Royalties proposed for booming used market as new-CD sales stagnate.

June 14, 2002 7:12 PM

Royalties proposed for booming used market as new-CD sales stagnate. (Via Slashdot). First sale doctrine, anyone? Section 109 of the Copyright Act, 17 U.S.C. 109, permits the owner of a particular copy or phonorecord lawfully made under title 17 to sell or otherwise dispose of possession of that copy or phonorecord without the authority of the copyright owner, notwithstanding the copyright owner's exclusive right of distribution under 17 U.S.C. 106(3). Commonly referred to as the ``first sale doctrine,'' this provision permits such activities as the sale of used books. The first sale doctrine is subject to limitations that permit a copyright owner to prevent the unauthorized commercial rental of computer programs and sound recordings.
posted by Bezuhin (23 comments total)

I wonder if there are actual guidelines to this sort of thing, or is it the pricnciple that decides? Surely someone could complain if this teacher always used boys in her math problems. Would such a complaint hold ground? As for the pimps, well junior high is bit young to be advocating free speach here, but if she was a high school teacher, say grade 11, I would totally be behind her if she was disciplined.
posted by ( .)(. ) at 7:28 PM on June 14, 2002

In this instance I think the law is pretty clear and established-- the first sale doctrine a fairly important aspect of U.S. copyright law (then again, the same could be said of fair use before the DMCA's anti-circumvention provisions).

If some type of royalty program were created, what sort of precedence would create for the used book market? The whole idea is a big slippery slope.
posted by dicaxpuella at 7:41 PM on June 14, 2002

A percentage charged at every transfer is not a royalty, it's a tax. I doubt first sale will be easily circumvented, but if anyone was going to try it would be the music industry.
posted by Nothing at 8:01 PM on June 14, 2002

They will take my used bookstore from me when they pry it from my cold dead fingers.
posted by John Smallberries at 8:27 PM on June 14, 2002

Yeah, copyright law would need to be changed to allow this. Further, the First Sale Doctrine was introduced in a 1908 case as the law by a Supreme Court ruling, and not into law until the 1909 copyright revision. In any case, the Record Industry sounds pretty desperate to me, huh?
posted by Kevs at 8:34 PM on June 14, 2002

Only desperate as the consumer steadily tires of the sacchrine line of cloned acts ever increasing. Until they stop thinking "If X is good, then X+1 is better, and X^10 is best!" then consumer sales are going to dwindle. Plus the gross overpricing of recorded music has done nothing to assuage the insulted masses. Generally, I don't buy CD's for one reason:

I don't see adequate entertainment for the price, and I can never find CD singles of the tracks I like. Until the recording industries can offer either cheaper recordings (making it easier to swallow the drek with the gold) or release more music I enjoy, I'm going to continue to vote with my wallet.

(Of course, I would also be happy to see the end of broadcast payola to boot...)
posted by Samizdata at 8:46 PM on June 14, 2002

Besides, the government and Supreme Court will most probably knuckle under, based on their current track record with intellectual rights cases...
posted by Samizdata at 8:48 PM on June 14, 2002

you know, the more bars the music business places to lawful consumption of their product, the more law-abiding people will decide to get their music through extra-legal avenues.

I've never downloaded an mp3, but if this law were passed, I'd be sorely tempted just on principle.
posted by rebeccablood at 10:29 PM on June 14, 2002

Didn't they already try this and fail?

Why yes, they did.
posted by delmoi at 2:57 AM on June 15, 2002

I've never downloaded an mp3, but if this law were passed, I'd be sorely tempted just on principle.

The whole thing is based on principle; different people just have different challenge threshholds.
posted by rushmc at 7:40 AM on June 15, 2002

I've never downloaded an mp3

Not even once?
posted by stavrosthewonderchicken at 7:47 AM on June 15, 2002

Here's a theory: what if a royalty on used sales went 100% to the artist/author? The publisher made their money on the first sale (cost of goods, production costs, marketing costs, etc.) but the artist/author produced what's really being consumed.

So then every time a Jane Austen used book is sold, her estate gets a little something. Every time a used Primus CD is sold, they get a little something.

Just an idea. Not really sure what I think about it. But then of course, this would never pass.
posted by billder at 9:40 AM on June 15, 2002

Not even once?

nope. never had the time or interest.

and rushmc, I reject the premise that the popularity of mp3s is based on principle; for some people, maybe, but a lot of that is just rationalization--the same way people cheat on their taxes and then make it all right for themselves by pointing out that rich people don't pay their fair share, or whatever.

people download mp3s for various reasons: to try new music, because they love the thrill of the hunt, because they absolutely hate the music industry, because it's more convenient for them to just download the song in a format that is native to their computer, because they don't want to pay for a CD to get one song, and, yes, because they now have the opportunity to get something they used to have to pay for, for free.

