Why can’t we all just get along? Okay, let’s get right to the punch line… the government is taking all the fun out of record promotion. Plain and simple! Just when labels thought it was safe to promote directly to radio, along comes an investigation by the New York State Attorney General’s office of epic proportions. The investigation picked up steam early this year, altering a relationship that had already been dramatically reshaped in the preceding twelve to fifteen months by the radio and music industries distancing themselves from independent promotion firms.

Major radio groups said then, and are still saying now, ‘we discontinued our relationships with independent promo firms to suspend any appearance of impropriety.’ How could record labels continue the use of indies (in the same fashion) when some of the larger radio groups essentially forbade the relationship? They couldn’t. Not to the extent that it was as meaningful as it was in the past. Meaningful to the extent of paying large annual fees for the rights to have radio’s music adds announced by the representing indie of a specific radio station or radio group.

As indies drifted from the scene of record promotion these last two years, label execs became much more hands on with radio relationships. They were literally forced to, but this was not a bad thing. Most promotion departments have always worked closely with radio anyway. But now, promo rep to promo rep, local to local, national to national, all had to tighten their respective holds on radio because there was no longer a safety net on Tuesday afternoons.

It must be stated for the record that most music execs do not want to see indies disappear. They did, however, want to see the system that was draining their promo budgets eradicated. After all, the indie corporate arrangement of its day (from the label’s perspective) was a flawed system from inception. But, labels did not want to see honest relationships that legitimately existed between indies and stations dry up. But some of those relationships would. It was now strict policy. It must also be stated for the record that indie firms still exist where permitted by radio, with most of the work being retainer oriented.

Last fall, out of nowhere, an investigation parachuted down on the record industry. At first there were rumors and quiet whispers about a pending investigation. Then as we rung in 2005, along came a dose of reality. The rumors turned into fact. There was indeed an investigation into record industry practices. The man leading the charge was New York State Attorney General Eliot Spitzer. The same man who took big bites out of the insurance industry, Wall Street and the mutual fund industry. Spitzer’s modus operandi is to discipline big business… investigate, find wrongdoing, levy big fines and enact sweeping policy changes within the targeted industry. It’s not about litigation. It’s all about the investigation, the threats, the restitution and the headlines. It’s one helluva power play to diffuse for any industry, especially given the high tech nature of the AG’s investigation. Head for the hard drives.

So where has it left the music business? All record promotion investigations in the past were typically met head on by independent promo firms. That’s where the rubber hit the road with promotion and where the emphasis on promo practices was traditionally placed. This current/ongoing investigation took a different course. With the indies profile largely mitigated, label reps became the first line of defense. I’m not here to rehash what has already been uncovered and reported (ad nauseam) as a result of the investigation, but the net effect promises to change an industry forever.

Due in part to this investigation, and considering the FCC implications, radio has reinforced their commitment to clean living, and many broadcast companies have instituted new policies regarding relationships with their partner record industry. Several of these new policies have label execs scratching their heads. It’s all about the boundaries and what constitutes fair and legal play, and what is suspicious. It appears that the fair and legal play doctrine is shrinking practically every week. Conversations with record execs reveal that they are both perplexed and angered by the new rules. Many in the record biz feel the industry was unfairly persecuted and wished it would be fairly prosecuted. Many feel their practices are defensible, that they are indeed fair and within the boundaries of the law. They also feel they are quite similar to marketing and promotion practices in several other industries, specifically, industries that affect product placement in just about every retail store you enter, not to mention the courting the pharmaceutical firms engage with the medical profession when pushing new medications. Some record execs feel there’s been an uncontested and sweeping concession of any and all changes to promotion practices, rendering their profession limited at best and somewhat non-competitive.

We are in times of drastic change, practically quarter-year to quarter-year. Both music industry and broadcast execs alike are unanimous in this sentiment. Each industry has their own set of extraneous concerns that affect their core assets in competitive ways. This challenge is the natural order of life in corporate America today. Especially when you are in the business of entertaining, providing content and attempting to pace pop culture. The marriage of compelling content and technologically driven delivery systems is not for the faint of heart. You can’t continue to chase your future. You have to ultimately grow and evolve your business model.

The radio industry is currently confronting the issues of the day on their terms and has become competitively proactive in their vision path design. The record industry has displayed an attitude of defiance and aggressiveness regarding their respective challenges as well, and is devising strategies that break down traditional paradigms. But, the prevailing notion of the day is that the record industry would like more of an even playing field when it comes to defending the turf that has played such a prominent role in breaking and establishing so many artists over the years. Not to mention a profession that many people have dedicated their careers to. However, they just may never get their day in court.

Fred Deane is the current CEO of FMQB and Executive Producer of FMQB Productions, producing a series of nationally syndicated radio specials. With an educational background in Economics and Law, Fred’s background includes key executive positions in Business Affairs, Marketing and Promotion with the EMI and PolyGram Groups of companies. fdeane@fmqb.com