Listen (3:17)
May 19, 2025
Alan Freed, a pioneering radio disc jockey widely cited as popularizing the term "rock and roll," emerged as the central figure in the notorious payola scandal of the late 1950s and early 1960s. Payola denotes the illicit practice where record companies compensate radio DJs for playing specific songs without disclosing such payments.
Freed's difficulties began when he declined to sign an affidavit asserting that he had never accepted payola, which resulted in his dismissal from WABC in 1959. This refusal and his candid acknowledgment of having a financial interest in certain music he played rendered him a principal target for investigators.
Sixty-five years ago today, May 19, 1960, Freed was indicted on 26 counts of commercial bribery in New York. He was accused of accepting over $30,000 in bribes from record companies. He ultimately pleaded guilty to two counts, which resulted in a $300 fine and a six-month suspended sentence.
By 1964, a federal grand jury indicted Freed for tax evasion, alleging that he failed to report $56,652 in income between 1957 and 1959, most of which was purportedly derived from payola sources. He was consequently ordered to pay $37,920 in back taxes. He died, impoverished and largely forgotten, in 1965.
In an April 2021 Rolling Stone op-ed, the Artist Rights Alliance described Spotify’s Discovery Mode as "payola," labeling it "exploitative," "unfair," and a “money grab." They highlighted the possibility that the royalty cut could be “so steep that working artists and independent labels cannot even afford to pay it, clearing the field for major record labels and pop megastars to swallow up even more of the streaming pie." The group asserted that the primary victims would be “working artists, independent labels, and above all music fans looking to expand and diversify their listening.”
In June 2021, the United States House Judiciary Committee warned Spotify co-founder Daniel Ek that the feature might create a “race to the bottom," pressuring artists to accept lower royalties to gain visibility. They also asked the following questions:
“Would the pilot become permanent? What safeguards would protect artists from Discovery Mode boosts potentially cancelling each other out? How would the ‘promotional’ royalty rate be calculated, and would it be the same for everyone? How could artists and labels measure the program's success on their streams? How would royalties be returned to artists if participation failed to increase streams?”
Sixty-five years after Freed’s indictment and nearly four years after inquiries from the U.S. House Judiciary and other governmental entities, the only fundamental difference seems to be a simple transmutation: pay to play becomes pay to be playlisted. Unfortunately, the listeners looking for something new and different suffer the most from this. Many people don't realize that their subscription fees go to a tech company, not a music company, with no interest in expanding the listening experience they have conditioned users to expect.