my 14-year-old nephew, has no principle at all in his avid burning of music he downloads from the web--to him, music is something he can't fathom paying for, because it's available at no cost if he knows where to look.
posted by rebeccablood at 10:14 AM on June 15, 2002

maybe new record sales are stagnat because record companies are only signing complete drivel, and even lame people get sick of lame shit, eventually.

for christsake, the ozzbournes family soundtrack? celine dion "A NEW DAY HAS COME"? the recent rash of alanis morrisette/sheryl crow wannabes, not to mention the new alanis and sheryl crow albums.

pure garbage.

happy consumption.
posted by Satapher at 1:16 PM on June 15, 2002

When did it become the job of our government to guarantee that a particular industry or company stays profitable? The recording industry isn't losing money. Even the recent dip in sales means that they're merely back to the profit level they were in 2000 - they still made billions! And even if they were losing money, why do they deserve legislation to fix it?

It would be different if you could prove directly that someone is taking bread out of the record companies' mouths, but the only problem the record companies have is that they aren't making as many billions as they could be making.
posted by RylandDotNet at 3:16 PM on June 15, 2002

Ryland you are right on my friend. to the maffakin Tee.
posted by Satapher at 6:12 PM on June 15, 2002

Let's do the math from the numbers in the article. Buying a new CD costs anywhere from $13 (on sale) to $18 (for an average of $15). You get $3-5 bucks when you sell them to a Used CD store, for a net total cost of $8-$15 (avg $11+), The used CD buyer puts out $8-$10 (avg $9). So the average cost of a CD's worth of music is about $10.

Now -- compare that with the move by Sony noted on MeFi on July 12...$9.99.

In my consulting practice, I tell my clients not to fool themselves into thinking that they set prices. It's that market that sets prices. Do you think that the market is starting to send a clear message about what an hour and 15 minute's worth of sound is worth?
posted by fpatrick at 7:18 PM on June 15, 2002

Jane Austin's estate wouldn't be relevant here, as all her stuff is public domain now (and will be as long as they don't keep extending copyright back further and further). You could put out your own edition of a Jane Austin novel and make a buck on it (that's the whole point of classics issued by bookstore house brands).

Until the record companies either start putting out prodcuts people care about or start charging a reasonable price for the products they do put out (good and bad), their sales are going to suck. And their sales will deserve to suck. If they'd focus their money and efforts on making better products or adjusting their business models so they can accept smaller profits rather than all this litigation, they might be making a buck or two.

As a consumer, I go to the local media outlets and see a CD that contains maybe 70 minutes worth of music that I might or might not like for $20. Right next to it, I can pick up a film I know I like (because I've already seen it at the theatre) that contains almost 90-120+ minutes of entertainment with lots of extras thrown in to add value for $15. Isn't it obvious why people aren't buying CDs?
posted by wheat at 5:26 AM on June 16, 2002

Yes -- wheat -- the CD vs DVD price comparison came to me as well, but I couldn't quite put my finger on the issue. I think you've got it.

One other thing to consider -- the success of compilation disks -- not of old stuff like Billboard Hits of 1974, but the relatively current hits compilations like the "Now That's What I Call Music" series provides access to at least what the compiler wants to share.
posted by fpatrick at 7:59 AM on June 16, 2002

Music is much more valuable than a movie, though. You can only watch a movie a handful of times over your lifetime, but you can listen to an album again and again without getting tired of it.
posted by kindall at 12:24 PM on June 16, 2002

Until the record companies either start putting out prodcuts people care about or start charging a reasonable price for the products they do put out (good and bad), their sales are going to suck. And their sales will deserve to suck.

I agree that the quality of music being put out on CD these days, by and large, is pretty sucky, but the fact is, CD sales don't suck. The recording industry made, what, $14 billion in CD sales last year? I don't have the figures in front of me, but I seem to remember the number $14 billion. That doesn't suck. And before the recession and the dot-com fiasco and September 11, sales were up something like 8% over the previous year. That doesn't suck at all. Sales are now down to the (quite respectably high) level they were in 2000. Let's all weep for the suffering record executives, shall we?
posted by RylandDotNet at 12:25 PM on June 16, 2002

fpatrick --- perhaps compilation discs are so successful is because most mainstream releases have only one or two really great tracks.
posted by nathan_teske at 2:00 PM on June 16, 2002

And because the industry, for some inexplicable reason, has destroyed the single market. Right up until the late 80s, all hit songs were available as 45 rpm singles for less than $2, and many songs that didn't hit the Hot 100 were available in that form as well. If you heard a great song on the radio, you could almost always buy it as a single, cheap.

When the vinyl market died, CD singles did not replace that niche. The price of CD singles was around $5, and the selection and availability dropped drastically. (There still are CD singles out there, but it is not at all uncommon for a hit song to not have a CD single available.)

The industry WANTS you to buy an album just to get the one or two good songs. Some albums, of course, are worth buying. But most of the time you just want the hit -- they should sell it to you, for a lot less than $5.
posted by litlnemo at 12:34 AM on June 17, 2002