Who Really Owns Promotional CDs?
from the and-who-can-sell-them? dept
In my collection of CDs (and, yes, I still buy CDs), there's a relatively large number of "promotional" CDs -- many of which were purchased at independent record shops or online. It's not uncommon at all to find such CDs for sale, despite warning labels that say that cannot be sold. I've often wondered how enforceable that claim is, and we may soon find out. Universal Music claimed copyright infringement against a guy who was selling promotional CDs on eBay and eBay took down the auctions. The EFF is now suing Universal Music, claiming that it's a misuse of copyright law under the first sale doctrine (which says, like with any traditional good, you have the right to resell a digital good). Universal Music's response is that the CDs are actually still the property of the record label, and merely licensed to whoever received it. Of course, that could open up a ton of legal questions about ownership of certain goods -- especially if the receiving party never agreed to the deal. In the meantime, though, it's yet another case that highlights the blurring lines of ownership over tangible goods as makers of such goods try to make them more like digital goods.
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Filed Under: promotional cds
Companies: ebay, eff, universal music
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Best Medicine
Now I'm going to have a bunch of "No Parking (except for Joe)" signs to place on the street in front of my house, so I still have a place to park when the people across the street decide to invite over every person they know.
Not to mention, I opened up a dictionary the other day and found out, to my dismay, that it says quite clearly that the book can not be recreated, in whole or in part, without permission from the publisher... but.. were I to send a letter asking permissison, I'd have to have permission!!
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Re:
Also newspapers or magazines distribute promotional CDs.
BTW, it's strange that they make a fuss out of this. It's free promotion! Why are the media corporations so dead against free promotion?
One other strange thing in this discussion is this:
with CD-sales, you hear media corporations say: "You buy the disc and a licence to the music on that disc".
Now, they seem to say "You only have a licence to said disc, and nothing more"... I find that incredibly hard to believe.
First sale doctrine also applies to free goodies everywhere, so also on discs.
If those media companies would give me a pen or a lanyard or a key chain for promotional purposes. I can then sell that to a collector.
It's exactly the same thing.
So why should it be different for discs?
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The rightholders are never payed for the promotion
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so...
I'm just waiting for the study that shows how many millions of dollars "promotional CD" sales are costing the industry. Maybe the solution is to quit distributing promotional CDs?
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rightholders never paid?
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Am I Going To Jail?
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Re: The rightholders are never payed for the promo
People seem to have an odd sense that when it comes to music, that the creators (or really the labels... creators don't get money for a lot of crap) have to get a cut of every single transaction that occurs. This is simply not the case.
Give us a good reason why the creator not getting paid means the people can't sell the CD. You can't use it to justify itself.
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What?!
p.s. I've thrown out a bunch of promotional CD's over my lifetime and where I live I pay per trashcan I have picked up. So since I'm disposing of the record companies property they can send me $3 to cover my costs to dispose of their property.
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Ok folks pay attention.
Sooner or later the morons at the studios will simply start keying these CD's to individual recipients. Once they find a CD in the wild and match it to where it originated from they will cut that company off from promo materials forever. A costly mistake.
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Don't pay attention, give it away.
For whom? Is the promotional CD helping the record label, or the person they give it to for free? Is the secondhand sale of a few promotional CDs more costly than the amount saved from free publicity? I'd venture a guess that it isn't.
Record Labels just want absolute control over the music so they can continue to make themselves a necessary part of the process.
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This is dumb
Anyway, if a fan really wants a cd they will pay anything for it. The cds I buy are in the RCA catalog, so it's a collection! Promotional cds are given RCA numbers, so why can't I add to my collection if someone is willing to sell the cd to me?
Alienating your fans and burning bridges with radio stations is a bad way to do business.
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Did he sign a license agreement?
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Pick the right spot in the chain to blame
You can't really blame the guy selling the CD's because most likely he came into possesion of them via a legal means. ( contest winner or like Mike said purchased at a local store )
Who you can blame are the radio stations and other media who are given these items. You don't have to be a rocket scientist or a deacon in your church to have the intellgiance or moral compass to know that the CD's are for promotional use only. They aren't for your personal gain, or even for your personal enjoyment, as a broadcaster or journalist you agree that if you get these free promotional items that your going to play the music promotion game, and promote them via reviews or air play.
