Department of misnomers: Japan's Liberal Democrat Party is neither liberal nor very democratic. Saddam Hussein's Republican Guard is not full of Republicans. And in the world of radio, so-called "independent" promoters ain't hawkin' the latest Bob Log or Gravy Train CD. These wealthy individuals work as liaisons between record companies and radio programmers in what amounts to a clever way to get around charges of payola -- bribing DJs to play a company's records.
The major record companies pay these promoters, or "indies," millions of dollars annually to finagle airplay for their investments (otherwise known as artists). The indies get the songs played by forking over to the stations big chunks of record-label money, which they call "promotional expenses" to avoid the word "bribes." Trips, gift certificates, and probably the mother of all fruit baskets also change hands without a paper trail. Once an indie is locked into a particular radio station and has developed an understood "contract" with the general manager, the labels have to pay the indie upwards of $1,000 per song added if they want their music played. Since most stations add more than one hundred songs a year, that's a nice chunk of change, especially when an indie works with several stations. This has been going on for years, and Eric Boehlert's fantastic series for Salon has helped shine light on the practice.
Recently, pay-to-play has come to the attention of the US Senate, a body whose members are too out of it to understand a lot of the problems that have arisen around Internet law and propriety, but old enough to remember good ol' payola. Orrin Hatch, John McCain, and Russ Feingold all question the use of independent promoters, and the Senate Judiciary Committee launched an investigation at the beginning of this year.
Amid all the scrutiny, something weird happened. Mega-hugie bogeyman entertainment empire Clear Channel announced it would no longer work with independent promoters. "We heard Senator McCain and Senator Hatch loud and clear," Clear Channel President and COO Mark Mays said in a statement, interestingly leaving out the liberal Feingold, who opposes further consolidation of entertainment companies. "And we now recognize that these relationships may appear to be something they're not. We have zero tolerance for 'pay for play,' but want to avoid even the suggestion that such a practice takes place within our company."
The move was obviously a preemptive strategy to get out and spin the whole thing before they got officially called out, but it does accomplish a few positive things.
Michael Bracy is co-founder of the Future of Music Coalition, a nonprofit that "educates about music/technology issues" but is in essence a lefty think tank vehemently opposed to further media consolidation. To him, Clear Channel's recusal is a clear victory. "There have been a lot of people who have worked really hard to express their opinions about Clear Channel and get Washington to pay attention to this, and this is a tangible validation that the message is getting through," he says.
The second reason Bracy finds the announcement beneficial is that it pressures other big radio companies to abandon the practice, which could open the airways a tiny bit in certain cities. But most important, he says, Clear Channel's move draws attention to media consolidation, and even the Senate is listening up.
The real question is, what will take the place of indie promoters? It's not as if influence-peddling between stations and labels will disappear overnight. The Clear Channel press release is pretty vague on this: "Upon expiration of existing independent promotion contracts this summer ... Clear Channel Radio would begin working directly with the recording industry on specific groupwide contesting, promotions, and marketing opportunities. ... Eliminating these relationships with middlemen should alleviate legislators' concerns and provide opportunities for us to create better ways to market and promote music for all concerned."
Hmm. Wouldn't eliminating the middleman create a more direct link between labels and station managers, thereby encouraging more closeted pay-to-play opportunities? "That would be illegal," responds Michele Clark, a Clear Channel flak at PR company Brainerd Communicators Inc. "This just makes everything that much more straightforward."
Independent promoters contacted for this story all had a resounding "no comment," but other industry insiders offered theories as to how this will all shake out. One take is that Clear Channel knows it's a pariah in the press, and when the FCC, as expected, further lifts constraints on media ownership on June 2 (opening the door for Clear Channel to branch into other media; see "FCC's Gut Instincts," March 19), another flood of bad press will come out. By backing out of using indies, "they're just trying to get their head down and make it look like they are good guys," says one insider. "Then after June 2 they can be the target of acquisition from some even huger company, or they can go on another buying spree and get into television and everything else."
Others speculate that the less negative attention Clear Channel brings upon itself, the less chance the feds will bust them up somewhere down the line.
But maybe it's not all smoke and mirrors. After firing head radio honcho Randy Michaels -- the man who led Clear Channel into its current state of mondo media and a casualty of the proposed Feingold bill, known as the "Competition in Radio and Concert Industries Act" -- and replacing him with John Hogan, there are rumors that there is definitely a kinder, gentler sheriff in town. "Anyone who would go to work for Clear Channel is by definition suspect," says another source who requested anonymity -- what is this, Watergate? "But the book on John Hogan is that he's not supposed to be that horrible of a person. A lot of this could be Hogan saying, 'Look, we don't need this stuff. We're so big, let's really try to figure out ways that we can be perceived as better partners and not try to squeeze every dime out of these people. It's not worth the risk.'"
In truth, the money generated from indies was a pittance compared with the money Clear Channel makes in advertising and ticket revenues. It's not going to hurt the company financially to back out. But this move, combined with the three full-time lobbyists on the payroll and a fleet of billboards around the nation that say "Clear Channel Cares" could mean that troops are preparing for some sort of skirmish: D-Day, June 2.
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