From Payola to Blogola to Pandola?

Montgomery and Moe showed that it would be efficient for labels to pay for airplay (Montgomery & Moe, 2002). This is not surprising given the impact airplay can have on sales, at least in the old music industry (Dertouzos, 2008). However, direct undisclosed payments to influence radio programming (called Payola, a combination of pay and Victrola) are prohibited by law. Hence, labels developed strategies to circumvent the law by using independent promoters or naming payments “consultant fees”.

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