If your not ok with that as a broadcaster or journalist, then don't promote them. Tell the record labels you don't want the free preview samples. Your media outlet can then just wait till the items are commercially availible and purchase the CDs and then do with them as they please.
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The REAL story.... Written from a label guy...
By marking CD as Promotions and "Not for Sale" the label can take a tax break on them. They're considered advertising to some degree, and not potential income. They can take those as a loss, but still gain the benefit of the exposure.
The artist actually has to PAY for those CDs, as is stated in their contracts as "Free Goods". It is considered a business expense.
If the Label were to GIVE the CDs away, there would be different tax implications, so by marking them as the property of the label, and returnable upon request, they retain this benefit.
So legally, they ARE the property of the record label. Cry all you want, bitch all you want, but it's been that way since the beginning of recorded music.
This is an OLD story, written by someone with no knowledge of how the music industry works (as is typical these days, and so sad... )
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This is really nothing new. In the first days of radio, the DJs were given Vinyl records instead of the shellac records that the public would buy in the stores. That's how the labels new they were the promotional copies. The Vinyl wouldn't break when you were rough with it (which made it better for multiple plays, and DJ handling), whereas the shellac would shatter easily. Eventually, the public got a hold the Vinyl records, and demand grew for a product that was more durable, so Vinyl was made available to the public.
Then the record companies started using plain white sleeves and labels on the 45s to identify them as promotional copies. Some labels (including mine) even made the record a completely different color so they could easily identify the promotional copies.
Promotional copies are NOT supposed to be given away by radio stations! They are supplied with a large quantity of FREE, REGULAR CDS. The promo copies are for air play only.
This has changed slightly for each format that has come along, but the business practice has always been the same.
MAYBE WE SHOULD DEMAND MORE OF OUR WRITERS!
PERHAPS THEY SHOULD DO A LITTLE RESEARCH BEFORE TRYING TO STIR UP USELESS CONFLICT!
If something is MINE, you CAN'T sell it! Period.
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Well, I need to go do some work. Today I'm uploading several Platinum albums to iTunes so consumers can buy some of the best music ever made (Johnny Cash, and several others of that caliber), at a DRAMATICALLY reduced quality, for tons less then the music is worth.
Gotta love the music biz.
Don't forget to support your local music scene!
Peace,
James
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....wait WHO'S crying and bitching??? pretty sure its the bitches at Universal doing that and barely putting a dent in said "problem". keep pushing us and keep watching your sales.....mmmmm....drop!
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Good for EFF I hope they win their lawsuit
I had a CD up for sale that didn't have the word demo or promotional stamped anywhere on it. Within a day, Ebay had taken down my auction, citing a complaint from the holder of the copyright.
I responded to the link they offered, directing me to the 'rightful owner' of the CD, and I received in answer the most arrogant email I've ever been sent. It was from the legal department, and the idiot typed in ALL CAPS. 'WE ARE SORRY THAT YOU HAVE A MUSIC CD THAT YOU BOUGHT AND ARE NOW 'STUCK' WITH. NEXT TIME YOU WON'T SELL PRODUCTS THAT ARE MARKED AS DEMO ONLY, NOT FOR RESALE.'
I never said I was stuck with the CD, only politely inquired how they could expect me to know this was supposed to be a demo when there were no markings at all, on the CD, on the case, or on the cardboard inserts. Nothing. Of course, the 'legal department' never answered me back on this. So I just threw the CD into the trash, where it probably belonged in the first place.
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MS Action Pack
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Legality of a Hole Punch
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Re: The REAL story.... Written from a label guy...
Promotional CDs are marked as such for many reasons, and none of these have been mentioned in this article or the comments...
We know WHY promotional CDs are marked as such. But just because they're marked that way for a reason doesn't mean that it gives the labels made up legal rights.
Also, it's nice of you to explain the tax loopholes that the labels are exploiting with these CDs, but again, that doesn't change the way the law works.
So legally, they ARE the property of the record label. Cry all you want, bitch all you want, but it's been that way since the beginning of recorded music.
The funny thing is that this is actually for the courts to decide, not you. You see, especially when it comes to copyright, just because the copyright holder *wants* something to be true, it doesn't mean it is true. In fact, that's what we've pointed out here on numerous occasions. Copyright holders seem to believe that copyright infers certain rights which it does not.
In this case, just because the label declares they still own the CD, despite giving it away, it doesn't mean they really do own the CD. That's what the lawsuit is about, and you simply declaring it one way doesn't make it so.
