Spitzer goes after the Music Industry


It must be my birthday or something: First Wal-Mart pushes for $10 CDs, and then Eliot Spitzer takes on our favorite industries: Music labels and Radio!

Eliot Spitzer is casting his eyes on the music industry, particularly its practices for influencing what songs are heard on the public airwaves.

According to several people involved, investigators in Mr. Spitzer’s office have served subpoenas on the four major record corporations – the Universal Music Group, Sony BMG Music Entertainment, the EMI Group and the Warner Music Group – seeking copies of contracts, billing records and other information detailing their ties to independent middlemen who pitch new songs to radio programmers in New York State.

The inquiry encompasses all the major radio formats and is not aiming at any individual record promoter, these people said. Mr. Spitzer and representatives for the record companies declined to comment.

We have known for quote some time that the industry is a disaster and that radio sucks. Why haven’t the music labels figured out there is a correlation between these two factors?

The quasi-payola arrangement is a fairly complicated scheme. Here’s the NY Times breakdown of it:

The major record labels have paid middlemen for decades, though the practice has long been derided as a way to skirt a federal statute – known as the payola law - outlawing bribes to radio broadcasters.

Broadcasters are prohibited from taking cash or anything of value in exchange for playing a specific song, unless they disclose the transaction to listeners. But in a practice that is common in the industry, independent promoters pay radio stations annual fees – often exceeding $100,000 – not, they say, to play specific songs, but to obtain advance copies of the stations’ playlists. The promoters then bill record labels for each new song that is played; the total tab costs the record industry tens of millions of dollars each year.

The new scrutiny comes at an inconvenient time for the major record companies, which have been pressing federal and state law enforcement officials to shut pirate CD manufacturers and the unimpeded flow of copyrighted music online.

I don’t care what this guy’s political goals are — I am now firmly a supporter. Want a check? Someone to make phone calls? Don’t matter — you got my vote!

$10 CDs, and Spitzer after the labels & radio: Happy Birthday to me!

Record Labels Said to Be Next on Spitzer List for Scrutiny
By Jeff Leeds
October 22, 2004


Category: Finance, Music

Wal-Mart Wants $10 CDs

Category: Finance, Music

It’s not a community that any party has a lock on,” says Ismael Ahmed, the executive director of Access, the biggest Arab-American social services agency in the country, which is based in Dearborn. “Especially a community like this one where 60% weren’t born here. We’re not really committed to either party.”

“We were motivated when we backed Bush and we are motivated now,” says Osama Sablini, Aapac’s chairman and publisher of the Arab American newspaper, who backed Mr Bush four years ago. “The Bush administration has been a major disappointment to this community and we cannot afford four more years of this.”
-Under siege since 9/11, Arab voters shift to Kerry

When the dust settles on this election, a significant shift will have taken place in several key demographics. Due to a random twist of fate, this will be especially true in the swing states.

The resulting shift in traditional party affiliations could very well throw the election to the challenger.

Since early this year, we’ve been watching a number of key voting blocs “flip flop” (sorry) away from their prior voting patterns. The demographic ethnic groups with the greatest potential to impact the 2004 Presdiential election are both Cubans and Hispanics in Florida, and the Arabs-Americans in the Midwest.

On numerous occasions this year, we have noted, Cuban American voters in Florida continues to be a potential problem for President Bush in the upcoming election. Further, we similarly observed that the President’s support amongst Arab American’s have tumbled, and significantly for this election, in the swing states.

Whether this is a permanent change of party affiliation, or just a reaction to the present regime, is unknown. But it is clear that major changes are taking place. So says The Guardian:

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1987 Crash Revisited

Rob Fraim is a reader of mine who puts out his own amusing comments each day via email. Today, on the 17th anniversary of the 1987 stock market crash, he put out his recollections from that day.

I found them so interesting that I suggested Rob (who is blogless) post them here. He gladly agreed. Without further adieu, here is Rob’s version of 1987 Crash Revisited

October 19 – the day that each year gives old-timers in this business a renewed facial tic and post-trauma flashbacks.

What?” you say.  “You mean you were actually there, Grandpa?  You remember the Crash of ’87?

Yes, I was, and yes I do.  Confirming rumors that I am, in fact, older than dirt I note that I was in this business in 1987 – and had been for a few years prior (I started in 1983.)

I was having dinner last week with a friend who runs a hedge fund (another graybeard, although he looks younger than me) and we ended up talking about 1987.  He had a great story about the whole thing (which I’ll let him tell you about someday if you ever get to have dinner with him.) 

So I thought I would take a moment to reflect on my own Crash Experience – and perhaps some of you will share your October 19, 1987 story (provided you’re not a whippersnapper who would be relating what was on freakin’ Sesame Street that day!  I really hate you guys.  You’re svelte and unwrinkled and smart and energetic and I’m just liable to whup you if you’re not careful.)    Maybe we’ll even get a recounting of the aforementioned dinner tale from last week.  So if you feel like it, drop me a note with your recollections.  If I get enough to make it worthwhile, perhaps I’ll compile them for sharing.)

What I Did During the War (or What Felt Like One Anway)”   or…

Dr. Strange-Broker or How I Learned to Stop Worrying and Love the Bear”  by Rob Fraim

I was 29 years old, 4 years in the business, with two young children.  I thought I had investing figured out, didn’t really, and was working for the old Dean Witter (now Morgan Stanley.)    The market had been mostly good during my relatively brief time in the business and I had survived the crucial new-guy starvation years and had built up a fairly good book.

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Category: Finance

Wall Street Positioning for Year End Rally

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Chart of the Week: Presidential Incumbent Approval Level (2001 – 2004)

Category: Finance

Pools of Ignorance

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The Bush vs. Kerry Ratio revisited

Category: Politics