GORDON ON A2IM'S "HISTORIC" PACT WITH RADIO

How will it be determined who qualifies as an independent?
That’s the million-dollar question. You can look at it in many ways. In the most basic sense, you’re not a major if you’re not owned or controlled by a major label. Or your marketshare is being reported as part of the independent sector. The terms “independent” and “major” exist because they’re not each other.

What about a label that’s distributed by a major?
Distribution has nothing to do with it. In the U.S. marketplace, quite frankly, the independent sector is dependent on the majors. If you look at ADA, RED, Caroline or Fontana, those are indie distributors owned by the majors. The market dictates that you have to go to a major to distribute your music. It turns out to be a clever move on the part of the major distributors to help their flow of product. We are a vibrant sector. To survive in terms of your economics, you need to have a parent to carry it.

How will you parcel out the 8,400 half-hours to the indies?
The idea is that the independent sector and the major commercial radio groups wanted to find a way to work together as opposed to, “Yeah, we’ll do that someday.” We are looking for ways to quantify what that number means. This is a healthy start. This is a way to begin to form a relationship to see how we can share our resources and help each other. We can freshen up their business, and they can help us in terms of exposure. In the end, the listener wins, because he’s going to get more exciting, relevant and localized radio. The radio groups must be commended for having such forward thinking. In a time of adversity, as opposed to pointing fingers, we’re embracing each other.

How will you avoid being ghettoized into certain hours?
In principle and in terms of our understanding, the effective times are between 6 a.m. and midnight. This is meant to be an active relationship. Although it’s a private arrangement and not a government regulation, this is the free market coming together to correct itself and move forward. We don’t want to do that by burying our music. That would be counterproductive to the good faith spirit in which we’re working with one another.

Will the individual stations have to indicate when their “indie” hours are, or will selections be interspersed throughout the day?
The programming blocks, in principle, are dedicated to independent music. You need to work within the local formats and local programming strategies. We look at the block programming as an easy way to make a statement about independent music. If it turns out the stations would rather sprinkle selections through their programming day, we’re going to show flexibility. This is not being regulated by the FCC... They have nothing to do with this.

So it’s just coincidental that these two announcements have been made at the same time?
Maybe that has to be clarified. The radio groups were definitely encouraged to do this by the FCC. The FCC is making a statement about past behavior by assessing these fines. We’re coming in at the present and moving towards the future. Our communities are embracing each other to restart and create a healthy environment for the independents to work with commercial radio.

So this was not a condition of the FCC settlement?
No, this is a private agreement. The timing works out that way, but we are doing this on a voluntary basis. We are not a regulatory body. We are a trade association. When the issue of payola came up back in June, and [N.Y. Attorney General] Eliot Spitzer assessed the fines against the labels, we approached the FCC and asked what they were going to do about radio. And they invited us down to Washington. We were very pleased and kind of shocked that they would come to a trade association to create some sort of productive dialogue. At the end of the day, the FCC is there to encourage the free market and the growth of radio, to support local programming and better business practices. We weren’t named in the Spitzer investigation; we were kind of a safe harbor, just there to do the right things for the right reasons. We’re a very good group to begin negotiating with and to our pleasure, shock and amazement, the radio groups were very open and very much wanted to engage in a dialogue to make the relationship better, stronger and richer. And that went on until we finally struck an agreement that we could both live with. We wanted to go beyond nice and easy formalities and memorialize a working partnership.

Isn’t designating a block of time and giving that airplay a monetary value a form of legitimized payola?
Payola is the exchange of money and/or property for airplay that has not been declared. This is a voluntary declaration of two working segments looking to cooperate with each other in a free-market enterprise to create a healthier environment and a stronger community. It’s a very different approach than bags of money in the back alley.

Do the independent labels need this to be able to compete on an even playing field?
Absolutely. I think some of the independents already do quite well at commercial radio, but the rest of us can’t even put commercial radio in our marketing plans. It’s impenetrable. We can’t do it. We can’t afford it. We don’t have access. We don’t have that dialogue. And if we represent 30% of the market, meaning one out of every three buyers is an independent music buyer, imagine what we could do if we actually had airplay rotation on commercial radio? It would blow up in our community. We’ve had a glass ceiling that we’ve been trying to crack through. This is historic in that it opens a window which was previously shut and hermetically sealed to us.