Music executives who thought the holiday season would temporarily deter FCC Commissioner Mike O’Rielly‘s interest in a recently announced payola probe are mistaken if his latest comments are anything to judge by.
As we reported here, the last two months have seen O’Rielly lead an investigation into the industry’s reportedly ‘rampant and unlawful practice’ of payola (also known as ‘pay for play’). First calling on help from the Recording Industry Association of America, their unsatisfactory response to his formal inquiry led him to seek answers from the labels themselves.
As information continues to be collected there, he’s now turning his attention to streaming platforms. Find out why inside:
Recently speaking to the Massachusetts Broadcasters Association, O’Rielly stated:
“Once again, we see a legacy regulation remaining in place for broadcasters that other substitute services are not required to abide by,” he said. “It should not be lost on me or anyone else observing the industry that this is another area where the cutting edge high-technology companies operate without similar restrictions.”
Simply put: the rules that enforce anti-payola practices at radio predate the advent of streaming services. As such, platforms like Spotify, Pandora, Apple Music, and more are not legally required to comply with the FCC’s payola rules as they were established specifically for radio. Currently unregulated (for all intents and purposes), there are few legal repercussions for those services furnishing inflated figures of song or album plays. Said inflation could not only be putting cash in the pockets of people who run the platforms, but also awarding artists and labels undue awards and recognition.
“I’ll be asking for feedback on what processes record labels have in place to prevent payola and their structure for responding if evidence shows the need to do so,” he said. “There are some legitimate questions involving fairness, competitive effects, industry trends, and the like generated by accusations of payola,” he said, adding, “It is not necessarily a victimless crime.”