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

[Guy Berger]

I had an odd thought in a discussion about the ethics and economics of used CD sales and CD burning.

Generally we think of buying used CDs as a more ethically sound behavior than burning copies of CDs.

When you think of the economics, things reverse. A person burning a CD copy (and paying presumably $1 or whatever for the price of the blank) is less likely to be willing to pay the full price of the new CD than the person buying a used CD (and paying, say, 50% of the list price). In other words, a single used CD sale is more likely to be "income foregone" for the artist/label than a single CD-R copy.

Guy

[Tom Storer]

I fail to see what's remotely ethically unsound about buying a second-hand CD in any case.

[WD45]

The person getting the burned copy might be so taken with the album that they would go out and buy a new copy.

That would put money in the artist's pocket [hopefully], whereas the buyer of the used disc did not. Especially if that used disc was a promo!

This has been a grey area of interest to me for some time...

[Aggie87]

I agree with Tom on this.

Regarding a used cd, royalties were paid to whomever had them coming. Ownership of that copy merely changed hands, and money was made by the seller.

Making a CDR creates a copy of the music for which no royalties have been paid to anyone - it's theft.

edit - I'm referring to "normal" copies of CDs, not promos as mentioned by WD45.

Edited November 1, 2006 by Aggie87

[Eric]

For whatever it's worth, I generally buy used CDs and I realize that nothing is going to the artist. I don't feel that is unethical, but it is shortsighted in the grand scheme of things. If it is a living artist or someone who is making a go of it themselves (our hosts for example), I will usually pay up for the new copy.

[BeBop]

When someone purchases a CD (or car or book or...) he or she also obtains the right to dispose of that item by gift or sale (presuming no contract or other agreement prohibit or inhibits). The creator gets compensated at this point and is not party to future transactions. (Just as GM doesn't get additional payment when you resell your Corvette.) Additing a broker (record store) to future transactions doesn't change anything.

[Alexander]

But as I mentioned on the other board, buying a used CD and receiving a copy of said CD amounts to the same amount of compensation to the artist: $0. If that is the case, then what harm is it really to make a copy and give it to a friend? If that same friend bought a used copy of the CD in question, the artist would not be one penny the richer for it. On the other hand, most people regard burns as being less "real" than a commercial copy of a CD (I know I do). Listening to the burn may well inspire a sale, which the purchase of the used CD will not (since you already have a commercial copy).

This situation is made still more grey when the practice of LEGAL downloading (as in the case of eMusic or iTunes) is introduced. When I purchase a CD through iTunes, there is no physical object that comes into my possession. Rather, I have purchased files that are downloaded to my computer. If I choose to put those files on my iPod, then there will be two copies of the same album. I can lend my iPod to my wife, for example, and still listen to the music on my hard-drive. Two copies, but only once sale price. This is further complicated when I burn a CD of the music I legally purchased. iTunes, in fact, allows me to burn up to five copies of purchased music (although there are obviously ways around that). Now, once again, I have only paid once, but I can have up to SEVEN copies of the music in circulation (the files on my hard-drive, the files on my iPod, and as many as FIVE CD copies).

[WD45]

There is always a bit of buyers remorse that fights with the ultra-thrifty side of me in the record store. I usually buy used in the brick-n-mortar stores, and some of the time those are promo discs.

One used store in town will not buy obviously marked promo items. I'll give them props for that. One of the other places will pretty much buy anything. Missing discs, artwork -- no matter!

[Chas]

  Guy said:

Generally we think of buying used CDs as a more ethically sound behavior than burning copies of CDs.

When you think of the economics, things reverse. A person burning a CD copy (and paying presumably $1 or whatever for the price of the blank) is less likely to be willing to pay the full price of the new CD than the person buying a used CD (and paying, say, 50% of the list price). In other words, a single used CD sale is more likely to be "income foregone" for the artist/label than a single CD-R copy.

