AustLit

PAYOLA

This refers to the practice of paying disc jockeys to promote a specific piece of music on their radio programs. While the term was first coined in the United States in the 1950s, the practice has been firmly embedded within the music industry for the past 150 years. In the mid-19th century in both the United States and the United Kingdom, music publishers used financial inducements to persuade performers to sing their songs and thereby encourage the sale of sheet music.

With the advent of radio, new opportunities for promotion became available. In his unpublished memoirs, Melbourne’s star radio announcer, Norman Banks, recalls that during the 1930s, he regularly brought home gifts from appreciative sponsors. Announcers were wined and dined, their cars were repaired for free, and envelopes of cash supplemented pay packets. However, Banks’ memoirs did not address the issue of whether announcers were more inclined to endorse sponsors’ products in exchange for personal gifts.

In the 1950s, the Top 40 format became established, increasing the competition for airplay and helping to give disc jockeys power over which songs would be played, making them prime targets for record companies hoping to buy success in the music charts. The American payola scandal of 1958 resulted in the conviction of several prominent disc jockeys for receiving bribes. The US Communications Act 1934 was amended, outlawing payola but permitting pay-for-play as long as the commercial arrangement was disclosed and the station received the money.

In Australia, disc jockeys such as Bob Rogers and John Laws similarly had enormous power over what music went to air. Anecdotal evidence suggests that some disc jockeys were offered inducements ranging from free records to a share of lucrative royalty payments. However, the audiences and the market were not large enough for this practice to become as entrenched as in the United States. While there were rumblings of disquiet, such as when Frank Browne’s newsletter Things I Hear fulminated about ‘FREE LOADER SUPREME’ in 1971, the industry was never investigated.

A more serious form of payola came to light in Australia in 1999, when ABC Television’s Media Watch revealed that top-rating commercial talkback radio hosts were doing their own deals, accepting money in exchange for positive comments on air. The ‘cash for comment’ affair resulted in tighter regulation of the commercial radio industry in order to ensure a clear distinction on air between comment and paid advertising.

REFs: R.H. Coase, ‘Payola in radio and television broadcasting’, Jnl of Law and Economics, 22(2), 1979, pp. 269–328; S. Homan, ‘Classic hits in a digital era: Music radio and the Australian music industry’, MIA, 123, 2007, pp. 95–108.

GAIL PHILLIPS