This is an OLD story, written by someone with no knowledge of how the music industry works (as is typical these days, and so sad... )
Yes, it's such an OLD story that it's about a lawsuit that was filed this week. As for accusing me of having no knowledge, you are free to think that (incorrectly, but that's fine), but it would help if you actually had your facts straight about the law and economics. You do not appear to, so it may be a sort of pot/kettle situation.
If something is MINE, you CAN'T sell it! Period.
I like how you brush aside the facts. The problem here (and the whole reason for the lawsuit) is that while you may claim something is yours, it's not at all clear that it really is yours. That's the key point in this lawsuit. In giving away that CD, while you still claim it's yours, the law may disagree.
at a DRAMATICALLY reduced quality, for tons less then the music is worth.
Funny how you accuse me of not understanding the business, and then write this statement, which suggests you're clinging to an obsolete view of how the recording industry (not the music industry) actually works. I'd also suggest you learn the concept of supply and demand.
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Re: Legality of a Hole Punch
As far as I know, and I've only been a music and book dealer for the last eight years, there's no problem with selling an item that has a hole punch or a mark through the barcode. I always disclose this fact to my buyers and have never once had a problem with an unhappy customer.
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Re: The rightholders are never payed for the promo
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analogy anyone?
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Re: The rightholders are never payed for the promo
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Re: Ok folks pay attention.
whether or not the CD was sold/purchased has nothing to do with who owns it...plenty of things change ownership without any currency being involved
what makes is a promotional CD? Not the content, even if it is different, nor the fact that no money is asked for it. The only indicative element is the record company proclaiming it a promotional CD...
Bottom line: record companies give CDs, identical or different from the actual release, away for free hoping this will get the music played (in case of radio stations and others) and/or promoted in different ways (free publicity when for example newspapers give away those promotional CDs).
Whether or not I bought a CD or a company gives it to me for free does not change the rights I have. They can print whatever they want on those sleeves, if they give the CD to me, without entering into a specific contract with me, they can print on the sleeves whatever they want, it's not legally binding...they can claim all they want about what rights they give to or withhold from me, that doesn't make it legally true
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Physical vs IP
The car maker would provide a car to the magazine for them to review. The magazine would then have the right to use the car, and produce articles, and photos of the car.
At no time though did the ownership of that car change hands. Those cars are then eventually picked back up by the car maker. No magazine editors took those cars to used car lots, and the magazine didn't have monthly sweepstakes to give them away.
So what's different about the record process?
a. The record label while claiming ownership of the physical and IP of the CD's fail to treat the items as "loaned" assets, thus creating a unspoken idea that the CDs are given to the broadcasters and journalist.
b. The value of the CD is small. The CD value is probably not much more then $10. It's hard for a broadcaster or journalist to feel that allowing a $10 item pass through their hands to someone else does any damage when your talking about an industry that generates billions of dollars.
But again, accountability comes back to the media outlet and record label. The record label has to have a contractual understanding with the media outlet in regards to the proper handling of those items. If the assets leave the media outlet in violation of that contractual understanding, then the enforcement needs to happen between the label and the media outlet.
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Federal Laws Pertaining to Unordered Merchandise.
> A company sends you a gift in the mail--a ball point pen, a key chain, a tie. But you didn't order it. What do you do? If you are the type of person this company is looking for, you may feel guilty about accepting the item without paying for it. Don't feel guilty! It's yours, and you are under no obligation to pay anything.
http://www.usps.com/postalinspectors/fraud/merch.htm
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The Federal Trade Commission says ("A Business Guide to the Federal Trade Commission’s MAIL OR TELEPHONE ORDER MERCHANDISE RULE"):
> Unordered Merchandise
>
> Whether or not the Rule is involved, in any approval or other sale you must obtain the customer’s prior express agreement to receive the merchandise. Otherwise the merchandise may be treated as unordered merchandise. It is unlawful to:
>
> 1. Send any merchandise by any means without the express request of the recipient (unless the merchandise is clearly identified as a gift, free sample, or the like); or,
> 2. Try to obtain payment for or the return of the unordered merchandise.