Guy

How can one impute an intent to someone absent some consideration of opportunity . How does one know that someone who burns a CDR wouldn't have purchased a used copy at a store or online if given the opportunity ?

As noted , commodity fetishism in the form of wanting to own a commercial copy is still with us , of course the question is for how much longer . Now excuse me while I go fondle my LPs ....

[Chuck Nessa]

  Chas said:

How can one impute an intent to someone absent some consideration of opportunity . How does one know that someone who burns a CDR wouldn't have purchased a used copy at a store or online if given the opportunity ?

As noted , commodity fetishism in the form of wanting to own a commercial copy is still with us , of course the question is for how much longer . Now excuse me while I go fondle my LPs ....

[Jim Alfredson]

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.

[Claude]

What about the ethics of listening to radio for free and not buying all the songs that were played? The radio stations only pay a ridiculous amount to the rightholders. Think about the money the artists would make if every music that is being heard had to be paid at the price of a new CD. They would all be rich and we would have to stuff our ears if we wanted to have money left to eat.

Seriously, with iTunes and other purchased music downloads there is no more used marked. You can spend thousands of $$$ on downloads (which cost almost as much as CDs) but you don't have the right to sell them if you don't want them anymore. Is that fair? It's as if you had only rented the music, but at the cost of a purchase.

Edited November 2, 2006 by Claude

[Quincy]

  Guy said:

A person burning a CD copy (and paying presumably $1 or whatever for the price of the blank) is less likely to be willing to pay the full price of the new CD than the person buying a used CD (and paying, say, 50% of the list price). In other words, a single used CD sale is more likely to be "income foregone" for the artist/label than a single CD-R copy.

Guy, how long have you been on this board? You're completely forgetting that no one buys a title just once. The used purchase, which probably got in the bins as a "victim of upgrading" is just the first step in owning this title. The buyer of the used disc will buy again once a higher bitrate remaster comes out, and buy again when a bonus track is added. Whereas the person who made a CDR probably forgets what version he has, and thus it's a dead end.

Edited November 2, 2006 by Quincy

[Chuck Nessa]

  Jim Alfredson said:

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.

I have few problems with the stores selling promos. I have a huge problem with the recipients of promos selling them! I have dealt with this before on the board.

[Son-of-a-Weizen]

I want a Reptet promo.

[Chuck Nessa]

  Son-of-a-Weizen said:

I want a Reptet promo.

Wanna buy mine?

Edited November 2, 2006 by Chuck Nessa

[JSngry]

The thing about buying used is that there's enough money changing hands that it allows for the possibilty that the brick-and-mortar might be able to stay in business, which in turn creates an opprtunity for the "social" aspects of music buying such as impulse purchases (which may well include non-used items), surprise discoveries, bumping into somebody who hips you to something new. meeting hot chicks who get horny when they see you with an armload full of OJCs, you know, all that good stuff that keeps the juice flowing.

All in all, a fair enough trade-off in the macro-economics of the macro-industry, I think.

[JSngry]

  Jim Alfredson said:

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....

[Chuck Nessa]

  JSngry said:

  Jim Alfredson said:

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.

[Jazzmoose]

I honestly cannot understand how anyone can compare burning a disc to buying used. I really can't. If you buy a CD, you can do anything you want with that copy. Give it as a gift, throw it away, and yes, even sell it if you decide you don't want it. How is this in any way morally objectionable? It's YOUR friggin' CD!!!

[Son-of-a-Weizen]

  Chuck Nessa said:

  Son-of-a-Weizen said:

I want a Reptet promo.

Wanna buy mine?

Buy? No.

...but I'll trade ya for my copy of this

[Alexander]

  Jazzmoose said:

I honestly cannot understand how anyone can compare burning a disc to buying used. I really can't. If you buy a CD, you can do anything you want with that copy. Give it as a gift, throw it away, and yes, even sell it if you decide you don't want it. How is this in any way morally objectionable? It's YOUR friggin' CD!!!

