I'm Confused. Why Is This Illegal?

Apparently there was another payola bust.  I'm confused.  Why is this illegal?  I guess in the 1950's I might understand it, when there was only one way to listen to music anywhere outside your home.  But today there are about 20 different ways, including several flavors of radio.  If a radio station overplays the same song to the point of insanity, just listen to something else. 

Paying for placement in overcrowded distribution channels is routine in many industries and certainly not the subject of federal law.  If you don't believe me, try taking your new brand of potato chips over to Safeway and try to get on the shelf.   Now, I know folks would argue that this contributes to Safeway's selection being bland.  But that is also why new competitors, like Whole Foods, have emerged to serve folks who don't like Safeway's selection of products.

By the way, does anyone think its funny that record producers are in the news for paying for play at the same time they are in the news for charging for play?

Update:  More on charging for play:

On March 1, 2007 the US Copyright Office stunned the Internet radio
industry by releasing a ruling on performance royalty fees that are
based exclusively on the number of people tuned into an Internet radio
station, rather than on a portion of the station's revenue. They
discarded all evidence presented by webcasters about the potentially
crippling effect on the industry of such a rate structure, and
rubber-stamped the rates requested by the RIAA (Recording Industry
Association of America).

Under this royalty structure, an
Internet radio station with an average listenership of 1000 people
would owe $134,000 in royalties during 2007 -- plus $98,000 in back payments for 2006. In 2008 they would owe $171,000, and $220,000 in 2009.

One Comment

  1. BobH:

    Under certain circumstances, those supermarket slotting fees can be illegal under the Robinson-Patman and/or Sherman Acts, as constituting exclusionary dealings, when the effect is to secure so much of the space that small competitors are frozen out. It could be argued that the practices of the big music distributors are analogous to this.

    I'm not arguing one way or the other as to whether such payments should be illegal, just pointing out that they are.