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

[Aggie87]

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.

They did get paid for the used copy, on its original purchase. That's the difference. They aren't getting paid on the copies you burn for your friends.

When you are comparing buying a used copy versus buying a new copy, then I think the artist would obviously prefer you buy the new copy, since that results in an additional sale and revenue.

But that used copy did what it was manufactured to do, already. The burned copy does not result in payment to anyone who is entitled to payment for that recording.

Edited November 3, 2006 by Aggie87

[Tjazz]

Would you rather see your CD at a USED record store or the library?

[Claude]

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?

In Europe (and apparently in California), there is already such a thing for art sales, it's called droit de suite (artists' resale rights). It allows artists to claim royalties if their works are being resold for substantially higher prices than they sold it for. But it order to keep it managable, it only applies to resale prices above a certain value.

http://www.caslon.com.au/droitprofile.htm

Edited November 3, 2006 by Claude

[The Magnificent Goldberg]

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?

OK

MG

[andybleaden]

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

[RDK]

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.

They did get paid for the used copy, on its original purchase. That's the difference. They aren't getting paid on the copies you burn for your friends.

When you are comparing buying a used copy versus buying a new copy, then I think the artist would obviously prefer you buy the new copy, since that results in an additional sale and revenue.

But that used copy did what it was manufactured to do, already. The burned copy does not result in payment to anyone who is entitled to payment for that recording.

All good points, of course, but let me repeat myself from my post above...

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? And how is that different from my buying the music and then selling it (the digital files) "used?"

I was being silly before, but now I'm serious: how is a CD-R made from purchased audio files different from a used CD? They both affect the artists/rights holders the same way. And yet one is perfectly acceptable while the other is tantamount to raping young children in church basements.

[Noj]

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? And how is that different from my buying the music and then selling it (the digital files) "used?"

Beside your point Ray, but iTunes files are "Protected AAC" files and will not play on a computer without a password. They'll play fine in a regular cd player. They also prevent computers from altering their format, so they can't be changed into mp3s. For that reason iTunes will never see another penny from me!

[The Magnificent Goldberg]

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.

They did get paid for the used copy, on its original purchase. That's the difference. They aren't getting paid on the copies you burn for your friends.

When you are comparing buying a used copy versus buying a new copy, then I think the artist would obviously prefer you buy the new copy, since that results in an additional sale and revenue.

But that used copy did what it was manufactured to do, already. The burned copy does not result in payment to anyone who is entitled to payment for that recording.

All good points, of course, but let me repeat myself from my post above...

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? And how is that different from my buying the music and then selling it (the digital files) "used?"

I was being silly before, but now I'm serious: how is a CD-R made from purchased audio files different from a used CD? They both affect the artists/rights holders the same way. And yet one is perfectly acceptable while the other is tantamount to raping young children in church basements.

A burned CD-R is obviously not an authentic edition, so it would certainly command a lower price in the second hand market. That might mean that it wouldn't represent to you an adequate return on the time and trouble and cost of purchasing the music an CD-R.

But you make an interesting hypothetical point.

There is, however, one set of circumstances that might conspire to make it more than hypothetical. Universal has released, only for download from e-music, a shedload of albums, many of which I want. But, since I'm not resident in the US, I can't purchase them. So I can't purchase them in any format. A CD-R such as you describe would be a new form of arbitrage.

MG

[Alexander]

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.

They did get paid for the used copy, on its original purchase. That's the difference. They aren't getting paid on the copies you burn for your friends.

When you are comparing buying a used copy versus buying a new copy, then I think the artist would obviously prefer you buy the new copy, since that results in an additional sale and revenue.

But that used copy did what it was manufactured to do, already. The burned copy does not result in payment to anyone who is entitled to payment for that recording.

If I'm burning a CD for a friend, then the artist got paid when I bought MY original copy. You are assuming that I didn't pay for the disc from which I am copying.

[Aggie87]

If I'm burning a CD for a friend, then the artist got paid when I bought MY original copy. You are assuming that I didn't pay for the disc from which I am copying.

But now your friend is getting an illegal copy of that music, for which the artists etc received no compensation. Your original copy is fine and legitimate. Don't you get that?

[Guy Berger]

If I'm burning a CD for a friend, then the artist got paid when I bought MY original copy. You are assuming that I didn't pay for the disc from which I am copying.

But now your friend is getting an illegal copy of that music, for which the artists etc received no compensation. Your original copy is fine and legitimate. Don't you get that?

From the artist's perspective, how is this different from a used CD sale?

Guy

[Alexander]

If I'm burning a CD for a friend, then the artist got paid when I bought MY original copy. You are assuming that I didn't pay for the disc from which I am copying.

But now your friend is getting an illegal copy of that music, for which the artists etc received no compensation. Your original copy is fine and legitimate. Don't you get that?

From the artist's perspective, how is this different from a used CD sale?

Guy

My point exactly, thank you. In both cases, the artist was compensated once, when the original copy was sold new. In both cases, the music is passed on to another listener without compensation to the artist (or other copyright holders). If you object to burning on ethical grounds, you must also object to the buying/selling of used CDs.

