Spotify lets users create radio stations based on artists and songs. It looks like breeding ground for promotion, but so far, companies deny it.
For discreet promotional relationships, one need not look further in the music industry than payola. The practice of labels paying DJs to play their music ran rampant in the 50s, with one Chicago DJ paid $22,000 to play a record. A Congressional investigation led to USC 317, which prohibits radio stations from playing for pay.
For years after, radio stations and labels tried to work around the law using independent promoters and intermediaries. But in the mid-2000s, New York state attorney general Eliot Spitzer sued several labels for continuing the practice using this loophole. Universal Music Group, Sony, and Water all settled out of court for millions of dollars, while EMI is still under investigation.
Four major radio companies including Clear Channel also settled over investigations from the FCC over the loophole in 2007, for a total $12.5 million in fines and an agreement to not participate in payola and give a certain number of hours of airtime to independent labels.
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