What with all the hassle of being the first major to admit to payola, then all those rumours of tension in the board room, and then the whole 'rootkit' debacle, SonyBMG will presumably be pleased to hear that the spotlight has turned to the Warner Music Group this morning.
Yep, Edgar Bronfman Jnr's major has become has become the second record company to reach a settlement with New York attorney general Eliot Spitzer over payola allegations. As previously reported, Spitzer's team last year began investigating promotional techniques employed by the major record companies which, they claim, violate the strict American rules governing the provision of incentives to radio stations in order get airtime for a label's artists. SonyBMG admitted some of its promotional activities were wrong back in July, committing to stop such activity and agreeing to pay a fine for past violations. Warner Music yesterday made a similar admission and commitment.
Spitzer told reporters yesterday: "Warner is the second major player in the music industry to come forward and acknowledge that these practices are wrong. Unfortunately, other companies continue to engage in them. I applaud Warner's decision to halt this conduct, cooperate fully with my office and adopt new business practices."
In a statement, Warner Music told reporters: "We were pleased to work cooperatively with the Attorney General in resolving these promotion issues. The reforms we have agreed to with the Attorney General are consistent with the internal reforms that our new management team implemented earlier this year. We consider this to have been a valuable process. From our perspective, radio cannot be too consumer-driven. The music that people hear on the radio always should represent the highest quality the industry has to offer."
According to Spitzer's team, among the payola-style incentives provided to radio stations by Warner were premium prizes for listeners, gifts to radio programmers (including free travel, electronics and tickets to major music and sports events) and the use of independent promotions companies to mask the passing of payments to radio stations. In its commitment to Spitzer, Warner has said it will ensure all such activities stop immediately. As a fine for past activity, they will provide $5 million to not-for-profit organisations in New York which run music education projects.