Guy Berger

On the relative ethics and economics of used CD sales and cd burning

155 posts in this topic

Quick thought regarding used CDs: What is really unethical is a used CD store selling promo copies (with holes through the bar-code, promo stickers on them saying, "Not for retail", etc.) because then the artist never even got credit for the first "transaction". Since the copy is a promo, it was given to a radio programmer or reviewer, etc. and the artist never saw any money from that CD.

Just a thought.

Correct me if I'm wrong, but don't "clubs" like YourMusic, BMG, etc. log the items they offer for sale as "promos" & therefore deprive the artist of royalties from sale of said items?

No stones being cast here, I'm as big of a bottom-feeder as there is, but....

That is true. BUT the artists have signed these royalties away as part of the "promotion package" in their contract.

No value judgement here.

That is the real deal? A large majority of the CDs I buy come from BMG. :unsure:

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As I said, as far as the artist/label is concerned, a single CD-R copy is less harmful than a used CD purchase. As Jim S. points out, yourmusic/BMG purchases are probably also worse than CD-R copies (though not as bad as used CD purchases).

Well, not exactly. The labels still make a piece off of the Yourmusic/BMG type sales, but the artists don't.

Again, not a problem since it's stipulated to in the contract, but in terms of the immediate distribution of funds, the artist sees the same results eitehr way. Long term, it can be argued that the monies the labels make from these type sales goes back into the company as general revenue, which in tem keeps the company profitable, blahblahblah.

Bottom line for me is thi - whatever "path" one takes in the pursuit of obtaining recorded music, just do it with your eyes open and make sure that at some point in the chain the right people get the right amount of money somehow.

Beyond that, it's a free country. Carpe diem.

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Personally, I buy used and a copy CD for and from friends, so I have no ethical problem with above. As far as I'm concerned, it's a victimless crime.

Can you honestly say to the musicians and producers who are regulars on this board that you would copy their CDs and pass them along to friends? Witthout any concern that it's robbing them of income that just might enable them to continue producing this music that we all love?

You don't have an ethical problem with that? :blink: They ARE your victims in your so-called victimless crime.

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Following up on my earlier comment about buying a CD and, part and parcel, receiving the rights to dispose of it, by sale or otherwise...

When I buy a CD, I see part of the value/price of the CD as my right to sell it. If the law said I couldn't sell it (or if there was no market), the CD would be worth less to me. (Note: not worthless, worth less.)

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As I said, as far as the artist/label is concerned, a single CD-R copy is less harmful than a used CD purchase. As Jim S. points out, yourmusic/BMG purchases are probably also worse than CD-R copies (though not as bad as used CD purchases).

Well, not exactly. The labels still make a piece off of the Yourmusic/BMG type sales, but the artists don't.

Again, not a problem since it's stipulated to in the contract, but in terms of the immediate distribution of funds, the artist sees the same results eitehr way. Long term, it can be argued that the monies the labels make from these type sales goes back into the company as general revenue, which in tem keeps the company profitable, blahblahblah.

Bottom line for me is thi - whatever "path" one takes in the pursuit of obtaining recorded music, just do it with your eyes open and make sure that at some point in the chain the right people get the right amount of money somehow.

Beyond that, it's a free country. Carpe diem.

Don't you mean caveat emptor?

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Personally, I buy used and a copy CD for and from friends, so I have no ethical problem with above. As far as I'm concerned, it's a victimless crime.

Can you honestly say to the musicians and producers who are regulars on this board that you would copy their CDs and pass them along to friends? Witthout any concern that it's robbing them of income that just might enable them to continue producing this music that we all love?

You don't have an ethical problem with that? :blink: They ARE your victims in your so-called victimless crime.

Well put.

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And truthfully, I'd have no problem whatsoever with a system being enacted which uses tracking technology to create a database of used sales, which could then be used to pay royalties at a reduced rate. The additional cost to consumers surely wouldn't be more than a few cents per item. Used is already a deal, so big whoop about a few cents more.

The lala trading service does this. They track sales/trades, and part of the fee paid for receiving a CD is a royalty payment made to the musician.

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Guy, what about the argument that by creating a copy, you are artificially boosting the supply?

For me, the issue really is that when artists sign their contracts, they understand that purchasers of their discs will have the right to re-sell them, but not the right to copy them. Having people pirate their discs isn't part of the bargain they made.

Now excuse me while I hide a few hundred cdrs under my bed before anyone around here notices.... :unsure:

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In fairness to myself, those are almost all cdrs of oop albums or live bootlegs, which I would gladly purchase legit copies of if reissued.

