Latest Threat To The Music Industry: CDs

from the lalalala dept

We’ve talked before about the overhyped CD swapping site LaLa, and why it seemed unlikely to succeed. Services of this nature — there have been several other attempts at the exact same thing — tend to get filled up with the junk that people want to get rid of, as opposed to the CDs they really like, making them as popular as the dollar bin at the CD store. But a new report from IDC is sounding the alarm bells and warning the music industry that because these CDs are DRM-free (as virtually all are), people could copy them onto their computer before trading them. In fact, the IDC analyst is probably right that people will copy the CDs before trading, but then the whole of the used CD business is a threat too. And under that logic, even retailers of new CDs are contributing to the piracy problem. But then everything is already on P2P sites, which only need one person to upload an album for it to propagate; yet another person uploading Dark Side of the Moon, whether they got it through LaLa or Amazon, does nothing. If the music industry were serious about beating piracy, there’s an easy solution: stop selling music. But assuming they don’t want to take this drastic measure, they should look for fresh ways of selling music, as opposed to worrying that every new distribution model might contribute to piracy.

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Comments on “Latest Threat To The Music Industry: CDs”

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Mousky (user link) says:

Re: Re: Public Library

It does not give the RIAA more ammo nor does it prove them right. The real question is: if the library did not carry CDs would your sister have purchased those CDs?

When I was in university back in the last 80’s, everybody in residence copied each others CDs onto cassette tapes. But we also bought a crapload of CDs. I can’t recall going to the record store and NOT buying something. If DRM existed back then, it was unlikely that I would end up buying the CD version of the casette tapes. Maybe a few more CDs based on the money that I spent on buying blank cassette tapes, but nothing substantial. My budget was fixed. For me to buy more CDs would have meant cutting back on drinking or some other activity.

In fact, because my musical tastes were exanded by the cassette tapes, I bought CDs and attended concerts that I would have never bought or attended in the first place.

whargoul says:

Copying CDs

“people could copy them onto their computer before trading them”

Actually, one of the first things I do with a CD is rip it to MP3. Whether I trade/loan/sell/swap the CD is irrelevant. Most of the time I keep the CD as I like to have a hardcopy of the original along with the artwork and whatnot that comes with the CD.

Dan says:

Re: Re:

Yeah, the best thing to do would be to buy a used CD at a music shop for $4 or $5, rip it, and sell it back for $1 or $2, then you get a CD for about 3 bucks!

But that’s only if you’re going to be evil about it, and lord knows record companies woud prefer us not to have the choice of being evil or not, they want that privelige (sp?) all to themselves 🙂

Ryan (profile) says:

the only solution that will make the music industry happy is a pay per play model.

Sort of like the old out-dated Circuit City Divx… you buy a CD and you can listen to each song X times… then it’s $Y per listen after that.

Only it won’t be cds, it’ll be some proprietary format that only plays in their player that’s somehow wired to the internet.

I figure we’re about 2 years away from this type of business model.

Andrew says:

Well here’s the good news for me at least: There hasn’t been any good music recorded in over 30 years, so everything I like is already out on CD. Let them move to some idiotic new DRM-laden useless model. Won’t affect anything I listen.

Maybe they should stop pushing crap music on the world if they want to increase sales.

Nathan says:

Re: Re:

Wow. Nothing good since 1976? As much as I hate Britney, Christina, and Green Day, I’d dare say there a lot of really great artists out there, recording outstanding music that just doesn’t make it to Clear Channel. And what was so great about 1976? John Denver? Captain & Tenille? Seals & Croft?

Lay Person says:

Re: Re: #19

I don’t think he’s revelling in the quality of music since 1976 but rather that the music industry has changed to such a degree that in the past one might have at least heard some decent music through a major label. Now, the very cutlure of the major labels sucks so thoroughly that one can’t even get an idea of decent music

Topher3105 (profile) says:

Re: Re:

Pretty cynical aren’t ya you old geezer. I am surprised your even using a CD and not winding your Edison cylinder phonograph.

There is a lot of great music out there, worthy enough to even pay for. Some of that music even plays in Stereo on FM radio stations.