[Aggie87]

If I'm burning a CD for a friend, then the artist got paid when I bought MY original copy. You are assuming that I didn't pay for the disc from which I am copying.

But now your friend is getting an illegal copy of that music, for which the artists etc received no compensation. Your original copy is fine and legitimate. Don't you get that?

From the artist's perspective, how is this different from a used CD sale?

Guy

My point exactly, thank you. In both cases, the artist was compensated once, when the original copy was sold new. In both cases, the music is passed on to another listener without compensation to the artist (or other copyright holders). If you object to burning on ethical grounds, you must also object to the buying/selling of used CDs.

I disagree. In the case of burning a cd, you have created a new copy of that music for which the artist/producer etc has never been paid what's due. 2 copies of the music, artist paid once.

There is a difference between that and the used cd, which DID pay whatever money was due. 1 copy of music, artist paid once.

How is the first case acceptable? If you're the artist, how many copies of music do you want out there that you've been paid for? Do you want to only receive compensation for 1 out of every two copies of your music that is in people's homes, or for each copy?

[J Larsen]

If I'm burning a CD for a friend, then the artist got paid when I bought MY original copy. You are assuming that I didn't pay for the disc from which I am copying.

But now your friend is getting an illegal copy of that music, for which the artists etc received no compensation. Your original copy is fine and legitimate. Don't you get that?

From the artist's perspective, how is this different from a used CD sale?

Guy

Because it is more akin to flooding the market with cheap used cds then selling your only copy to your friend.

[Guy Berger]

My point exactly, thank you. In both cases, the artist was compensated once, when the original copy was sold new. In both cases, the music is passed on to another listener without compensation to the artist (or other copyright holders). If you object to burning on ethical grounds, you must also object to the buying/selling of used CDs.

I disagree. In the case of burning a cd, you have created a new copy of that music for which the artist/producer etc has never been paid what's due. 2 copies of the music, artist paid once.

There is a difference between that and the used cd, which DID pay whatever money was due. 1 copy of music, artist paid once.

I don't see why the number of copies in existence is relevant in terms of outcomes -- all the artist/label/copyright holder should care about is the number of (potential) new copy purchases. I'm not sure why they would care about an abstraction. (I'd be curious if you'd explain why you disagree with this statement.)

N copies of one original CD cause some new copy purchases to be foregone. N used CD purchases cause some (probably more) new copy purchases to be foregone.

Guy

[Guy Berger]

But now your friend is getting an illegal copy of that music, for which the artists etc received no compensation. Your original copy is fine and legitimate. Don't you get that?

From the artist's perspective, how is this different from a used CD sale?

Guy

Because it is more akin to flooding the market with cheap used cds then selling your only copy to your friend.

Not necessarily. It is flooding if you share it on an online network with a lot of people. (Though as I stated, the amount of displaced sales is much smaller than the number of circulating free copies.) It's not flooding if you only make one or two copies for your friends.

Guy

[J Larsen]

My point exactly, thank you. In both cases, the artist was compensated once, when the original copy was sold new. In both cases, the music is passed on to another listener without compensation to the artist (or other copyright holders). If you object to burning on ethical grounds, you must also object to the buying/selling of used CDs.

I disagree. In the case of burning a cd, you have created a new copy of that music for which the artist/producer etc has never been paid what's due. 2 copies of the music, artist paid once.

There is a difference between that and the used cd, which DID pay whatever money was due. 1 copy of music, artist paid once.

I don't see why the number of copies in existence is relevant in terms of outcomes -- all the artist/label/copyright holder should care about is the number of (potential) new copy purchases. I'm not sure why they would care about an abstraction. (I'd be curious if you'd explain why you disagree with this statement.)

N copies of one original CD cause some new copy purchases to be foregone. N used CD purchases cause some (probably more) new copy purchases to be foregone.

Guy

Quick hypothetical example: You want to buy a cd, which I happen to own. You are holding out for a cheap copy (used/promo/whatever). I burn it for you, and you decide having the cdr is good enough for you. You are now out of the market for a cheap copy, so you don't pick up the used copy that turns up in your local shop next week. Someone else walks into the store, meaning to but the cd whether new or used, sees the used copy, and makes the purchase. If you had bought the used copy, they would have bought the new copy. The artist is now deprived of their 75 cent royalty.

I've seen this play out with my own eyes.

[Aggie87]

If I'm a young jazz fan (say an Aric Effron or a Jazz Kat aged person), and I love the music and want it all, what is more beneficial to the long-term viability of an artist - people purchasing legitimate copies of the music (new or used, both of which result/resulted in compensation) or indiscriminate burning, which results in an artist getting no compensation for the music that you are passing on to others?

The number of copies in existence is a legitimate issue. Compensation for each copy is owed to the artist/producer. What "right" do you have to legally make copies of cds and give them to others? None, legally. And in my opinion you have none ethically either, if you really want to support the music and the people that produce it.