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Most of these arguments make no sense. When you buy a cd new, you've paid what the artist expects to get out of the sale of one cd. If you resell it, there's no expectation that he would continue to get royalties out of that particular cd.

The situation is somewhat akin to purchasing a consumer product like a car. When you buy a car, you pay the manufacturer or his representative, the dealer, for the car. He's received what he expected to get. He has no further call on additional payments after you've paid the purchase price. If you sell it, the proceeds are yours.

The only difference with cds is that you can replicate them and potentially deprive the artist out of a possible sale of a new cd. As long as you're not doing that, the artist or the record company can have no further expectation of income.

This is all a theoretical argument anyway because these are observed more in the breach; kids are continuously buying a cd, either in the brick and mortar store or iTunes and then burning and passing it onto their friends.

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Again, as in another thread, the problem is conceiving of intellectual property as exactly the same as physical property. Copying a CD is not just a physical replication of an object, but an act that effects the valuation of a piece of intellectual property. There's no reason that we HAVE to treat the two kinds of property as if they are the same, even if the physical property metaphor is the nearest to hand when we talk about it...

The problem is that in the digital age, the two rights are so obviously different and so unbound from one another that what has always been an issue obscured by other factors is now an obvious issue on its face.

We've ALWAYS been, essentially, renting intellectual property when we "purchase" it-- it just hasn't been so obvious...

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Correct me if I'm wrong, but don't "clubs" like YourMusic, BMG, etc. log the items they offer for sale as "promos" & therefore deprive the artist of royalties from sale of said items?

When I joined BMG ten years ago, I studied a website which was devoted solely to the record clubs from a consumer's point of view.

It said that the standard recording contract signed by the artists calls for the artist to receive one-half the usual royalty for discs sold by the record clubs, except that they were to receive no royalty for discs given free by the record clubs.

I take that to mean that the artists receive one-half royalty for each Your Music sale. However, when BMG offers "Buy one, get two free, then unlimited $2.99", the artist receives one-half royalty for the discs sold at $18.99 and $2.99, but the poor guys who were arbitrarily selected to be the two free CDs don't get paid anything.

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So what if I purchase the music on itunes, burn them to a CD, and then sell the CD? How is that different from the record company "burning" the CD for me before I bought it?

:w

(we really need a "Devil's advocate" smilie by the way...)

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(we really need a "Devil's advocate" smilie by the way...)

If it looked like Al Pacino chewing scenery, would that be too obscure a reference?

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Correct me if I'm wrong, but don't "clubs" like YourMusic, BMG, etc. log the items they offer for sale as "promos" & therefore deprive the artist of royalties from sale of said items?

When I joined BMG ten years ago, I studied a website which was devoted solely to the record clubs from a consumer's point of view.

It said that the standard recording contract signed by the artists calls for the artist to receive one-half the usual royalty for discs sold by the record clubs, except that they were to receive no royalty for discs given free by the record clubs.

I take that to mean that the artists receive one-half royalty for each Your Music sale. However, when BMG offers "Buy one, get two free, then unlimited $2.99", the artist receives one-half royalty for the discs sold at $18.99 and $2.99, but the poor guys who were arbitrarily selected to be the two free CDs don't get paid anything.

I've heard otherwise, but I hope you're right!

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And truthfully, I'd have no problem whatsoever with a system being enacted which uses tracking technology to create a database of used sales, which could then be used to pay royalties at a reduced rate. The additional cost to consumers surely wouldn't be more than a few cents per item. Used is already a deal, so big whoop about a few cents more.

That sounds quite daft to me, Jim. Most people live in second hand houses, but my present house is new; I paid the building firm; it paid the designer/architect. When I sell it, I want the effin' money - why should the designer/architect be paid again, and again and again and his descendants and heirs for the next one or two hundred years? (It must have been a bloke, my wife says, because he buggered up the design of the kitchen.)

MG

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(It must have been a bloke, my wife says, because he buggered up the design of the kitchen.)

MG

How so? Position a wall phone jack in such a way that the upper door on a double oven range would strike the phone when opened? I've seen that design. :mellow:

euro-ovens-EOSGSS.jpg

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I want a Reptet promo.

I actually saw a Reptet promo for sale at the store I mentioned earlier that sells promo discs.

Price:

$2.95!

I have seen one copy of the last Organissimo record for sale used as well. I don't recall if it was promo marked.

It should've had a hole through the barcode if it was a promo.

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(It must have been a bloke, my wife says, because he buggered up the design of the kitchen.)

