Hacks Rejoice: Selling Promos Is OK!

Future Onion headline: Rock critics trampled during mad rush to used CD retailer's trade/sell counter.

By Fred Mills

Journalists, start your engines and start boxing up those CDs: On Tuesday a federal judge dismissed a lawsuit brought by Universal Music Group (UMG) against CD vendor Troy Augusto for reselling promotional discs. UMG had maintained — somewhat hilariously — that when it handed out promo freebies to magazines, critics, radio stations, record stores, etc. it actually retained ownership through some mysterious force only known to and understood by UMG, and that by simply stamping on the discs that resale was illegal made it so.

US District Judge James Otero, however, felt otherwise, wisely determining that only official lawmakers, and not entertainment corporations, can pass actual laws governing private individuals’ behavior. Pertinent to the case: the First Sale Doctrine, which has traditionally protected video rental stores, used bookstores and newsstands and libraries. Otero noted that Augusto’s actions (e.g., selling promos online as part of his business, Roast Beast Music Collectibles) were similarly protected by the right of first sale.

Weighing in on the matter was the Electronic Frontier Foundation, who had naturally sided with Augusto, which in a comment stated, “This ruling affirms and protects the traditional balance between the rights of copyright owners and the rights of the public.”

As major record labels are not generally known for their ability to adapt quickly to forces beyond their control (see: Napster, iTunes, etc.), however, UMG indicated Thursday that the decision doesn’t sit all that well with the label’s suits. According to Digital Music News a UMG rep informed them, "We intend to file an appeal and we are confident that we will prevail.”

Observed Digital Music News, “Universal is aiming to prevent the dilution of its physical product pool, though digital distribution offers the ultimate dilution of scarcity. Still, like most manufacturers, major labels would prefer a world without physical resale.  In a decidedly non-digital 1993, cowboy superstar Garth Brooks withheld shipments to retailers that were offering his albums used, though antitrust concerns and negative press eventually forced Capitol Records to supply the targeted outlets.”

Yeah, no shit. Yours truly was working at a new/used CD store when the Brooks flap hit. Upon being informed by EMI that we wouldn’t be able to order any Brooks product unless we yanked the used crap, my boss did just the opposite: he yanked all the NEW Brooks crap, shipped it back to the label, trashed all Brooks promotional posters, flats, etc., and then stuck a sign n the "B" section of the CD bins that read, “Ask us why we don’t sell Garth Brooks CDs."

For good measure, we also removed all promotional displays by artists on EMI-affiliated labels, and did likewise with other distributors' product when they threatened to cancel co-op advertising programs with our store because we were in the business of selling used CDs. It wasn't too long before the labels blinked, however, and they decided not to follow through with their sanctions. As my boss quipped at the time, "Fuck 'em. We make a higher margin on the used stuff anyway. We don't need their new product."

[Pictured: Watermarked/numbered Universal promo CD… someone, somewhere, is making an offer on this right now!]