June 27, 2004

Payola and Plugola
Posted by Jon Henke

I have to agree with Jeff Jarvis on the subject of the "scandal du jour" about CBS' potential conflict of interest, wherein they provided an Amazon link to Clinton's biography on their website, without disclosing that they will make some small profit off sales of the book when bought through their link. Jarvis calls it "the most crimson of herrings". Unfortunately, beyond that, he doesn't really explain why it's not a big deal. Instapundit, on the other hand, just doesn't seem to understand the issue at all. Neither properly state the terminology.

First, the law: Payola occurs when a broadcaster is paid--or given anything of value--for a broadcast, but does not disclose that the broadcast item has been sponsored. "Both the person making the payment and the recipient are obligated to disclose the payment so that the station may make the sponsorship identification announcement required..."

In this case, CBS was neither paid--nor alleged to have been paid--for the broadcast in question. So, payola is not in question.

Plugola, on the other hand, may be somewhat more directly related. Plugola is "the on-air promotion or "plugging" of goodsor services in which someone responsible for including the promotional materials in the broadcast has a financial interest".

An easier way to describe these is this:
Payola occurs when somebody gives you money to play a song/show/etc, without the sponsorship being mentioned.
Plugola occurs when you broadcast something of financial interest to yourself, without disclosing that interest.

Payola is a non-starter here, but plugola seems a bit closer to the mark, doesn't it? Well, not really. Or, at least, not unless the entire industry has been in ongoing violation of the plugola rules for the better part of a decade.

The fact is, this occurs every day. Reference these radio stations. It's widespread, and the fact that CBS does it with a book is neither new, nor unique. (See FoxNews channel's "What We're Reading" page, complete with Amazon sponsor links)

Not only is this not a story...it's common practice. CBS is in the clear.

UPDATE: Oliver Willis doesn't think there's much to it either, and sees VRWC leaders behind it....

UPDATE: (McQ) Two weeks ago Sean Hannity interviewed Newt Gingrich about his new book about the Civil War, "Grant Comes East". You can go here on the Hannity website to buy it. Payola or Plugola?

UPDATE (JON): RatherBiased is in high dudgeon about the whole thing, claiming it "is far from the truth" that CBS' Amazon link is similar to that of their rivals. Of course, they need to explain the literally hundreds, perhaps thousands, of radio stations that do the same...as well as the FoxNews links we've shown above. Further, RatherBiased would need to show some incidence of FCC action against this practice to credibly claim that it is actual plugola.

It seems like, at this point, they're just struggling to keep their "gotcha" on the table.



Now when CBS has people on promoting books that a sister company (or corporate relation if you prefer) published, THAT is something of a conflict of interest...

Posted by: shark at June 27, 2004 01:53 PM

Indeed, it would be. Though, I think the very newsworthy nature of the book may mitigate that a bit, it is precisely the sort of circumstance in which their association should be mentioned.

Posted by: Jon Henke at June 27, 2004 02:09 PM

So, "CBS is in the clear" because you say so, eh? Whatever gets you through the night.

The facts are these:

1. CBS aired a de facto commercial, in the form of a "60 Minutes" broadcast, for Bill Clinton's book.

2. CBS has a marketing arrangement with the Web's largest online bookseller that gives them a cut of the profits from sales of Clinton's book.

3. The CBS commercial for Clinton's book on "60 Minutes" did not mention, or even hint at, the network's financial interest in goosing sales of Bill Clinton's book.

You think that's just fine. No story here.

Thanks for such a quick demonstration of your ethics. I won't be wasting my time on this blog anymore.

Posted by: Dexter Westbrook at June 27, 2004 02:15 PM

Gee Jon ... I guess your explanation didn't fit Dexter's preconceived notions about CBS's guilt.


Posted by: McQ at June 27, 2004 02:20 PM

Somehow, I doubt Dexter was previously a reader of this blog. Fact is, if what CBS did amounts to plugola, then a large plurality, maybe majority of TV/radio stations are, or have recently, engaged in plugola already.

And since the FCC hasn't done anything about that....well, what do you suppse that means?

Finally, Dexter abuses the term "marketing arrangement". Providing a link is hardly an undisclosed marketing arrangement.

Posted by: Jon Henke at June 27, 2004 02:25 PM

Your explanation boils down to this: CBS isn't a whore because so many other broadcasters are whores.


Sorry I abused the term "marketing arrangement." Maybe "kickback" or "vigorish" would have been better.

And what's this about "a regular reader of this blog?" You mean, you have some?

Posted by: Dexter Westbrook at June 27, 2004 04:17 PM

Your explanation boils down to this: CBS isn't a whore because so many other broadcasters are whores.

- - -No, that's really not what I wrote at all. The FCC has - de facto - decided that internet links to products the station broadcasts do not constitute "plugola".

In fact, the link that CBS employs is the same arrangement many bloggers use when linking a book on Amazon.

And what's this about "a regular reader of this blog?" You mean, you have some?

- - -Yes.

