Payola vs. Product Placement

[Fly320s]

Payola: "Payola" is a contraction of the words "pay" and"Victrola" (LP record player), and entered the English language via the record business. The first court case involving payola was in 1960. On May 9, Alan Freed was indicted for accepting $2,500 which he claimed was a token of gratitude and did not affect airplay. He paid a small fine and was released. His career faltered and in 1965 he drank himself to death.

Before Alan Freed's indictment, payola was not illegal, however, but commercial bribery was. After the trial, the anti-payola statute was passed under which payola became a misdemeanor, penalty by up to $10,000 in fines and one year in prison.

source: www.history-of-rock.com/payola.htm

Product Placement: Product placement (PPL) is a promotional tactic used by marketers in which a real commercial product is used in fictional or non-fictional media, and the presence of the product is a result of an economic exchange.

source: http://en.wikipedia.org/wiki/Product_placement

If Sony Music company pays a radio station to play Sony's songs more than other songs that's Payola and it's illegal.  But if Sony Electronics company pays the MGM movie company to feature Sony's products in the latest movie that is product placement and is legal.

In both cases company A is paying company B to feature A's products.

Why is one legal and the other not, other than just dumb law?  Is there a reason behind the laws that I'm not seeing that would make it sensible?  Are the payola laws a direct result of the growth of radio after and during the emergence of rock and roll (that evil music)?  Is product placement exempt because advertising has been around longer than rock music?

Just curious really.

[Art Eatman]

You're right.  The payola laws made sense, at the time.

Product placement?  Grocery stores, whether independent or chain, have long gotten some form of bribery/kickback/discount for giving Coke more shelf space or a better location than A&W or Pepsi.  Or vice versa.

The movies?  Well, it's open competition between companies, I guess.

I guess the difference is the issue of the public "airwaves" of radio versus the private property of films and stores. 

Art

[griz]

IANAL!!

I think it's because in the movie they say "song provided by Sony".  If they said "this song brought to you by the good people at Sony" when they play it on the radio, I think it would be legal.

Did I mention that I'm not a lawyer?

[Monkeyleg]

It's called advertising. Get your company's name out there wherever you can.

Does anyone think that NASCAR drivers put all of the various brands' stickers on their cars for free?

How much is Tiger Woods payed to wear a hat with a certain company's logo on it?

Here in Milwaukee, Harley Davidson gets tons of free advertising, since about one out of ten people have the company name tattooed on the arm.

[Guest]

Neither one should be illegal - then or now.  Privatizing the airwaves would be a step in the right direction to solving the puzzle. The various (non-skipping) frequencies in a given area could be condsidered the property of first users.

 Remember when the feds paid networks to sneak anti-drug storylines into sitcoms? 

[Perd Hapley]

Remember when the feds paid networks to sneak anti-drug storylines into sitcoms? 

In all sincerity, I'm not sure why that would be a bad thing, other than making the sitcoms a little forced and cheesy.  Oh, wait, they already are.

[danny]

I worked in broadcasting for many years.  Payola is illegal if done in secret.  If the radio station does a disclaimer anouncing that choice and placement of some songs is decided on the basis of payment from the promoter,  it's legal.  Obviously this wouldn't sit well with the listeners and it's not done.
Also,  the recipient of this "bribe" would have to claim it as income.

[Guest]

Remember when the feds paid networks to sneak anti-drug storylines into sitcoms? 

In all sincerity, I'm not sure why that would be a bad thing, ...

 In all sincerity?  I don't want my tax money used to promote ideas with which I disagree.

[BakerMikeRomeo]

The "payola" law sounds enormously stupid to me. Can anyone give a legitimate reason for making it illegal for someone to give me money to pump their stuff through the airwaves at six point two jiggawatts? Who gives a crap? If you don't like listening to the music Sweet Sweet Monies Incorporated pays me to play, change the channel or build your own damn radio station.

~GnSx

[brimic]

Payola laws make about as much sense as campaign finance reform.