Confessions of a Promo-CD Junkie: Who Will Stop the Music Industry Gravy Train?

Roast Beast is basically directing this disclaimer to Universal Music Group and any other concerned label, major or indie, that might take issue with Augusto’s selling activities. The statement reinforces a ruling handed down in the U.S. District Court on June 10, when a judge dismissed the Universal Music Group lawsuit against Augusto, filed in May 2007.

Universal, the largest record company in the world, owns some of America’s biggest labels, including Interscope, Island Def Jam and Geffen. Its lawsuit against Augusto claimed that Roast Beast had been auctioning promotional CDs for years, that these CDs still belonged to Universal, and therefore Augusto had no right to sell them. The complaint described Universal as a company that “creates, manufactures and sells phono records embodying its copyrighted sound recordings. In addition to the commercial recordings UMG sells to the public, UMG (like other record companies) licenses a small number of ‘promotional’ CDs to select individuals, often before a commercial release to the public of a full album, for purposes of promoting and advertising that commercial release.”

Jennie Warren

Pile of dreams

Related Content

• Bizarre Tidbits Hidden in the Children's Audio Tour at the Getty
  June 17, 2013
• Ask a Failed Musician: What Defines Success In This Weird Industry?
  October 4, 2012
• Should My Band Hire a Publicist?
  December 25, 2012
• Don Was on Running Blue Note Records
  February 7, 2013
• Metal Blade Records Celebrates Its 30th Anniversary
  November 29, 2012

More About

• Troy Augusto
• Sound Recording Industries
• Judy Miller Silverman
• Law
• Intellectual Property

Universal claimed that because it never gave permission to the recipients (or, in its words, licensees, to which I say, I never agreed to license Universal’s music when I opened the package) to sell, give away or dispose of its copyrighted promos, Roast Beast was selling merchandise the company still owned.

Roast Beast’s attorneys simplified the argument in one of their defense briefs: “Like the goblins in J.K. Rowling’s Harry Potter books ... UMG Recordings Inc. maintains that the eternal owner of the object is the maker, rather than the purchaser, at least where these ‘promo CDs’ are concerned.”

While acknowledging that Universal as copyright owner has the exclusive right to “distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership,” Roast Beast’s lawyers argued that right is subject to an important limitation: “[T]he owner of a particular copy or phonorecord lawfully made under this title” — in this case, Augusto — “or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” In other words, the defense argued, the purchaser is the eternal owner of the object.

But are you a purchaser if you simply receive a promo CD in the mail? Augusto’s lawyers proved that Universal has absolutely no plan in place to retrieve CDs once they’ve been sent out: “In short, those to whom UMG mails ‘promo CDs’ enjoy all the principal hallmarks of ownership: Their possession is unlimited in time, they are under no obligation to return the CDs, and there is no penalty to them should the CDs be lost, damaged or destroyed. UMG, for its part, also behaves as though it has parted with ownership: It does not keep records regarding the whereabouts of the CDs, nor has it ever sought their return from the recipients.”

So because Universal sent out its promotional CDs without any expectation that they would ever be returned, the items were in fact gifts, and therefore covered under what’s called the “first-sale doctrine,” which allows for recipients of gifts to dispose of them however they see fit, regardless of what the giver of said treats has to say about it. (In essence, it’s perfectly legal to regift.) The brief continues: “Were it not for the first-sale doctrine, lending libraries, video-rental shops and secondhand-book stores would all infringe a copyright owner’s distribution right, as would selling a book at a garage sale or loaning a DVD to a friend.”

Universal has vowed to appeal the ruling, and in doing so is trying to plug the pinhole in the dike while the tsunami that is illegal file sharing threatens to pull it under.

What’s most odd about UMG’s actions is that the company is chasing single copies of its albums, when vast digital databases of that same album are available online. The company, in fact, targets the people whom Universal and the other major labels have so spectacularly failed at reaching with their own wares: obsessive fans who seek physical copies of music recordings. UMG sued Augusto for finding a little niche in the dwindling market for CDs — in essence, capitalizing where Universal has struggled. Anyone can track down a copy of the new Coldplay CD on a Torrent site, scour the Internet for MP3s of it and usually come up with an overflowing basket. It’s the object Augusto’s customers seek.

Don’t tell anyone, but I sell my CDs after I’m finished with them. I say this with the full knowledge that I may lose my spot on the train, might be hit with a lawsuit (though I don’t recall if I’ve ever sold a Universal promo), or may be perceived as not being “down” with the “scene.” I sell promo CDs in one of two ways: at a Hollywood record store, and to a buyer who has adamantly requested I not write this story for fear of upsetting the balance. For the most part, I sell for trade in order to feed my unquenchable lust for music. If I trade at said Hollywood record store (though I think certain buyers low-ball me), I ask for a credit slip, and then spend whatever credit I get, usually a couple hundred dollars, on vinyl, odd imports and reissues, stuff that doesn’t come free to me. Strolling the aisles with credit slip in hand feels like I’ve won a department-store shopping spree.