PAYOLA SETTLEMENT SETS NEW SONY BMG PROMOTION GUIDELINES Lon Helton and Chuck Aly – Radio and Records R&R has obtained a copy of what appears to be the Assurance and Stipulation agreement between the office of New York State Attorney General Eliot Spitzer and Sony BMG regarding the company's recent $10 million settlement over improper radio-promotion practices. Business reforms detailed in the agreement establish concrete parameters for the label group's promotion efforts. Specifically, Sony BMG must notify airplay monitoring companies including Mediabase 24/7 (used by R&R) and Broadcast Data Systems in advance that purchased airplay — including spin programs, advertising and paid spins — is not intended for detection. For syndicated radio advertising, the company is further obligated to ensure front and back announcing of the airplay as paid for by Sony BMG.
Standards for disclosure, documentation and the use of independent promoters are also outlined. Among the stipulations: Sony BMG is prohibited from any "explicit or implicit exchange, agreement or understanding to obtain airplay or increase airplay." Further, the distribution of cash, gift cards, gift certificates or other monetary payment to radio, radio employees or contest winner is prohibited. Purchasing airplay via spin program, paid spins or advertising is not permissible for the purpose of generating spin detections.
Among the other items Sony BMG is allowed to do under the agreement is provide contests and giveaways to stations, provided they are not intended for employees or their relatives. Artist performances may be arranged for and subsidized by the company. In terms of direct interaction with radio employees, Sony BMG is restricted to activities intended solely for "familiarizing radio employees with Sony BMG music." This includes up to 20 copies of each CD, up to 20 concert tickets per year per station, modest personal gifts up to $150 per year per recipient, meals and entertainment capped at $150 per event and reasonable travel and lodging expenses to as many as 20 live performance events per station per year.
Detailed disclosure and documentation guidelines require Sony BMG to obtain letters signed by the GM, licensee, owner or an "authorized senior executive other than a member of the programming personnel of the radio station" stipulating that any giveaway will not go to station employees or their relatives, that Sony BMG's payment for the items will be announced on air, and that the station is not increasing Sony BMG airplay in return for the giveaway.
Additionally, independent promoters hired by Sony BMG will be required to sign an agreement binding them to the same guidelines facing the company's in-house promotion staffs. Also, Sony BMG is prohibited from providing anything of value to independents that is intended for a radio station, nor will it reimburse independents for items of value given to a station. Further, independents must certify in writing on a quarterly basis that they agree to continue to be bound by the guidelines set forth by the Assurance and Stipulation agreement.
Other provisions extend similar rules to Sony BMG's interaction with television: the company must hire a compliance officer, who will submit annual reports to the Sony BMG board and Spitzer's office for the next five years. The music company will also be required to establish a database of all expenditures made by Sony BMG in connection with radio. According to the agreement, the database shall "track and generate reports by radio station or radio program[s]" and "be readily searchable by the categories of expense set forth in [the agreement]." |