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Save the CD!

11 Mar, 2002 By: Thomas K. Arnold

SAN FRANCISCO — A convention seminar on "the seduction of digital music" turned into a brainstorming session on how to save the CD.

One retailer floated the concept of pushing for legislation to allow the rental of music software as an additional revenue stream for frustrated music sellers.

Consumer advocate Fred Von Lohmann, a senior staff attorney specializing in intellectual property law for the Electronic Frontier Foundation, jumped at that notion. Calling it a "wonderful question," he urged retailers to "get together and make Congress repeal that stupid law."

The law he's referring to is the Rental Record Amendment of 1984, which exempts sound recordings from the First Sale Doctrine, the same piece of legislation that gives video retailers the right to rent videos. Alarmed at the widespread practice of renting phonograph records for 24 to 72 hours for fees of 99 cents to $2.50 per disc in the early 1980s, record companies feared the practice cut into sales and lobbied Congress intensely for help.

The resulting amendment provides that any "act or practice in the nature of rental lease, or lending" of a phonograph record, subject to certain limitations, constituted an act of copyright infringement. A congressional subcommittee found "that the nexus of commercial record rental and duplication may directly and adversely affect the ability of copyright holders to exercise their reproduction and distribution rights under the Copyright Act."

Is it time to revisit this legislation? Advocate Von Lohmann certainly thinks so, and he pointed to several retailers who are already skirting the law to effectively let consumers "rent" CDs.

"There's a retailer up here in the Bay Area that lets customers bring back any new CD within a week for 75 percent of the purchase price," he said. "They may not be making the record companies very happy because you know what's happening — people are taking these CDs home and burning their own copies — but at least they're making money. Not surprisingly, they also have a huge selection of used CDs."

One audience member, however, said the rental of music software "absolutely couldn't work," both because of the huge amount of new releases coming into the market each year — pegged at 35,000 titles — and because of the opportunities for piracy.

"The notion of music at rental is absolutely absurd," he said.

One panelist suggested record companies find ways to enhance the value of CDs, perhaps by including stickers or tattoos in the packaging.

Retailers on the panel also called for record companies to stop copy-protecting CDs, saying this practice stops buyers from making copies of songs or albums for personal use and thus diminishes the perceived value even further.

"We can't sell crippled product," said Alayna Hill-Alderman of Record Archive.

Hill-Alderman also suggested retailers carry more used CDs. "It gets people in the stores," she said. "Used CDs are a good value for the money. Nobody wants to spend $19.98 for one CD."

Meanwhile, analyst Aram Sinnreich of Jupiter Communications released a new survey that reiterated earlier findings that consumers who download music tend to buy more CDs as well.

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