You need to go eat some fibre and have a good poop, give your Beach Boys album a break!

Eileen says:

“Only it won’t be cds, it’ll be some proprietary format that only plays in their player that’s somehow wired to the internet.

I figure we’re about 2 years away from this type of business model.”

I LOVE music, but there is no way in HELL I would pour money down a drain on something like this. I can get by with what I have or without anything at all if need be.

I support artists because I love music. Fuck the corporations and the greedy metallica types. I’ll pay you what I think your shit is worth, otherwise I don’t want it. Too bad for you, eh?

Anonymous Coward says:


“the only solution that will make the music industry happy is a pay per play model.”

And what would stop someone from opening an audio recording program and setting the record method to Wave in the recording control and record it while it’s playing? As someone mentioned before, as long as there’s sound it can be recorded.

Jay says:

Common sense...

DRM doesn’t matter. If you can hear it, you can copy it. No matter what new media they invent, no matter what DRM they put on it. I you can hear it, you can copy it, even if no one is working on hacking the DRM. Just record it as analogue and convert it back. The more they work on DRM the more popular they make P2P networks. If it’s too hard for the average user to rip (per his fair use rights) then he will turn to the P2P networks to get his mp3’s of the album he just bought. And while he’s searching there he might find a few other things he’s like to hear.

And I think it should be obvious to the RIAA by now that no matter how much they prosecute P2P users and companies, all they are accomplishing is driving the networks a little further underground and making users harder and harder to track. The RIAA and MPAA are probably directly responsible for most of the inovation in P2P networks in recent years, especially in the area of privacy.

So they are wasting money on researching DRM, and prosecuting P2P users, and driving up the costs of CD’s and Movies to pay for it all. And they wonder why sales are declining. They can’t possibly do anything put piss off their customers if the keep doing this. Common sense says they need to either:

A.) Stop spending money on these things, so they can drop the cost of their product and see if that brings customers back.


B.) Spend the money on researching and developing a new buisness model that involves convenient online distribution at a reasonable price.

Personally, I refuse to purchase CD’s from major labels, because I won’t help them fund a futile war on P2P technology and research on how to restrict my fair use. I’ll wait for someone at the companies to grow a brain and get some common sense.

Chris says:

Re: Common sense...

Check out Nettwerk Music Group, of Canada… you’re matching their CEO, Terry McBride, nearly point for point. In my opinion, they’re the company “with a brain” that you’re talking about. There’s a great article in last months (maybe month before?) Wired called, “No Suit Required.” Check it. And no, I don’t work for Nettwerk, but I’d take a job with them any day if they offered it.

claire rand says:

Re: Re: Rootkit

until the ‘next format’ CD requires active headphones that use patented technology to avoid clones…

now the headphones report back they are actually headphones and not a line in lead so thats out.

of course you could always just use a microphone.. until the format after that (released in conjunction with laws to ban microphones) works round that…

this is a battle these dipsticks won’t win. make what they sell worth the price and the problem goes away.

Lay Person says:

As I've always said...

As I’ve always said it doesn’t matter hwere the music comes from, if a person can hear it, it can be pirated.

The music industry should concentrate on funding and selling music. Stay away from the anti-piracy stuff. Yeah people will steal as they always do and you will spend more money trying to end all piracy than you will make by doing what you do best.

Sure, it’s wise to create deterrents and preventative measures but to actively and offensively go out to hunt them down?

Nothing will become of this behavior other than cause divisions.

BillGod says:

Holy crap a lot of comments

I never understood the “used” cd industry. To me this is a bigger threat to the RIAA than mp3’s. I have tons of freinds that only buy used. This goes for games too. Can some one explain this to me?

(new) person buys a cd/game and pays the clerk at the store. The store makes $$ and so does the company that produced the cd/game

(used) person buys a cd/game and pays the clerk at the counter. The store makes $$ but the company that produced the cd/game never sees a dime.

I am not positive but I dont think the used stores have to pay royalties on anything do they?

Anonymous Coward says:

Re: Holy crap a lot of comments

“I am not positive but I dont think the used stores have to pay royalties on anything do they?”

No. See the Doctrine of First Sale for more.

