Scholars discuss the practice of payola in the music industry and reforms to promote fairness for artists.

Why are some songs played over and over on the radio? Some songs are promoted by sponsors who pay to play a particular song on the radio. This pay-for-play exchange, where artists or labels pay broadcasters for airtime, is called “payola”.

Scholars disagree on the level of harm that payola presents to the music industry. Some argue that modern music is drawn more by the consumer than by the party. However, others argue that pay-for-play reduces opportunities for underrepresented artists with limited resources.

Entertainment magazine Variety In 1938, the term “payola” was coined. However, the practice of payola has a much longer history than radio and digital streaming. Efforts to regulate the practice began in the mid-1890s, when some music publishers agreed to pay singers to promote their songs. This early attempt to self-regulate payola failed because music publishers still made payments in secret. Ultimately, this practice proved to be a serious problem in the music industry.

Payola is legal in the United States, with limitations. Under the Federal Communications Act and Federal Communications Commission rules, a radio station must disclose that it received payment for playing a song at the time the song is played. It should also reveal the identity of the payer. Despite these disclosure requirements, however, many gaps and work remain. The US Congress and specifically the US House Oversight Committee investigated net bribery in 1959. Other loopholes include payments to digital platforms instead of radio.

Digital platforms continue to reshape the music industry, complicating modern payola. For example, streaming services like Spotify can add songs to users’ “recommended” playlists in exchange for compensation, raising concerns about payola. Today, large media companies, such as digital streaming platform SiriusXM, also own most of the major radio stations, which has led to payments for payola practices by digital streaming platforms such as Universal Music Group and Sony.

Music industry observers have also noted concerns about Payola’s potential to exclude independent artists who cannot afford to pay to promote their music, rather than artists who pay radio stations for plays. are more encouraged to play. To protect artists from payola, Senator Alex Padilla (D-Calif.) introduced the American Music Fairness Act (AMFA) in 2023. The bill has not been signed into law but would require radio stations to pay performance royalties when artists’ songs are played on air. . While well-funded artists can still pay for airtime under the bill, AMFA will provide a check on radio stations’ use of payola through the Copyright Royalty Board’s determination of specific royalty rates and requirements.

Some scholars, such as Adam Reinhoff of Middle Tennessee State University, argue that banning payola could increase the access of small record labels to radio stations. At the same time, however, effective restrictions on payola may lead to a reduction in the variety of music played and an overall reduction in total record sales for all artists. Gaining equity for artists by banning illegal payola and maintaining a multi-billion dollar music industry with product variety is proven to be linked based on empirical data. As banning payola increases access to radio stations for smaller labels, music variety and record sales may decline, making it difficult to simultaneously gain equity and support the industry as a whole.

In this week’s seminar, scholars examine the current state of payola in the music industry and explore regulatory approaches to ending the practice.

  • In a ___ UC Irwin Law Review In the article, Duke Law Professor Christopher Bacafusco and Georgetown Law Professor Cristelia Garcia explore the current state of payola in the music streaming industry. Unlike traditional pay-for-play schemes where artists pay radio stations to play songs, modern payola uses streaming platforms, third-party playlisters, and TikTok and other social media influencers to promote music. Payments included. Buccafusco and Garcia argue that while streaming payola through curated playlists rather than radio can democratize access for independent artists, it also raises issues, particularly with ‘reverse payola’, where plates Farms demand lower royalty rates for promotion. The authors suggest careful but creative regulation — such as a low-cost lottery enabling artists to pay for streaming — to balance the pros and cons of payola.
  • Where is Payola going in the era of music streaming? Practitioner Cassie Wattlet examines the changing payola landscape in an article. New York University Annual Survey of American Law. Wautlet found that playlists act as influential endorsements as traditional radio play, and thus require continued regulation to prevent unfair practices. Payola laws need updates to address the unique challenges and opportunities of digital platforms, and to ensure a more equitable music industry, Wautlet stressed. In his view, regulatory measures should balance innovation and fairness to protect artists.
  • In a commentary by the University of Maryland Carey School of Law Journal of Business and Technology Law, recent University of Maryland Carey School of Law graduate Christine Smith Burton discusses how current fraud prevention methods are inadequate to combat payola. Burton recommends that Congress enact a law to prevent fraud in the music industry but stresses that it may prove ineffective because the existing Antipaola law fails to address the problem. Burton ultimately argues that Congress should establish the Copyright Office as an independent federal agency and give it the authority to investigate and regulate the music industry to prevent streaming fraud.
  • The lawsuit against SiriusXM highlights the fear of music artists being unfairly compensated for their work, practitioner Mark Edward Blankenship, Jr. explained in a Notre Dame Law School Journal of Legislation The article in Blankenship states that current copyright legislation does not require artists to pay royalties when AM, FM, or other terrestrial radio stations broadcast their copyrighted music. Blankenship argues that AMFA — a bill with bipartisan support — would address that disparity if it becomes law. It claims that passing the AMFA would benefit artists by respecting intellectual property rights and promoting equal compensation. For Blankenship, AMFA is a necessary step toward fostering greater respect for musicians and their art.
  • In a note Journal of International Business and Law, Yonatan Bertel of Hofstra University Maurice A. Deane School of Law advocates for Congress to pass AMFA and nationalize United States copyright law. Bertel argues that current copyright laws create an inequity between performance rights for songwriters and performers, and that AMFA requires radio stations to pay artists and producers when using their vocal recordings. Will address this through necessity. Bertel pointed out that compensation equality is important after the devastating impact of the COVID-19 pandemic on the music industry. Bertel explains that since COVID-19, artists have looked for alternative streams of income. Bertel argues that AMFA will provide revenues in the form of radio royalties.
  • In a student’s note University of Miami Law Review, practitioner Michael Newell discusses how the relatively high costs of bringing copyright claims disproportionately affect the intellectual property rights of black Americans because “copyright laws provide insufficient copyright protection to musicians of color.” protect and increase their inequality in the rest of American society.” In 2020, Congress enacted the Copyright Alternative in Small Claims Enforcement Act to address this disparity, which Newell sees as a step in the right direction. However, Neville argues that the Copyright Alternatives in Small Claims Enforcement Act may not go far enough to address the high costs of copyright litigation, and it will not remedy unfair contract practices that label labels face. Allow musicians to benefit.

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