The Federal Communications Commission (FCC) and the Communications Act of 1934 [20] both have strict requirements and rules regarding the issue of Payola. Both the FCC and the Act demand that “employees of broadcast stations, program producers, program suppliers and others who, in exchange for airing material, have accepted or agreed to receive payments, services or other valuable consideration must disclose this fact. Disclosure of compensation provides broadcasters the information they need to let their audiences know if material was paid for, and by whom.” But even with these requirements in place, big-time record companies have found loopholes to continue the practice legally.
The reason why record companies have managed to find relatively big loopholes in an otherwise complex and strict document is because of the wording. According to the current regulations in place, it is still considered legal to pay to play a particular song on the radio. The only hitch is that the broadcaster has to reveal who paid. In addition, the disclosures must be from DJ to station manager to program director and upwards. The loose wording has created a deadly loophole that makes it easier for wealthy record company officials to pay the DJs large sums of money to play certain songs a certain number of times at a given time during the day. The loophole has created a “grey market, one in which shady, quasi-legal deals take place, and independent artists lose out more often than not.” [21]
The loophole has made it sure that independent artists will isolated from mainstream media. And a current example of this is the lengths Macklemore and Ryan Lewis went to to get their music heard. Because Lewis and Macklemore belonged to an independent label, they feared payola laws would interfere with their airtime. So they “hired an independent arm of Warner Music Group, the Alternative Distribution Alliance (ADA), which helps independent acts get their stuff on radio. Zach Quillen, manager of Macklemore and Ryan Lewis, discussed how “they paid the alliance a flat monthly fee to help promote the album.” [22]
One side effect of the vagueness of the law and the creation of the loophole is the expansion of the concept at the hands of online music sharing websites. In 2009, the website Jango created a plan to do payola legally by saying they have been paid to play the songs. “For as little as $30, a band can buy 1,000 plays on the music-streaming service, slotted in between established artists The artists themselves choose what other music they'd like to be played next to.” [23]
Another side effect with payola is that it isn’t just limited to the music industry anymore.. The TV industry has engaged in a form of payola with interviews. Networks deny paying for interviews, but are willing to pay large sums of money in cases that garner a lot of attention. An example is the Casey Anthony case in 2011. It was reported that ABC news paid Anthony around $200,000 for personal photographs. [24]