Once a copyright owner sells a tangible copy, they lose all rights to that tangible copy. They are owed no further monies for furhter trading, and cannot dictate in any way shape or form how it is further re-distributed. The only thing they can do is buy the copy back and destroy it (or resell it).

And someone said we americans dont have any consumer protection laws… (ok, so the DMCA tried to take most of them away, but we at least we still have that one, australia doesnt!)

Some Guy says:

With a 4 inch male to male (3.5mm) standard headphone patch cable, one end in the audio-out (speaker) port and the other in the audio-in (mic) port, you can (as close to fully digitally as possible) record ANY DRMed music. Just make a playlist, plug in the patch cable, set up your recording program to record from the mic port, and press play. then you can split all the tracks and run ’em thru lame with some ID3 info and you’ve got non-DRM music. With those monthly fee – unlimited download services, you can make a sizable contibution to yur library for less the $20 USD.

Andrew says:

What a Pity

“There hasn’t been any good music recorded in over 30 years”

What has this world come to? Music is like free speech, it should be free to hear, and free to express. Turning Music into a business ruins the whole point making it / listening to it. It shouldn’t be treaded upon lightly.

If we would take the Business side out of music, people might actually ENJOY buying a new album when it came out. Reason? The music would be GOOD, people would have a DESIRE to own a piece of it, and we all would CRAVE that wonderful glow music would give us upon listening.

There is NOTHING like putting in a new cd of a band who you know makes music for the purpose of making music not money, and basking in the wonderfulness of the filling and renewing of your very soul

I think the RIAA and MPAA should back off, and work to stop and sue those who just want fame and fast cash instead of good music. And all will be well when they form the business model of letting music SELL ITS SELF, instead of…

“pushing crap music on the world”

Anonymous Coward says:

Re: What a Pity

Hey, look, a Hippie!

/waves at the nice hippie!

Guess what, this is a capitalist (sp?) world we live in. Free speech does not, and has NEVER meant free to hear. The Speaker has always had the right to charge to be heard. Free speech means he has the RIGHT to say what is on his mind.

Music has absolutely no need to be free to be listened to. (Neither do movies.. However, you should be paid handsomely for every episode of friends you have ever been forced to watch by a friend/loved one….)

Mike J says:


I have done the exact same thing with my old audio cassette collection. I actually ran the output of the tape player thru an equilizer to try and sligtly compensate for the magnetic loss of the recorded media. It makes for decent copies for my computer that I can listen to without dragging out the dusty old tape player everytime I want to listen to my old music.

I also have one suggestion to the music industry, CD’s last too long remember the days of the needle wearing thru a poor quality vinal LP or the magnetic loss of an audio cassette. Just think go back to the old days of recording and people might have to buy new copies of your crappy new music after they leave it in the car and warp the media every couple of months.

LOL just kidding.

Locking media into a streaming only wont stop recording it into mp3 either unless they force sound card manufacuters to stop putting features like a line in or record wave out or mixed output whatever its as easy as play/record. Hey reminds me of the days I used to record radio onto cassette. shhhh dont tell the music industry I recorded fly like an eagle back in the 1980’s.

The root cause to all problems is GREED, music industrialists want more money money money and people want more stuff stuff stuff which drives people to crave money money money for more stuff stuff stuff…….

Got to go, need to get some money to buy some stuff…

Anonymous Coward says:


Personally, I can care less what the riaa does. There will always be a 3rd grader out there able to think up a way to bypass their latest and greatest way to stop us from burning.

Piracy is going to happen. Deal with it. Find a way to make the consumer WANT to buy the real version. Something like special artwork or stuff like that. Remember when everything was on vinyl and artists actually used it as a canvas to impress us??? That’s what made it worth buying.

As far as a capitalist world??? No. If we were in a capitalist world, then the economy would dictate how much things cost instead of the government. If you think the economy is leading the prices…you’re mistaken. The world leans more towards socialst then capitalist.

Lay Person says:

Re: Interesting...

For sure.

Governemnt and money were NEVER intended to mix, not even by the founding fathers themselves.

