I can’t hear you…

I’ve been thinking about Lala.com‘s stated policies regarding digital copies of discs its members trade: they state that upon shipping a disc, a member should delete any digital copies of the disc they might have. (A word about Lala’s trading model: you specify which CDs you want, and which you have available for trade, but you can’t specify which disc comes when, nor can you make direct trades with other members. You get roughly as many CDs as you ship out. For each CD you get, you’re charged a buck plus a shipping charge – which varies depending whether you also receive artwork or just the CD in a clamshell. You pay no other postage.)

My guess is this (totally unenforceable) provision exists entirely to placate the RIAA. It makes no sense on any other level. First absurdity, of course, is the notion that rights a CD-owner possesses can be retroactively taken away: when I first bought CDs in 1986, there was no such thing as readily available digital replication for the consumer, so I could not possibly have agreed to such a limitation in my rights as purchaser. (I suppose there could have been – but wasn’t – a clause attempting to cover any new technologies that might be developed…) If I buy a CD, and I make a second copy of it to keep in my car stereo, it’s absurd to suggest that suddenly I no longer “own” the copy if I trade the original.

The main reason such a restriction plays ball with the RIAA is that it discourages an obvious use of Lala’s trading system: so-called “rip & ship” trades, wherein CDs are traded solely to rip a digital copy, which is then exchanged for another disc, which is then ripped, etc. etc. This is the sort of thing that the RIAA feels would really cut into sales of new CDs (and therefore into its member labels’ profits).

But would it? In fact, for everyone except the label, rip & ship is a benefit. It benefits Lala members, obviously: the “ripper” gets more music, and more music is put into circulation for other Lala members. It benefits Lala itself for the same reasons. Lala also pledges to dedicate 20% of trading revenue to musicians. So in fact, ripping & shipping increases benefits to the musicians, since every time the same CD is passed along to another member, that’s another ka-ching of the trading register, and another 20% of that trading revenue for musicians. What are the alternatives? Lala members otherwise could (a) keep the CD (so there’s only the one trade to funnel revenue to musicians); (b) toss it in the trash if they don’t like (no revenue – and bad for the environment); (c) sell it to a used-CD store (no profit to musicians); or (d) donate it to a charity like Goodwill (again, no profit to musicians…but a trivial tax deduction for the donee).

The RIAA assumes that rip & ship harms its members because if ripping weren’t possible, consumers would otherwise purchase a new CD (or, more directly, that having ripped a digital copy, consumers will not purchase a new CD). Is that true? Lala’s a good test – since it also sells new CDs (at quite low prices, I might add). Here’s where the random nature of Lala’s trading model comes into play: since you can’t specify which particular CD you’ll get in trade, if you really want a particular CD right now, you have to buy it from the Lala store (or one of those quaint bricks-and-mortar places, of course). To me, then, the real bulwark against rampant ripping & shipping isn’t the absurd idea that people don’t have the right to make copies of CDs they own; it’s the fact that Lala (a) gives you an item at random from a list you choose, and (b) also runs a store that sells new CDs, in case you don’t want to wait for a particular title to show up by chance.

The problem, of course, is that sales of new CDs profit labels; sales of used CDs do not. (Incidentally, I’m rather surprised that at some point, the industry never tried to regulate the sale of used records, mandating that used-record stores give back a portion of income to labels…) But musicians have nothing to lose: given the sharkish nature of most record-label contracts that ensure that everyone else besides the musician gets paid first – and because Lala actually has a mechanism for paying musicians on sales of used, traded CDs – such sales are much better for the musician than any other use of the once-sold CD. (And frankly, it wouldn’t surprise me – assuming Lala survives and trades occur at high enough volume – if musicians made more money from Lala’s trades than from their labels.)

The huge irony of this whole thing is that CDs were, for several years, a godsend to the recording industry, as people re-bought titles to upgrade their collection from ratty old LPs and cassettes. And, of course, different divisions of the same megaconglomerates that own major labels developed and sold the very technology used to make digital copies of those CDs. But you can’t put the digital genie back in the bottle: the RIAA’s running around wild-eyed with a hatchet lawsuit and poison copy-protection schemes, threatening its own best customers, is a pathetic act of desperation. And it’s the industry’s own fault, for not accepting (and figuring out how to profit from: hello iTunes) the inevitable changes that any number of people saw coming from years away.

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2 Comments

Filed under noiselike, thinky

2 responses to “I can’t hear you…

  1. Anonymous

    “(Incidentally, I’m rather surprised that at some point, the industry never tried to regulate the sale of used records, mandating that used-record stores give back a portion of income to labels…)”
    They have, several times, although first-sale doctrine has been upheld so far. In ’87/’88 or so there were initiatives afoot (at least in the mid-atlantic) that had used music stores running scared.

    PS why is blockquote unacceptable HTML? seems low-risk to me.

  2. 2fs

    Dunno – you can certainly use the “blockquote” tag in posts. Silly Blogger – ah well, you get what you pay for.

    Anyway: not surprised to hear that. Certainly, though, requiring commercial entities that profit from the sale of CDs (or records) makes more sense than going after individual consumers.

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