But according to the copy-right laws, while the CD belongs to you, the music does not. The music belongs to the copy-right holders. Try selling a blank CD. Nobody's going to want it. It's not the CD the potential buyer wants, but the music contained therein. On-line stores like iTunes and eMusic sell music that exists purely as information. The idea is that because the copy-right holder is getting something out of the sale, it's kosher for them to sell it. But it's not kosher for you or I to sell or give away the same music because it does not belong to us. Only the CD or record in it's physical manfestation belongs to you.

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. There's more potential for harm from speeding or running a yellow-light, but most of us will do both without a second thought if we believe we can get away with it. Why all the hand-wringing over this issue? I understand why the musicians and other music industry-associated people on the board feel this way, but what about the rest of you?

Remember, I spent a lot of time on the other side of the cash register (which is probably what made me so cynical). As I understand it, it is not the individual sale from which the record company/artist derive their cut, but rather the wholesale of the product to the stores themselves. This is why Justin Timberlake or Mariah Carey can have a CD debut at number one on the Billboard chart the day it is released. What happens is that Best Buy, Borders, FYE, etc. will buy titles like Timberlake and Carey's in bulk. It is *that* sale which produces the album's chart position and it is *that* sale from which the copyright holder profits. Do you really think that Hank Mobley's estate gets a nickle or something every time one of his CDs sold in a point-of-sale purchase? EMI gets the money from the wholesaler, who gets its money from the retailer. The retailer gets its money from the customer. That's how the cash flows here. In otherwords, Justin and Mariah get paid even if NO COPIES of their CDs sell. Now, if they don't sell any CDs, Best Buy isn't going to pay for the next release, and Justin and Mariah won't get any cash. Used buying, burning, and illegal downloads contribute *somewhat* to the drop in demand (but much less than people assume, according to most studies), but far worse for CD sales are the high prices on new releases, the general decline in quality of a good deal of popular music, and (most importantly) the fact that DVDs, video games, and other forms of entertainment are providing a lot of competition for the public's dollar. People spend less on music on average because they spend more time in front of the TV, not because they are burning CDs off their friends or even downloading illegally.

For myself, as I've said, I don't do illegal downloads (unless the product is ITSELF illegal, as in the case of Danger Mouse's "The Grey Album").

[Guy Berger]

  Aggie87 said:

I agree with Tom on this.

Regarding a used cd, royalties were paid to whomever had them coming. Ownership of that copy merely changed hands, and money was made by the seller.

Making a CDR creates a copy of the music for which no royalties have been paid to anyone - it's theft.

Erik,

This is a good point on the abstract ethics of the situation, but I don't see it having any bearing on the actual outcome: are any actual sales (and therefore artist income) displaced? 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).

As far as prescriptive ethics I don't have much to say except: if you know that you would never actually buy a new copy of a CD, you can burn a copy with a clear conscience. (If you feel guilty send a few bucks to the label.)

Guy

Guy

Edited November 2, 2006 by Guy

[JSngry]

  Chuck Nessa said:

  JSngry said:

  Jim Alfredson said:

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.

Nor here.

If we wantto frame the issue in terms of "what the artist signs on for", then the matter is clear - reselling previously purcased CDs is part and parcel of the normal "lifespan" of such an item, and surely part of what the artist signed on for. Making a burn for distribution isn't. No problems, & case closed.

Except...

I myself recieve a fair number of burns from friends as "preview" type things, and if I deem some of them worthy of my investment, I'll go right out and get a real copy, as well as sharing my enthusiasm with others, which hopefully leads to yet a few more sales. Non-sanctioned burning as a promotional tool works, but there has to be integrity at work in both intent and action. That's very much a matter of personal character, and no law can either create or enforce character, although they certainly can create the appearance of a "popular consensus" which is not to be underestimated. Still, those who color outside the lines with principal will not be denied, nor should they be.

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.

[WD45]

  Son-of-a-Weizen said:

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.