone of record company marketing strategy, the importance of the independently contracted promoter grew by leaps and bounds...

...These labels concentrate on artists whose music lacks the broad commercial appeal necessary to justify the enormous costs of old-style radio promotion...

...In fact, the only effective investigation of payoffs in the record business took place more than twenty years ago, when Representative Oren Harris of Arkansas chaired a special House subcommittee during the 1959-1960 Congressional session...

...Further, the trades do not monitor the reporting stations and have no way of knowing whether what is reported to them actually reflects the stations' choices...

...Often, they align themselves with a certain label or contract themselves to promote the albums of several artists or groups...

...Says Bob Delanoy, a manager of several major retail outlets in California, "Record prices are fragile...

...And the record companies will develop only those acts which fit easily into the constricted formats that evolved as radio programming itself became a profitable corporate endeavor...

...The number of potential bribe-takers was smaller...

...records are among the first discretionary items passed up...

...Alan Freed, who has since been immortalized in film as the "father" of rock 'n' roll, was fired from a prestige-laden job at WABC in New York because he refused to sign a statement saying he had never accepted money for putting a record on the air...

...Once the fees are paid, record companies have no way of accounting for how the money is spent—and no responsibility if some of it goes for bribes...

...That is exactly what the record business has done since its recession began...

...Stoking the star-maker machinery behind the popular song Some indictments resulted...

...Says one independent promoter on the West Coast, "I know one programming director who was invited by a promoter to spend a night at the Bonaventure Hotel in L. A. with the promise that a vial of cocaine and a woman would be provided for his amusement...

...This set-up places tremendous pressure on both the programming directors of these stations and on the promoters who must get results from them...

...This throwback to the payola days both coincides with and grows out of the record industry's current doldrums...

...A few labels, including Columbia and Elektra Records, claim they are phasing the independents out of their promotion budgets altogether...

...In the meantime, arguments for "retooling" present themselves in the operations of the hundreds of small record companies that have sprung up across the country during the last few years...

...But the companies gave momentum to the downward slide by raising record prices as much as 60 per cent in the last two years...

...So despite their enormous fees, prominent independent promoters have become even more important to record companies...

...This kind of influence is expensive, even in the eyes of big-time labels with deep pockets...

...Label staffs have been cut back across the board, and the industry's notorious expense accounts have been fitted with bottoms...

...And so the industry retrenches, waiting for the big one...

...it is not the playlist but the trade report that counts in the end...

...The pop music world of open request lines and obscure all-night disc jockeys is gone, replaced by a new order of formulaic, superstar programming and "multi-platinum" album sales...

...Since 1977 and 1978, when sales of such albums as Saturday Night Fever and Fleetwood Mac surged to almost fifteen million and seemed to promise nothing but rosy futures, sales figures have declined steadily...

...But air time is not directly purchased like radio spots for other goods and services...

...And since the payoffs are made by independents—and not by staff promoters—it is difficult to implicate record companies in any illegal doings...

...VIEWS REVIEWS AGAIN, PAYOLA BY STEVE COLL When Congress came to Hollywood last spring to sniff out rumors of widespread cocaine use and influence-peddling in the film and television industries, it was greeted with something less than a gala reception...

...All they've come up with is a few Judases to put on pedestals to take the rap for an awful lot of people...

...It has simply gotten to be too expensive to carry on," says Bill Smith, national singles promotion director for Elektra...

...They can guarantee airplay...

...In Hollywood, where there is always hope for a redeeming blockbuster, old ways of doing things die hard...

...others are on the way down...

...It isn't for sale—that's illegal...

...I think they've given up hope, and by doing so they've given the radio and record business a license to steal...

...Artists' managers often pay for promotion out of their own pockets—as do some artists themselves...

...It was my job to hand them out as I saw fit...

...They are by far the most important promoters in their regions...

...A relative pittance is spent on consumer advertising on television or in other media...

...air time for new releases thus remains the single most important means of pitching a record...

...The only results they see are tallies in airplay charts published regularly by music trade papers such as Billboard and Radio & Records...

...nor did it herald reform...

...two decades, annual U.S...

...Ostensibly, the large sums are the salaries the promoters command because of their access to the right people...

...If the record is a bomb, the outlays can be suicidal...

...We didn't think the payoffs were illegal ," says one promoter who was working in New York at the time...

...If inflation made times hard, though, the companies have made them harder by emphasizing one-on-one promotion over advertising at the consumer level...

...Peter Tripp, the most popular DJ in New York City at the time, was charged by the Justice Department with accepting bribes, as was Hunter Hancock, a renowned jock in Los Angeles...

...Large sums are going for bribes and special favors that win the hearts of radio programmers—and that ultimately shape our musical tastes, deciding for us what music we will hear and which records we will buy...

...I know one programming director who was offered a night in LA...

...Several big labels have gone under...

...Only in Hollywood, where all sins are atoned for by success in our media culture, could such corruption and inefficiency flourish...

...Why change anything, when somewhere around the corner there may lurk an idea or an artist who will rejuvenate consumer interest (a la Star Wars in the movie world) and set the snowball rolling once again...

...Though grand juries handed down few indictments, the publicity generated by the Congressional investigation did force some reforms...

...It was clear, though, that the revelations only scratched the surface of the payola problem...

...For months, revelations of payoffs and corruption in the television and recording industries were splashed on newspaper front pages across the country...

...It is virtually impossible for any small company to break the hold that independent promoters have on radio in the major cities...

...For consumers, the result is stale, utterly predictable repetition of popular musical styles...