>
> Merchants who ship unordered merchandise with knowledge that it is unlawful to do so can be subject to civil penalties of up to $11,000 per violation. Moreover, customers who receive unordered merchandise are legally entitled to treat the merchandise as a gift. Using the U.S. mails to ship unordered merchandise also violates the Postal laws.
http://blogs.mercurynews.com/consumeractionline/2006/07/unsolicited_mer.html
http://www.ft c.gov/bcp/conline/pubs/buspubs/mailorder.shtm
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How many multiples of $11,000 do you reckon Universal Music owes Uncle Sam? And that's just the civil penalties. Those CD's had better have been free gifts, or else some record company executives are looking at serious jail time.
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The label's desperation is showing!
All that "deal" meant, in reality, was that the underpaid record store clerks would just take all the promo cds down the street to a nearby store that DID buy promo copies. This was a small but important source of additional income for lots of poor folks who were into music (being "into music" and "poor" seems to go hand in hand in many cases). Many of the music writers at the alternative newsweekly and papers/magazines about town (also broke) would unload their promos in this way to make a few extra bucks. Occasionally you would receive an "unmarked" promo, which could be worth a whole dollar or two more!
Of course, it was often a mad dash to get down to that store with your promo copy FIRST, because frequently whatever crappy band/artist the big label was trying to push would end up with multiple promos littering the used cd bins. If you were the third person to arrive with you copy of the new (insert shitty major-label act here) cd, suddenly it wouldn't be enough to buy a taco. I often wondered why anybody would pay full price for one of these crap cds when you could pick up a promo copy at the used cd shop for a third the cost.
It's funny, but the general opinion of most of the folks involved (record store clerks, music writers, etc.) was that anything that the major labels were pushing was PURE CRAP. We never even listened to these cds, but just snatched them up to sell them immediately, and used that cash to buy GOOD records. Most of these crappy major label acts did not sell, and each worthless promo copy represented the TENS OF THOUSANDS of dollars wasted on a band that was now back to waiting tables. And the indie-label records we would buy instead were probably recorded in a weekend and cost a fraction of the amount the majors wasted on lowest-common-denominator bullshit that didn't sell.
Now, fast forward a few years, and the public has finally wised up and NOBODY is buying these crappy major label cds. Sales are in a free-fall. I'm glad I don't work in a record store anymore. I can't wait for the major labels to collapse.
I miss record shops, though. Searching for new music online is alienating and depressing.
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Re: Don't pay attention, give it away.
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Re: Physical vs IP
When's the last time a car company dropped of a box of 100 identical cars to be reviewed?
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Re: Don't pay attention, give it away.
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So WHAT do you do with PROMO cds?
Also, I keep hearing about the companies going after Ebay folks, but I see promo cds listed on Half.com sometimes and Amazon. Do the companies go after those people too?
So what do you guys do with PROMO cds you don't want?
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Re: The REAL story.... Written from a label guy...
Fortunately, others have shared these CDs on the internet in full, lossless quality, for free, so that people can have this wonderful music without being ripped off by poor quality iTunes files and arrogant assholes like yourself. I enjoy being part of the process that will end your career.
Gotta love the music biz.
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Making a CD to give as a gift
Can I do that without any illegal issues?
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Re: So WHAT do you do with PROMO cds?
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Re: Re: Physical vs IP
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Re: Re: Re: Physical vs IP
Consumer Reports is the exception to the rule. They do pay -- but almost every other car review involves the company giving out a tester.
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Automobile Reviewing.
Consumer Reports is in a class by itself, of course. Otherwise, the Wall Street Journal is about the only major media outlet which can insist that its reporters keep their fingers clean, forbidding them to accept bribes or freebies. A lot of the informal sanctions at a typical paper don't apply to automobile reporters. The automobile and consumer goods reporters are axiomatically not in the running for the big prestige editorial posts, which are filled from either the city desk or the national desk. The automobile reporters are off in their own little ghetto.
The automakers are more respectable than the radio and recording industries, and they get away with more stuff over the long term.
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My Uncle once said...
It is evident that no one in the music industry cares about providing people the music anymore, but rather making as much money as possible and squeezing out every last dollar from all possible consumers. And in the mean time, they slap all these laws and regulations onto the products so that they are rendered "useless". All this business of Copy Protection and no re-selling indubitably shows how paranoid the industry is about the whole idea of lending and sharing (or as they call it, "piracy"), and how they want to control everything that you do with the CD.
It's all about being able to guarantee money in the pockets of the music label managers, producers and artists, regardless of whether the consumer is p*ssed off or not with their product.
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BUYING PROMOTIONAL CD'S
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Re: Am I Going To Jail?
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