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Payola in the Radio business has actually been around since the 1920’s. The word comes from a merging of the words “Pay” and “Victrola”. Victrola was a brand name gramophone product of the Victor Talking Machine Company. A gramophone was an early record player. And since we don't have "records" anymore, for the benefit of those who grew up only with CDs, a record player used a "needle" to amplify recorded grooves in circular plastic that spun underneath it. (Like a CD player only bigger, klunkier, and mechanical instead of sleek and digital.)

As radio stations began to use Victrolas to provide music for transmission, record companies soon realized that getting their songs played on the radio was very helpful in selling sheet music and more recordings. Cash was an easy way to do that – and continued to be for a long time.

By the 1950s, some popular DJs were not only given cash and gifts to promote artists and songs but sometimes were even given ownership of a portion or all of a song. Of course, this meant royalties went right into their pockets. As you can imagine, this provided quite an incentive for influential DJs to help to make those recordings popular.

According to http://www.history-of-rock.com

The first court case involving payola was in 1960. On May 9, Alan Freed was indicted for accepting $2,500 which he claimed was a token of gratitude and did not affect airplay. He paid a small fine and was released. His career faltered and in 1965 he drank himself to death.

Before [DJ] Alan Freed's indictment, payola was not illegal, however, but commercial bribery was. After the trial, the anti-payola statute was passed under which payola became a misdemeanor, penalty by up to $10,000 in fines and one year in prison.

In the 1970s especially, it was prevalent for record reps to use popular drugs like cocaine to ply DJs and decision makers at radio stations in order to get airplay for songs.

Payola has even taken the form of providing prostitutes to radio personalities, Program Directors, and other important station personnel.

More recently it has taken the form of “promotional” items like “Fly Away” prizes for contests where the tabs for hotels, airfare, and concert tickets are picked up by the record company so a station can hold a contest for its listeners without putting up the money for the prize.

On July 25 of this year, New York Attorney General Eliot Spitzer announced an agreement to halt pervasive "pay-for-play" in the music industry. Under the agreement, SONY BMG MUSIC ENTERTAINMENT agreed to stop making payments and providing expensive gifts to radio stations and their employees in return for "airplay" for the company's songs.

So you see, the music companies have continued to offer a cookie jar close enough for Radio to reach into. Or maybe it's more like the record companies have never stopped throwing goodies at radio people.

But, oddly, Payola is only Payola when a radio station accepts payments, gifts or other compensation for airing a song but DOESN’T tell the listener it is doing so.

According to the F.C.C.:

When a broadcast licensee has received or been promised payment for the airing of program material, then, at the time of the airing, the station must disclose that fact and identify who paid for or promised to pay for the material.

Any broadcast station employee who has accepted or agreed to accept payment for the airing of program material, or the person making or promising to make the payment, must disclose this information to the station prior to the airing of the program.

For instance: a record company gives a station $1,000 to play a song 10 times a day for at least two weeks. If the station announced prior to the airing of the song that it had accepted money to play the song the audience was about to hear, no problem!

It’s only when stations don’t disclose payments they run into legal problems. Of course, stations don’t want you to think they’re playing songs because the record company is paying them. Radio stations want you to think they’re playing songs because YOU want to hear them. That’s why you’d be hard-pressed to find a radio station airing a disclosure in front of a particular song it received payment or compensation to air.

“Pay-for-Play”, “Payola”, "Bribery", or whatever you want to call it, has had a relationship with Radio practically since Radio had a relationship with listeners. The latest disclosures from Attorney General Spitzer’s office can only reinforce the disenchantment of some radio listeners who feel many radio stations provide little variety, music repetition, and unresponsive attitudes.

Is it any wonder the technologies of mp3 players, Podcasting, Satellite Radio, Streaming Internet Radio, radio on cell phones have been embraced so quickly by the public?

Music companies will probably always try to influence radio stations to play songs. But, for the first time since Radio first captured the imagination of millions, the masses now have their own “Pay-for-Play” technology: an iPod, CD burners, and downloads.

...And there's no amount of money in the world a music company can pay anyone else that will force you to hear anything on your own mp3 player you don't want to.