It was only around the turn of the last century where banks and the wealthy snuck into our government and mixed the pot to such a degree that we no longer even have a resemblance to a democratic government rooted in the constitution.

Once upon a time there was a civilisation ruled by law and honour. The law worked because its institutions were authorative, and through general concensus they were recognised as such. They were honoured. Then one day the rulers of this great civilisation, so sure of their power, respect and the absolute faith the people had in their institutions laid back on their laurels and decided that for a little temporary wealth they could auction off that trust.

Anonymous Coward says:

the future

all record companies should be done away with, the technology exists for bands to create their music any why they want without the help of a large corporation. to get money they just need to tour, which is how they get most of their money today, and donations, which is what real fans of a band are doing when they go out and buy their cds today. the world would be a better place.

BillDivX says:

2 things.

first. I think we can safely say that the only music transaction the RIAA will be ok with is you spending 18 dollars at tower records, several times if you want it on your many devices.

second. the music industry is NOT GOING to get it. it’s too big. These are public companies, which must answer to shareholders for their profits (or lack thereof). Shareholders don’t like to hear that they lost thousands of dollars because the company took a risk on an up and coming innovator in music. They’d rather milk the tried and true crap that they know they can push on impressionable teenagers.

Large corporations being in charge of choosing whos music deserves to be heard, will never lead to anything but over-produced, generic crap. Real good music is out there, but it’s not in the mainstream. it’s underground. it hasn’t been mainstream since the early 70’s. Once classic rock exploded and companies made millions on rock, they weren’t willing to let go of it and allow innovation to continue. Same crap as microsoft not wanting to let go of control of windows, for fear that they wouldn’t be able to control the industries innovation, and therefore, be left behind from lack of agility.

However, I think, in the end, as the internet invades more homes, and more people begin to understand technology, slowly, they will be left behind anyway. In 10 years, there will be new ways to get famous as a band, that don’t require selling your soul to a major corporation. It’s starting already, in the form of places like myspace. Right now people view them mostly as “high school kids” on there, making friends and dating, but a lot of musicians are on there, social networking their way to fame and fortune. It needs a better model to support it, but the grass roots movement is there right now.

Customer is always right says:

The biggest threat

the music industries biggest threat is truth. The real reason why the music industry moans and groans about how priracy is because they want what they had before back. They want to the one hit wonders to still sell a full cd of crap songs so the end consumer gets one song they like and 14 they hate. If the end consumer can now buy the one song and not the rest then they lose out it’s as simple as that. And when the big wigs execs in the music industry lose money then that cuts into the cash they can spend on their drugs.

And lets face it a drug addict without their fix can be a scary thing and the government knows this…

Ether Hour (user link) says:

Why CDs?

Why couldn’t the business model move away from the sale of CDs being the primary income generator. I say they should go along with the free digital distribution to reach magnitudes more fans and simply shift the profit center to live shows and other creative $$ extracting ideas. Obviously the business of selling recorded music is getting way too complex. i.e. what indie bands are doing already… free album download at

BillDivX says:

the reason that music companies are afraid is...

from my example above. Companies not being needed by musicians anymore, because eventually the internet will form a model by which music can be discovered more directly. The music companies are desparately trying to hold us back, not because they couldn’t come up with a viable business model to sell music on the internet, but because they know that going down that path will eventually cut them out of the loop entirely. Music publishers that are the kind protected by RIAA, are just the middle men of the music business, they buy the rights to a product and distribute it. And it’s a middle-man arrangment that musicians have a long history of hating. These companies are afraid of the internet because it offers an opportunity to eventually cut the middle man entirely. It doesn’t just take away their way of selling a product, it will eventually take their product away entirely. Their “product,” if given an alternative, would love to do without them, and they see that such an alternative is on it’s way. The only way they can slow that down is to hinder the innovation that is driving it. and the best way to do that? lawsuits and DRM on all the current music that is being used to build and establish that innovation. It has nothing to do with piracy. It has everything to do with them being a middle-man, that, until now, existed only because it was a necessary evil. The evil is no longer necessary, and it is afraid, therefore, it is becoming more evil.

Lay Person says:

Re: the reason that music companies are afraid is.

