Payola

Alan Freed

January 25, 1960: The National Association of Broadcasters issues punishments for those involved in the payola scandal. The American music industry is governed by a set of laws including 47 U.S.C. § 317 which covers specifics for sponsored airtime. According to law, record companies are permitted to pay radio stations to give airtime to specific recordings but only if the sponsorship is identified. They may not pay disk jockeys themselves. If songs are played for monetary consideration and not advertised as such, a crime is committed. Payola is the term for the money secretly paid.

Alan Freed, a rock and roll supporter and DJ, along with Dick Clark, perpetual teenager, were both affected by the payola scandal, along with many others. Some propose that playing records on the radio is advertising for the LP or CD in itself. It is permissible to pay for billboard space and print ads. It is thought that payments given directly to the DJ will permit an uneven playing field where one song or record company will get an unfair advantage and greater airtime.

Payola isn’t just for rock and roll or even radio. Claims have been made stating forms of payola have existed since vaudeville in the 1920s. However, the 1950s saw a special convergence of circumstances. Radio went to Top 40 formats because television took over drama and comedy entertainment. Teens had expendable cash and the new 45 RPM records were cheap and easy to buy. Rock and roll was emerging and what a great way for teens to rebel against Big Band parents. But what was the “best” record to buy? The one with the most radio airtime, of course.

The punishment set forth for the crime of receiving payment for airtime was set at $500 and one year in prison. Some DJs admitted receiving tens of thousands of dollars. The Federal Communications Commission and Federal Trade Commission began investigating. Alan Freed, who coined the term “rock and roll,” was arrested and pleaded guilty. He lost his show and was blacklisted. He was fined, but not imprisoned. He died broke and bitter in 1965. Dick Clark was castigated but managed to survive his day in court by selling off his interests in several record companies. With so many of today’s radio stations owned by huge conglomerates, the practice of payola is no longer as plausible. Maybe.

It’s not easy. Payola is something that is not readily identified because it can take so many forms. – Brian Schmidt

I believe this payola scandal may represent the most widespread and flagrant violation of any FCC rules in the history of American broadcasting, … Mr. Spitzer’s office has collected a mountain of evidence on the potentially illegal promotion practices of not only Sony BMG, but also other major record companies, independent promoters and several of the largest radio station groups. – Jonathan Adelstein

I don’t set trends. I just find out what they are and exploit them. – Dick Clark

More than any other man, he brought us rock ‘n’ roll. – Paul Ackerman, about Alan Freed

Also on this day:

Moscow University – In 1755, Moscow University was established.
Rebellion – Shays’s Rebellion attacked an arsenal.
First Winter Olympics – In 1924, International Winter Sports Week opens in Chamonix, France.