New law bad for CD sales

DRM cripples downloaded tracks. Now ownership of CDs is being restricted too?

Independent merchants selling and buying used CDs across the United States say they are alarmed by stepped-up pawn-broker-related laws recently enacted in Florida and Utah and pending in Rhode Island and Wisconsin.

In Florida, the new legislation requires all stores buying second-hand merchandise for resale to apply for a permit and file security in the form of a $10,000 bond with the Department of Agriculture and Consumer Services. In addition, stores would be required to thumb-print customers selling used CDs, and acquire a copy of state-issued identity documents such as a driver’s license. Furthermore, stores could issue only store credit — not cash — in exchange for traded CDs, and would be required to hold discs for 30 days before reselling them.

At least one Florida town has enforced the law, resulting in the cited merchant pulling used CDs from its store.

The nominal purpose of the laws is to protect against the sale of fraudulent or stolen goods. But is this the real motive? Perhaps the true beneficiaries are music companies who don’t like used CDs competing with new ones. Ars Technica speculates:

Why this trend, and why now? It’s difficult to say, but to be sure, there is no love lost between retailers who sell used CDs and the music industry. The Federal Trade Commission has scrutinized the music industry for putting unfair pressures on retailers who sell used CDs, following a long battle between the music industry and retailers in the mid 90s. The music industry dislikes used CD sales because they don’t get a cut of subsequent sales after the first. Now, via the specter of piracy, new legislation is cropping up that will make it even less desirable to sell second-hand goods. Can laws targeting used DVDs be far behind?

If this kind of legislation is being pushed by the music industry, I’m not convinced it’s doing itself any favors. Sales of compact discs are plummeting. Potential sale of used product is good for cars and books, so it might be one of the few advantages remaining to CDs over downloads, too. The possibility of finding used CDs I want is also one of the only things that gets me into boutique music stores instead of going straight to the internet to buy music.

Comments

  1. Jeff says:

    Used CDs are generally cheaper than iTunes downloads – I bought a used Gin Blossoms CD for $1 when I was in Tampa.

    Paraphrasing from Cameron Crowe (via Philip Seymour Hoffman): The RIAA will ruin rock and roll and strangle everything we love about it…

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