Recording Industry Says AM-FM Broadcasting is ‘A Form of Piracy’

From Wired’s Threat Level:

[T]wo weeks ago, the recording industry, under the umbrella group musicFIRST, sent the NAB four digital downloads: “Take the Money and Run” by the Steve Miller Band; “Pay me My Money Down” by Bruce Springsteen; “Back In the U.S.S.R” by Paul McCartney and “A Change Would Do You Good” by Sheryl Crow.

Broadcasting music without payment is akin to piracy, the industry says.

“It’s a form of piracy, if you will, but not in the classic sense as we think of it,” said Martin Machowsky, a musicFirst spokesman. “Today we gifted them a can of herring, about their argument that they provide promotional value. We think that’s a red herring.”

Really? If it’s a red herring, it’s an awfully expensive one. Here’s just one small excerpt from the New York State Attorney General’s investigation into payola (buying airplay) by Sony:

The inducements for airplay, also known as “payola,” took several forms:

• Outright bribes to radio programmers, including expensive vacation packages, electronics and other valuable items;

• Contest giveaways for stations’ listening audiences;

• Payments to radio stations to cover operational expenses;

• Retention of middlemen, known as independent promoters, as conduits for illegal payments to radio stations;

• Payments for “spin programs,” airplay under the guise of advertising.

E-mail correspondence obtained during the investigation shows that company executives were well aware of the payoffs and made sure that the company got sufficient airplay to justify these expenditures.

Hiding under all of this is the scarcity theory of talent — the idea that if we didn’t have Bruce Springsteen to play on the radio we’d have to listen to William Hung.

But it’s simply not true. The scarcity is an expensively constructed illusion. And the players in that game refuse to realize it. So artists have their companies pay to lock out competition on the radio, which allows them become crucial fixtures to the medium — and then the artists turn around and say look, your radio station relies on our songs to function — we want our fair share of the profit!

I’m not sure what models will eventually be adopted to support artists. I think there’s some legitimate questions on how we can accomplish this in a global age.

But throwing around a lot of money to create scarcity and then using that scarcity to price gouge is the worst of all possible worlds. We need to make sure our future models are based the abundance of talent — routing more diverse art to the right people instead of fighting over the one thing that will get delivered to everybody.

*That* would be herring worth paying for.

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