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Payola is a commercial bribe paid to someone who agrees to engage in promotion for a product or service. While it is legal to pay for promotion, the payment must be disclosed to make it clear that a promotion is being sponsored. If this disclosure is not made, the promotion may be considered illegal. The concept of payola originated in the record industry, and has since expanded to include commercial bribes in general.
In the music world, popularity of music is determined in part by the air play it gets on radio stations. This is used to compile statistics, and can also lead to increased sales for individual artists and records. In the early days of radio, it was extremely common to pay for play, with record companies offering bonuses to radio stations in exchanging for playing certain songs more often. This built to a head in the 1950s and 1960s, and there were a number of payola scandals, sometimes involving large fines for parties convicted of accepting bribes.
Any time a person in a position of influence accepts a payment for promotion and doesn't disclose that payment, it can be considered a form of payola. Government agencies like the Federal Communications Commission in the United States are charged with setting and enforcing rules surrounding promotion and advertising, and can investigate and take action when they suspect payola may be involved. In cases where the payments are clearly disclosed, the situation is legal and no regulatory steps need to be taken.
Some record companies have found ways to get around payola laws, such as using third party promotional tools to get radio stations airing specific songs more often. This sometimes skirts the line of legality. For up-and-coming artists who lack the clout of record company backing, this practice may be a topic of debate and dispute, as they may argue it places them in an unfair position. People who don't have the connections and ability to get around payola laws may find their albums getting less air play. This can reduce sales, make it harder to get bookings for live events, and otherwise interfere with the development of a career.
People who suspect bribery of a particular individual or entity like a radio station can report it to regulators. It helps to provide supporting information so regulators can thoroughly investigate the situation and make a determination on whether to move forward with a court case to assess fines and other penalties.