Can a reviled -- and illegal -- radio industry practice actually be the salvation for webcasters? Ad man Doug Perlson thinks so. The CEO of online radio ad agency TargetSpot says online radio needs to embrace payola if it is to survive controversial performance royalty rates. The resulting "pay for play" system, he writes, could help save the music industry in general, in a piece posted Monday on Silicon Valley Insider.

Payola has long been derided as a negative influence, and thanks to U.S.C. § 317, it's against the law for over-the-air radio stations. If a station wants to play a song in exchange for payment, they are supposed to disclose it to their listeners. However, the practice continues, as independent promoters funnel money from labels to stations in return for getting songs played over the air.

Perlson argues that internet radio stations can and should start accepting payola in return for playing certain songs, whereas terrestrial radio stations should not. He claims their exemption from performance royalties (for now, anyway) amounts to a sort of payola already, even though it does not affect which songs are played. Because internet radio stations pay the rates, he says, they should play songs in return for money to defray that additional cost.

Granted, webcasters could use the cash. In response to the rates, many innovative music webcasters, Pandora among them, are contemplating closing shop for good. The answer, says Perlson, is not the introduction of audio ads into these services, as was suggested by SoundExchange head Jon Simson.

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Hat tip: Digital Copyright Canada

In other words, "We need corruption that screws over consumers to fight corruption that is screwing over consumers!"

Stupid.