[Guy Berger]

Quick hypothetical example: You want to buy a cd, which I happen to own. You are holding out for a cheap copy (used/promo/whatever). I burn it for you, and you decide having the cdr is good enough for you. You are now out of the market for a cheap copy, so you don't pick up the used copy that turns up in your local shop next week. Someone else walks into the store, meaning to but the cd whether new or used, sees the used copy, and makes the purchase. If you had bought the used copy, they would have bought the new copy. The artist is now deprived of their 75 cent royalty.

By the same rationale, one shouldn't sell used CDs.

Guy

[Teasing the Korean]

Would you rather see your CD at a USED record store or the library?

If I've run out of promos to give away, it's cheaper than paying full price.

[Guy Berger]

If I'm a young jazz fan (say an Aric Effron or a Jazz Kat aged person), and I love the music and want it all, what is more beneficial to the long-term viability of an artist - people purchasing legitimate copies of the music (new or used, both of which result/resulted in compensation)

Well, a used copy only resulted in compensation on its original sale -- the same thing with a CD-R copy.

or indiscriminate burning, which results in an artist getting no compensation for the music that you are passing on to others?

1) Who said we are talking about indiscriminate burning? I assume we are talking about someone burning a copy or two for his friends. I agree that indiscriminate anything -- burning, sharing online, or used CD sales -- will be harmful to the income of an artist.

2) The artist received compensation for the original sale of the music -- just as they did with a used CD.

The number of copies in existence is a legitimate issue. Compensation for each copy is owed to the artist/producer. What "right" do you have to legally make copies of cds and give them to others? None, legally. And in my opinion you have none ethically either, if you really want to support the music and the people that produce it.

Maybe compensation for each copy is owed to the artists in some sort of mystical, metaphysical sense. But the only thing that matters to the artist's income is compensation for each sale.

Guy

Edited November 3, 2006 by Guy

[J Larsen]

Quick hypothetical example: You want to buy a cd, which I happen to own. You are holding out for a cheap copy (used/promo/whatever). I burn it for you, and you decide having the cdr is good enough for you. You are now out of the market for a cheap copy, so you don't pick up the used copy that turns up in your local shop next week. Someone else walks into the store, meaning to but the cd whether new or used, sees the used copy, and makes the purchase. If you had bought the used copy, they would have bought the new copy. The artist is now deprived of their 75 cent royalty.

By the same rationale, one shouldn't sell used CDs.

Guy

I disagree, because the artist knows that's part of the bargain he's made at the time he signs his contract.

[Guy Berger]

Quick hypothetical example: You want to buy a cd, which I happen to own. You are holding out for a cheap copy (used/promo/whatever). I burn it for you, and you decide having the cdr is good enough for you. You are now out of the market for a cheap copy, so you don't pick up the used copy that turns up in your local shop next week. Someone else walks into the store, meaning to but the cd whether new or used, sees the used copy, and makes the purchase. If you had bought the used copy, they would have bought the new copy. The artist is now deprived of their 75 cent royalty.

By the same rationale, one shouldn't sell used CDs.

Guy

I disagree, because the artist knows that's part of the bargain he's made at the time he signs his contract.

The artist also knows that there will be some CD-R copying. Perhaps I am not understanding your point.

Guy

[J Larsen]

Quick hypothetical example: You want to buy a cd, which I happen to own. You are holding out for a cheap copy (used/promo/whatever). I burn it for you, and you decide having the cdr is good enough for you. You are now out of the market for a cheap copy, so you don't pick up the used copy that turns up in your local shop next week. Someone else walks into the store, meaning to but the cd whether new or used, sees the used copy, and makes the purchase. If you had bought the used copy, they would have bought the new copy. The artist is now deprived of their 75 cent royalty.

By the same rationale, one shouldn't sell used CDs.

Guy

I disagree, because the artist knows that's part of the bargain he's made at the time he signs his contract.

The artist also knows that there will be some CD-R copying. Perhaps I am not understanding your point.

Guy

The artist knows that the law allows for orignal purchaser of his cds to resell their copies. He also knows that the law does not allow people to burn copies of his cds and distribute them. Given that the artist knows that when they make the decision to enter a recording contract, there can not be an ethical problem with the buying and selling of used copies of his music. The same can not be said of burning, which does do further harm to the artist above and beyond the existance of the used market.

Now, if you'll excuse me, I have to stop procrastinating on a report I should be writing...

[Aggie87]

Well, a used copy only resulted in compensation on its original sale -- the same thing with a CD-R copy.

You're right, the used copy resulted in compensation on it's original sale. The artist is happy. The fact that it changes hands later on is not relevant to the artist - he/she has been paid what's due them.

The CD-R copy did NOT result in compensation, unlike the original. It's an additional copy of the music that is now in existence that has not compensated the artist. The artist is not getting paid for this copy which you are getting without paying for.

Maybe compensation for each copy is owed to the artists in some sort of mystical, metaphysical sense. But the only thing that matters to the artist's income is compensation for each sale.

THe CD-R copy is in effect a sale of that music for which the artist received no compensation/income.