Posted by: Jon Henke at June 27, 2004 04:45 PM

Lots of news programs have been airing free commercials, disguised as news, for Fahrenheit 911 too. All the local stations here in Seattle certainly did so. Socialist thinking (eg there is no truth, everything must be judged based on its political utility) seems prevelant in the media, and 'Plug-ola' for politically correct causes may be one consequence. In contrast Conservative events/authors get the silent treatment even when you would think they should be newsworthy.

Posted by: John Doe at June 27, 2004 05:14 PM

This article is partially correct but Jon is an idiot if he believe a blog is anything close to a multibillion dollar media company. The rules are not the same because a blog ain't Viacom.

Posted by: Leroy at June 27, 2004 06:08 PM

Good lord Leroy ... do you ever listen to a raido talk show in which the author of a book is interviewed? Try Sean Hannity for instance. He interviews the person, lets them plug their book and then says, "and you can go to our website to buy the book or you can pick it up through Amazon.com".

If I've heard that once, I've heard it a dozen times.

Payola or Plugola? If the latter then it is "business as usual" and nothing to get your britches in a bunch over.

Posted by: McQ at June 27, 2004 06:14 PM

Q&O That's an interesting point from McQ... Did CBS anywhere in the broadcast acknowledge their interest?

And I'm a little skeptical of the "but mom, all the cool kids do it" argument. All that could mean is that either the regulators are falling down on the job, the law needs to be specifically amended, or modifications to acceptable promotional formats (a printed disclaimer?) need to be implemented.

Posted by: richard mcenroe at June 27, 2004 07:32 PM

Did CBS ever acknowldge what interest? If Hannity hadn't said anything but still had the book on the website would it make any difference ethically?

Look, the point here isn't "all the cool kids do it", it the selective outrage. Why wasn't the same fit pitched when Hannity did it?

Just because you and I aren't particularly fond of Bill Clinton or CBS doesn't mean they've done something horribly wrong when they do the same thing many others on both sides have been doing for ages.

If it bothers you, then by all means, push for it to be shut down ... for everyone.

Posted by: McQ at June 27, 2004 07:38 PM

The reason I point to the fact that other stations do it - radio and TV - is that it makes it apparent that it is not considered a violation by the FCC.

And, I would argue, that is correct. First, because the revenue accrued from these links are negligible, to the point of vanishing. Second, because the *broadcast* does not solicit sales, or advocate the purchase of said item...it provides information about it - in much the same way that a radio station merely plays a song. That you can buy it through their website does not constitute "plugola".

Why do I get the impression that a great deal of the righteous anger here has a lot more to do with the fact that it was Clinton, than the potential minor violation of FCC rules?

Posted by: Jon Henke at June 27, 2004 07:48 PM

Because that answer is the one that fits your worldview best, Jon.

It simply can't be that people who disagree with you honestly think this is a case of plugola, they must simply be mindless Clinton-bashers.


Posted by: Ryan Waxx at June 27, 2004 09:13 PM

Or it could be you're a world champion conclusion jumper.

Might want to read the blog a bit before taking another leap.

Posted by: McQ at June 27, 2004 09:37 PM

The reason that this is somewhat unique is that CBS aired a 60 minute (or so) commercial for the book in the form of the TV show by that name, and then set itself up to benefit for each book sold.

Pretty much most of the time when you see a commercial for a book or movie disguised as a TV show, the TV network is not making any side money on the book or movie - just the money for the advertising for the show. This differs because of the contract with amazon.com for a commission on books sold.

Posted by: Bruce Hayden at June 28, 2004 12:42 AM

Because that answer is the one that fits your worldview best, Jon.

- - -If, by that, you mean that I support liberal/Democrats, the answer is a definitive no. As McQ writes, you're making a bit of an uninformed leap.

The reason that this is somewhat unique is that CBS aired a 60 minute (or so) commercial for the book in the form of the TV show by that name...

- - -But it wasn't a commercial. I mean, you may regard it as a commercial, because it centered on the book, but it simply wasn't a commercial. It was a program.

And the "contract" with Amazon is the same sort of thing you and I can do with links to Amazon products. It's not a private arrangement.

Further, it's been pretty industry-standard for a long time now. Clearly, the FCC has seen nothing wrong with it.

Posted by: Jon Henke at June 28, 2004 05:08 AM

if noone had a financial or political stake in this book we would have never heard of it

Posted by: kevin at June 28, 2004 10:13 PM

I thought Conservatives were for less government interference in our lives, but they really seem to be getting on the "violates the FCC" bandwagon lately. With their boy in the White House, they seem A-OK with the government controlling more and more: scientific research (or lack thereof), restricting more of our civil liberties (rights to assembly and protest, right to face your accuser, right to a lawyer, right to free speech . . . ), no-bid contracts, etc.
And do they realise how ridiculous they look acting as if no one would have bought Clinton's book if he hadn't gone on "60 Minutes" or that the show only had him as a guest to boost those "huge" Amazon associate profits? Will they have the same complaint in four years when Dubya goes on TV to promote his book?

Posted by: Charles at June 30, 2004 05:37 AM