Payola is Back - And Old Media Is Trying to Become New
Entering into the "Dark Forest Theory of the Internet".
Two interesting stories caught my attention this last week.
The first is from The Quietus—Tiktoking in the Freed World: Social Media’s New Payola Scandal.
Payola has always existed in some form or another in the media landscape, even if it’s a crime. While it made headlines in the 50s when radio star Alan Freed became the big scapegoat for the practice, it’s not like it ever went away. Paying money to have your art praised, profiled and played as if the ‘influencer’ in question genuinely likes it and is giving an authentic recommendation is, of course, something people usually do not appreciate. But yet record companies have constantly found ways to play the game, and I’m convinced it takes place on some level in book publishing as well.
Both major and independent record companies have been playing the game with social media. Labels get social media influencers to give sneak previews of a track in various forms, rave about it and talk about it. As per The Quietus:
Sometimes, these influencers are fans already and are just happy to be associated with a favourite act or get sent bundles of merchandise and VIP gig tickets. More often than not, however, there is a commercial transaction taking place, with the giveaway “#ad” or “#promoted” hashtags appearing in a blizzard of other hashtags in the hope no one really notices. The argument runs that this is just a different form of advertising. Everything is out in the open. Everyone knows what is happening. Everything is golden.
It should come as no surprise that the practice moved over to social media. But as Eamonn Forde from the Quietus continues to uncover, two things are happening. The first is that the recording industry has largely pivoted to singles over albums, much like it used to function in the 50s. I found this an interesting observation and worth thinking about. The second is that social media payola looks like it might move into a significantly more insidious form this year. As per Forde at The Quietus:
I was at a music business conference recently and there was a moment where the air was sharply sucked out of my lungs. A representative of an agency working with social media “creators” said 2025 was going to be the year they were going to do things differently as “promotional partners” for record companies and recording artists.
How they presented it had chilling echoes of how Freed conducted himself in his most hubristic years. While there has been much talk about how streaming is a rerun of the 1950s where the single is the record business’s centre of gravity, this shameless 50s cosplay feels a bit too on the nose.
Instead of just asking for a fee to promote a track on their channels, these social media names were also going to request master points on tracks they were promoting. This is something they feel they are owed.
What that means is a certain percentage of royalties from the song is paid to the influencer for the promotion. Naturally, that makes the influencer more motivated to give the track more airtime or to get more creative with how they promote it (“organically” and “authentically”). However, that percentage of royalties comes out of the artists share, not the record labels'. And it’s basically in perpetuity.
Producer Rick Beato has spoken quite a bit about how this works, and how everyone in the production of music has frequently taken royalties (always from the artists’ share). Producers have frequently gotten their own share of royalties (although some, such as Steve Albini (Nirvana - In Utero), as The Quietus unpacks, refused to get a royalty). Back in the 80s and 90s, there were also ‘producer managers’ who would essentially get a producer a gig with a record label, and then take royalties for making the connection. To help everyone make more money, producers would also then charge an additional charge to the record company for equipment used in their studio. So in other words, not only would they charge for the time used in the studio, but they would add an hourly charge for the actual equipment too, even if the equipment was old. That’s double-dipping. This was all the idea of the producer manager who would increase his cut.
It’s a fascinating video to watch (and includes some info on Payola).
Old Media Becoming New
In a rather obscure way, this leads me to highlight the second story I found interesting this week. This one is from one of my favorites, Ted Gioia: Old Media Finally Wakes Up From a Coma.
Gioia quotes CNN’s chief executive:
“If we do not follow the audiences to the new platforms with real conviction and scale, our future prospects will not be good.”
How are they doing this? Well, it seems CNN and The New York Times are moving into Joe Rogan-style podcasting: informal conversations with people who have vastly different views.
Gioia notes how this kind of podcasting takes on such a different form to the legacy media. In posture, it’s sit-down rather than stand up. It’s a conversation rather than just a one-sided interview. It’s spontaneous rather than scripted, and offhand jokes and off-the-cuff comments are encouraged. This is what people are looking for these days and the old media guard has (finally) noticed and relented, especially as their numbers in no way even compare to the numbers independent journalists and podcasters are pulling in these days. Literally, Substackers (admittedly, a select few) and big podcasters get exponentially more views than traditional media right now.
Like the old school, big-time labels moved into social media and brought payola along with them, corrupting the “authentic” and “organic” nature of social media (which nowadays is anything but), we can expect podcasting to go down the same road. Traditional media is moving aggressively into the space. Once they realize, however, that it’s not just the format but also the voices that make all the difference (people trust Rogan more than they trust Anderson Cooper from CNN), you can bet they’ll look to co-opt these voices, or engage in some way (like payola) to bring them around. Like with blogging, they’ll snap these voices up and incorporate them into their corporate machine, just like how Universal Music Group (UMG) continue to buy up independent labels and slowly, over time, they lose their edge.
The Dark Forest Theory
This all does serve to show that people are hungry for independent voices, music, writing, outside of the old guard that has become increasingly irrelevant. The old corporates finally noticing this shift tells us something: culture is shifting.
But I think it’s not going to shift quite like they expect.
Social media already got corrupted, and A.I. increases the corruption. New and emerging things will happen that most of us don’t expect.
The “Dark Forest Theory of the Internet” is the idea that people will increasingly relocate to spaces on the internet that are invite-only and private, away from spam bots, A.I., and all the shouting and opportunists. I’ve just recently discovered this term and am still doing research, but it sounds to me kind-of like what I meant by the “scene” in an article a few weeks ago. People want to be part of something underground and exciting, and they’ll retreat to internet spaces to find it (this is much like the internet was in its beginning days).
But where can one truly go away from all these things? What would be the most “dark forest” of them all?
The answer, I think: print magazines.
Small-print indie magazines that cover very niche topics; that function as part of an underground “scene”.
What could be more exciting these days than something disconnected from the noise online that you share with a select group of friends in your “scene”? Something only a select few know and are invited to be part of?
And along with this I think may come an interesting shift back to independent radio—formatted very much like radio used to be.
Music desperately needs this. Streaming is being gamed by the same forces above. What was old may become new again.
I don’t think we’ll see all this happen just yet, but I think the seeds may be getting planted for it. And I will leave you with that thought.