Live and learn. I used to think that in the music business, "C&W" stood for "country & western." Now I find out that singer Garth Brooks and a cabal of record distributors have redefined it as something more along of the lines of "cheap & whiny." For Brooks, who's sold $400 million worth of albums in the past couple of years, more than enough money apparently isn't enough.
The bug in Brooks' billfold is that if one of his fans buys a pre-owned, used CD, he doesn't get a cut. Musicians such as Brooks are only paid royalties the first time an album is sold. Although used CDs make up a niggling 1 percent of a $9 billion annual business, Brooks and his big-time record-label buddies--Sony, Thorn EMI's CEMA, Matsushita's UNI, Time Warner's Warner/Elektra/Atlantic, and the like--are incensed that you and I are able to buy used CDs. For their part, the distributors are withholding advertising support and have threatened not to accept returns of compact discs, including defective ones. Brooks, too, has made sacrifices--before backing down, he threatened to not allow his new album be sold in stores the stock used CDs. The Independent Music Retailers Association retaliated with a class-action suit, alleging these tactics are in violation of the Sherman Anti-Trust and Robinson-Pactman Acts.
Garth doesn't get it. According to the Copyright Act's doctrine of first sale, royalties are paid only the first time an album is sold. After that, the album is freely transferrable. That's the law. The same goes for books.
When you buy a book or CD under normal circumstances, what you've really bought is a license for single-user, non-commercial access to and use of the media and information stored on it. The copyright holder (author, artist, publisher, estate, or whoever) retains ownership of the information, but you own the media. You can make cassette copies of a CD or photocopies of a book for personal purposes, but if you sell the CD/book you should also include or destroy all copies of it.
The same goes with software. Used software is, in fact, one area vendors such as Microsoft and Borland are in general agreement. Borland's no-nonsense License Statement, for instance, says you can "copy [the software] onto a computer. . .and you make archival copies of the software for the sole purpose of backing up your software and protecting your investment." Both Borland and Microsoft say you can box up and sell the software as long as you dispose of all copies (whether on floppies or on your hard disk). The key here is that the software "can't be used by two different people in two different places at the same time." And guess what? The new owner doesn't have to pay a penny to the vendor. (Borland and Microsoft do treat the issues of technical support and upgrade rights differently, however.)
Brooks is not without his politically-correct public-relations wits, however. He isn't so crass as to say that he wants the extra bucks; instead, it's his songwriters who need to make a living and "feed their children." But when taking on sellers of used CDs, Brooks is tilting at the wrong windmills. What he should be questioning is why there's a market for used CDs in the first place. That's simple. At $17 each (soon to climb to $18), CDs are overpriced. That price may have been justified ten years ago, but manufacturing costs are now only about $2 per disc. If Brooks is truly concerned about the amount of bologna on his songwriter's sandwiches, he might rethink his reported nearly 50 percent per CD royalty rate.
The music industry might also consider how it conducts business. Any enterprise that has a 90 percent failure rate with new releases has to recoup its losses somehow, but double-dipping it customers isn't a long-term answer. In considering the novel idea of better serving its customers, the recording industry might to give listeners more bang for their 17 bucks. Specifically, the de facto industry standard is to include ten songs per album, a number that has its roots in 40-minute vinyl LPs which could only handle five songs per side without losing fidelity. CDs can hold much more. (Can you imagine the Dr. Dobb's/CD with a single month's issue?)
With cassette-tape sales--not CDs--making more than 65 percent of his business, you wonder why Brooks opened up this can of guitar strings in the first place. The digital age has altered everything, and Brooks may be readying his pockets for future means of distribution. Cassettes will disappear and CDs will change. IBM and Blockbuster Video already have a plan for downloading digital music from online databases, then storing it on writable CDs. Software will be available from similar sources.
There's no question that licensing arrangements for digital data will change over the coming years. But if the Garth Gang gets its way, the biggest change won't be how you use the information, but how much you pay for it.
Jonathan Erickson
editor-in-chief
Copyright © 1993, Dr. Dobb's Journal