Record shops: Used CDs? Ihre papieren, bitte!
By Ken Fisher | Published: May 07, 2007 - 01:23PM CT There are a few things lawmakers have decided really ought to be handled with the "care and oversight" that only the government can provide: e.g., tax collection, radioactive materials, biohazards, guns, and CDs. CDs? No, I'm not talking about financial Certificates of Deposit, though that might make more sense. I'm talking about Compact Discs.
New "pawn shop" laws are springing up across the United States that will make selling your used CDs at the local record shop something akin to getting arrested. No, you won't spend any time in jail, but you'll certainly feel like a criminal once the local record shop makes copies of all of your identifying information and even collects your fingerprints. Such is the state of affairs in Florida, which now has the dubious distinction of being so anal about the sale of used music CDs that record shops there are starting to get out of the business of dealing with used content because they don't want to pay a $10,000 bond for the "right" to treat their customers like criminals.
The legislation is supposed to stop the sale of counterfeit and/or stolen music CDs, despite the fact that there has been no proof that this is a particularly pressing problem for record shops in general. Yet John Mitchell, outside counsel for the National Association of Recording Merchandisers, told Billboard that this is part of "some sort of a new trend among states to support second-hand-goods legislation." And he expects it to grow.
In Florida, Utah, and soon in Rhode Island and Wisconsin, selling your used CDs to the local record joint will be more scrutinized than then getting a driver's license in those states. For retailers in Florida, for instance, there's a "waiting period" statue that prohibits them from selling used CDs that they've acquired until 30 days have passed. Furthermore, the Florida law disallows stores from providing anything but store credit for used CDs. It looks like college students will need to stick to blood plasma donations for beer money.
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?
The music industry has never been a big fan of the Doctrine of First Sale, and the rise of digital music sales will only exacerbate the tension between consumers who believe that they "own" what they pay for, and the music industry. As more and more content-oriented goods transition to digital formats that are distributed free of physical formats, this issue is going to get tricky because it will be harder to spot the counterfeits from the authentic products, and consumers will still expect to exercise robust rights with the content that they've paid for with their hard-earned cash.