Payola, in the American music industry, is the illegal practice of payment or other inducement by record companies for the broadcast of recordings on music radio, in which the song is presented as being part of the normal day's broadcast. Under US law, 47 U.S.C. § 317, a radio station can play a specific song in exchange for money, but this must be disclosed on the air as being sponsored airtime, and that play of the song should not be counted as a "regular airplay".
The term has come to refer to any secret payment made to cast a product in a positive light (such as obtaining positive reviews).
Some radio stations report spins of the newest and most popular songs to industry publications. The number of times the songs are played can influence the perceived popularity of a song.
The term Payola is a portmanteau from the words “pay” and “Victrola”, a trade name of early home music reproduction devices from RCA Victor. Payola has come to mean the payment of a bribe in commerce and in law to say or do a certain thing against the rules of law, but more specifically a commercial bribe. The FCC defines "Payola" as a violation of the sponsorship identification rule that recently resulted in tens of millions of dollars in fines to cable corporations in New York.
"Payola, in one form or another, is as old as the music business."  In earlier eras there wasn't much public scrutiny of the reasons songs became hits. The ad agencies which labored for NBC radio & TV show Your Hit Parade for 20 years refused to reveal the specific methods that were used to determine top hits. Attempts to create a code to stop payola were met with lukewarm appreciation by publishers.
Prosecution for payola in the 1950s was in part a reaction of the traditional music establishment against newcomers. Hit radio was a threat to the wages of song-pluggers. Radio hits also threatened old revenue streams; for example, by the middle of the 1940s, three-quarters of the records produced in America went into jukeboxes.
Alan Freed, a disc jockey and early supporter of rock and roll (and also widely credited for actually coining the term), had his career and reputation greatly harmed by a payola scandal. Dick Clark's early career was nearly derailed by a payola scandal, but he avoided trouble by selling his stake in a record company and cooperating with authorities. Attempts were made to link all payola with rock and roll music.
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