MG

How so? Position a wall phone jack in such a way that the upper door on a double oven range would strike the phone when opened? I've seen that design. :mellow:

euro-ovens-EOSGSS.jpg

No - the kitchen in the new house is twice the size of our old one, but two people can't work in it at the same time. Everything useful, including work spaces, is crowded into a corner.

MG

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And truthfully, I'd have no problem whatsoever with a system being enacted which uses tracking technology to create a database of used sales, which could then be used to pay royalties at a reduced rate. The additional cost to consumers surely wouldn't be more than a few cents per item. Used is already a deal, so big whoop about a few cents more.

That sounds quite daft to me, Jim. Most people live in second hand houses, but my present house is new; I paid the building firm; it paid the designer/architect. When I sell it, I want the effin' money - why should the designer/architect be paid again, and again and again and his descendants and heirs for the next one or two hundred years? (It must have been a bloke, my wife says, because he buggered up the design of the kitchen.)

MG

Sounds like a bit of applying the economics of one industry to another. Designers/architects don't get paid royalties. They get what in musician's terms would be considered "session fees", renumeration for a specific job performed.

Now, if you're proposing that musician's session fees be raised to thae point where a relative handfull of jobs a year provides for a comfortable income, well hey - I'm all for that! But get ready to see a dramatic drop in the number of albums recorded and released. How many $12.50 (retail) CDs do you have to sell to create the gross of one $125,000 house? 10,000. How many non-popular CDs sell 10,000 copies? Not many. So the scale and terms of "employee" renumeration are adjusted in lines with likely revenue.

Or else, have designers/architects get paid a minimal session fee and then have them wait for a payment of the nominal percentage of the sale price. Let's see how well that one goes over. And how many building firms do 10,000 jobs a year, year after year? Not many, if any. So the scale and terms of "employee" renumeration are adjusted in lines with likely revenue.

Apples & oranges we have here, if in extremely simplified form. Each industry has an economic model which better serves its individual needs and realities. A bit of tweaking to the current system with the goal of putting a bit of extra change in the pockets of the laborers isn't necessarily daft, I would say.

Having said all that though, a system to pay reduced royalties on used sales isn't something I' m going to crusade for. It would just be a nice little something extra for the musicians who, after all, are the only ones in this game (besides the labels) who (theoretically at least) approach the enterprise as an investment (after all, what are royalties other than a return on a speculative venture?). Some artists choose to waive royalties up front in return for a larger session fee. That's their perogative, and in many cases it's a smart move. But for those who don't, hey, why not look to get a better return from your investment, especially at a minimal cost to the consumer?

Edited by JSngry

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I can never understand why these recurrent discussions about royalties mention only performers' rights but not the rights of composers or even of the copyright holders. Why obsess about one element - traditionally the least financially significant - and never discuss the others?

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Personally, I buy used and a copy CD for and from friends, so I have no ethical problem with above. As far as I'm concerned, it's a victimless crime.

Can you honestly say to the musicians and producers who are regulars on this board that you would copy their CDs and pass them along to friends? Witthout any concern that it's robbing them of income that just might enable them to continue producing this music that we all love?

You don't have an ethical problem with that? :blink: They ARE your victims in your so-called victimless crime.

There's obvious difference when one "buys local," so to speak. When you buy a CD by a local musican (or an unsigned (or unsigned by a major lable anyway) musican selling CDs on the net) you're not just buying a piece of music, but are literally "supporting the arts." You know that this musican depends on your purchase to support his music. I'll gladly pay full price for that, and do so often (I own, among other things, both Organissimo CDs). What I'm talking about is major lable artists (the Justin Timberlakes of the world) who don't depend on my purchase to make their rent. You may not recognize a difference, but I do.

Here's a question, though, to all of the musicans on the board: How WOULD you feel if I came upon one of your discs in a used store or being sold used online? Would it bother you if I bought it, or would you prefer that I buy a new copy? And if you don't mind me buying the used copy, how would burning a copy be worse? You don't get paid ether way.

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I can never understand why these recurrent discussions about royalties mention only performers' rights but not the rights of composers or even of the copyright holders. Why obsess about one element - traditionally the least financially significant - and never discuss the others?

I should think that it's implied. I know that I've mentioned "copyright holders" several times.

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I can never understand why these recurrent discussions about royalties mention only performers' rights but not the rights of composers or even of the copyright holders. Why obsess about one element - traditionally the least financially significant - and never discuss the others?

I should think that it's implied. I know that I've mentioned "copyright holders" several times.

:lol:

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I think I'll go to a USED record store or library.

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