I completely agree with you.

Their executives might learn a lesson from Adolph Hitler:

After the fall of the THIRD RIAACH,

Crawl down deep inside your corporate bunkers, surround yourself with your dearest attorneys and bite the pill.

P.S. Reich was deliberately misspelled for all you English geniuses (just in case).

David says:


I digress of the comment that lala will not be successful. People on lala tend to get the cd’s, burn them, and place them right back into their ‘have list’ which means that they will again put them up for trade. I suspect that only the cd’s that people really want to keep will not be placed back into lala. when it is as easy to trade cd’s as it is on lala, and people have only invested but a dollar fifty into the cd itself, i think that they are very much more likely to burn the cd and make it available to the public again. Lala is going to be an incredibly sucessful service.

Boris Jacobsen says:

It's about time....

It’s about time this paranoia by the music industry was taken to it’s logical conclusion. Let’s not hear the music AT ALL without paying. EMI, Warner Brothers, Sony & all – stop promoting the shit bands you generally sign altogether. Don’t even let us know they exist unless we pay you. That would suit me just fine.

Big #1 (profile) says:

My comments on these comments

Having read a few of the comments, I would like to know. Why do you think the music industry wants to put very restricted limits on what we can do with the CDs we buy?

If the music you want is not worth what they are charging, don’t buy it. If everyone did that, a CD would be priced more reasonably or have more value (better mix of songs). Because something is overpriced does not justify stealing it!

You may be young and don’t understand this right now, but some day, you will make something or be involved in making something. You may get “downsized” because people start stealing the product and justifying it by saying it costs too much. You will feel different!

Anonymous Coward says:

I listen to music in 2 places… In my house from PC and in my car. The CDs stay in the car and all my music in the house is organized on my PC as MP3s. I see no crime in this, I paid for the CDs, and I am just saving bring the CDs back and forth.

And no I do not share them online. (In case you are wondering : -)

Wizard Prang (user link) says:

Re: Well said

There is nothing morally wrong with repurposing your stuff, which you paid for, for your own enjoyment.

Ripping a CD, selling it and keeping the copy is a less defensible position.

During the vinyl days, the music business got used to people buying the same record several times as they wore out; digital music does not wear out, and they are having some difficulty adjusting to this.

Jerry (profile) says:

The Fine Print

The reason that Big Media is so upset is buried in the fine print. A good example is that if you bought a Sony CD last year, you agreed in the shrinkwrap license to erase all copies if you sold, lost, or gave away the original CD. A curious provision was that you agreed to erase the copies if you declared bankruptcy even though you might still retain ownership of the CD.

BillDivX says:

All of these are valid, however

As an artist myself, I have first hand knowledge of how the industry treats ARTISTS, and they treat their “product” even worse than they treat their consumers. In fact, they treat their “product” as exactly that, a product, and not a human (or group of humans) with feelings, motivations, inspirations, and opinions which need to be cultivated in order to promote the songwriting process. Big corporations run by shareholders don’t understand this. They think it’s an assembly line, where you can come up with a “design” for a style of music, or something, and then churn out a billion of them.

I have heard, and sometimes witnessed, the horror stories that a record label can wreak upon a newly signed band. Some stories of the worst accounts are to be found on the internet if you search around. Here’s the deal:

they send someone who seems young and cool, the kind of guy a band would least expect to screw them over. The problem is, the guy is just an assistant for the real guy, they hire him BECAUSE he’s naive. Even HE doesn’t realize he’s about to royally screw you over. Then they get you to sign a contract. Except what you sign isn’t a contract for how much money your going to earn, how many records you’ll produce, etc. It’s just a contract saying that you agree to sign with them. Essentially, they trick young, naive artists into signing a contract that forces them to only sign with that label, before they’ve even agreed to any terms. That band is then forced to negotiate with THAT label, come hell or high water, until a real contract is made. The band’s time is consumed with the negotiations, for months, until they’ve lapsed their practice schedule, had numerous fights, and generally don’t want to play together, or don’t play very well anymore. they then go into a studio, unprepared, and cut a mediocre record, in a too short schedule, and get a tiny little cut because they signed away their right to take their business elsewhere, before they even had a chance to negotiate the terms of their payment.

