For discreet promotional relationships, one need not look further in the music industry than payola. The practice of labels paying DJs to play their music ran rampant in the 50s, with one Chicago DJ paid $22,000 to play a record. A Congressional investigation led to USC 317, which prohibits radio stations from playing for pay.
This hasn’t stopped the possibility of digital payola from entering indie artists’ consciousness as a threat to their mindshare. The Future of Music Coalition, an advocacy organization for independent artists, published a piece in mid-June stating that “Consumers have no way of knowing whether recommendations and curated playlists are based on curatorial choices, or whether big money tips the scales.”
FMC points out that there are virtually no laws for disclosure with digital distribution services: “The Communications Act requires that broadcasters must disclose “if matter has been aired in exchange for money, services, or other valuable consideration,” making undisclosed payola illegal on AM/FM radio. But when it comes to online services, regulatory agencies such as the Federal Communications Commission have no jurisdiction. The Coalition also noted that the way digital music can have shades of retail mixed into its streaming business can muddy how payola laws might be applied, if at all.