Because of this ungodly lame process (there are other ways to get signed that are safer, people like me know this, know the legal, and won’t get screwed, but young high school kids getting their first break don’t know any better, and it kills any artist to see a band with huge potential ruined because they didn’t know what they were getting into). MOST OF THE BEST BANDS IN THE LAST 30 YEARS, YOU”VE NEVER EVEN HEARD OF. They tore up the amateur scene, built a huge underground following, without anyones help, because they were just that good. And then died out at the hands of the record label, before their first disc even hit store shelves. This is 90% of all the best bands that have existed, since about 1965.

EVERY experienced artist knows that it works this way, and that’s why every single one of us simply CANNOT WAIT for the day when we don’t need them anymore. The labels see that day approaching. And they ARE afraid. It’s one thing to have your product stolen, or to lose a chunk of your consumer base. Those are certainly bad things, but you can recover from them, by rethinking your business model. But, a far more critical hit to their business, is if your product itself simply gets up, and walks away.

Equivalent to a software company, imagine if all the programmers came in one morning, and discovered that ALL the code, and ALL the docs, had simply been deleted. It’s a death blow to the software company. Forget rethinking the sales model, or the marketing model, their ability to even produce a viable product is now gone.

What this means, is that it reduces these companies to only one aspect of their business: advertising. When Bands no longer need the label to finance their album, or their concerts, it no longer becomes worth it for the bands to give a major share of their earnings (and control of their creative process) to what is essentially a middle man. The bands can now earn far more money, by directly hiring an ad agency to promote them. They pay the ad agency, and now the BAND is in control of their destiny. GREAT for bands. bad for record labels. The days of the specialized record label are almost over. Right now, the label arranges everything, and gives the band a cut (royalties). You’ll hear far more good music coming out when the bands are in control, and just pay for services, based on how much they are earning.

finally, as an artist, I most definitely encourage music sharing. It would only serve to make me famous without needing to sign with a label. As many artists are now realizing, if they go into it expecting that situation, they can plan up front to make their money from concerts and merchandising, and do VERY well indeed (mostly because the label isn’t hogging 95% of the profits).

Note that this is the exact situation that the Movie industry is also in, and their tactics for survival will need to be the same. Become a service to the artist, instead of owning and controlling the artist. The artist now has a choice to maintain control, and every artist (by the very nature of a creative thinker) will want to maintain that control, if given the choice. And the reasons for wanting that control are simple. One only need look at all the crap music, and crap movies, that get made when artists give up that control.

Chris (user link) says:

Re: All of these are valid, however

Chordcraft Music Company is working on specific products to help the terrible situation that currently exists in the music industry. It’s about the music, and the systems currently in place seem to only polute the quality of music that is created. Support Chordcraft and their mission by going to and signing up.

torrent lover says:

open up new music

the record companies need to embrace the p2p world, by downloading torrents of bands im interested in (or by borrowing a frriends cd to rip on my mp3 player) i in hand have gone to 5-6 concerts this year (ticket price from 30-50 USD) to bands i would not have in the past. the record companies should use CD/digital downloads as a way to get the “word” out about thier artists so people will go to the concerts and but the tshirts and posters and all that good stuff. the RIAA is so far behind what is really happening its amazing. also how is downloading a torrent or borrowing a cd any different then when back in the day i could copy any tape i wanted??? there isnt any differance…long live the pirates!!!

Tower Records (user link) says:

Why don't they sue Tower for illegal file sharing?

Look at this page at Tower Records! What is stopping anyone from enjoying this music without paying for it (other than personal taste?) Just click any of the tracks and sample it. The RIAA seems very selective about who they go after. The real problem here is that the music industry’s model will never be able to scale with the rest of the networked culture. For that single reason they are trying to extinguish the great benefits of being connected inherited by the innovative world of people. They would be more than happy if their buddy Tower Records scaled to the size of the average dorm room deployed P2P network. They’ll never make it though, and the music corporations will see their capital positions evaporate in inverse proportion to the scale of common connectivity. They had better get on the right side of this market.

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