Legal Issues

by Mike Masnick

Filed Under:
promotional cds

ebay, eff, universal music

Who Really Owns Promotional CDs?

from the and-who-can-sell-them? dept

In my collection of CDs (and, yes, I still buy CDs), there's a relatively large number of "promotional" CDs -- many of which were purchased at independent record shops or online. It's not uncommon at all to find such CDs for sale, despite warning labels that say that cannot be sold. I've often wondered how enforceable that claim is, and we may soon find out. Universal Music claimed copyright infringement against a guy who was selling promotional CDs on eBay and eBay took down the auctions. The EFF is now suing Universal Music, claiming that it's a misuse of copyright law under the first sale doctrine (which says, like with any traditional good, you have the right to resell a digital good). Universal Music's response is that the CDs are actually still the property of the record label, and merely licensed to whoever received it. Of course, that could open up a ton of legal questions about ownership of certain goods -- especially if the receiving party never agreed to the deal. In the meantime, though, it's yet another case that highlights the blurring lines of ownership over tangible goods as makers of such goods try to make them more like digital goods.

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  1. identicon
    James Stewart, 10 Aug 2007 @ 6:58am

    The REAL story.... Written from a label guy...

    Promotional CDs are marked as such for many reasons, and none of these have been mentioned in this article or the comments...

    By marking CD as Promotions and "Not for Sale" the label can take a tax break on them. They're considered advertising to some degree, and not potential income. They can take those as a loss, but still gain the benefit of the exposure.

    The artist actually has to PAY for those CDs, as is stated in their contracts as "Free Goods". It is considered a business expense.

    If the Label were to GIVE the CDs away, there would be different tax implications, so by marking them as the property of the label, and returnable upon request, they retain this benefit.

    So legally, they ARE the property of the record label. Cry all you want, bitch all you want, but it's been that way since the beginning of recorded music.

    This is an OLD story, written by someone with no knowledge of how the music industry works (as is typical these days, and so sad... )


    This is really nothing new. In the first days of radio, the DJs were given Vinyl records instead of the shellac records that the public would buy in the stores. That's how the labels new they were the promotional copies. The Vinyl wouldn't break when you were rough with it (which made it better for multiple plays, and DJ handling), whereas the shellac would shatter easily. Eventually, the public got a hold the Vinyl records, and demand grew for a product that was more durable, so Vinyl was made available to the public.

    Then the record companies started using plain white sleeves and labels on the 45s to identify them as promotional copies. Some labels (including mine) even made the record a completely different color so they could easily identify the promotional copies.

    Promotional copies are NOT supposed to be given away by radio stations! They are supplied with a large quantity of FREE, REGULAR CDS. The promo copies are for air play only.

    This has changed slightly for each format that has come along, but the business practice has always been the same.



    If something is MINE, you CAN'T sell it! Period.


    Well, I need to go do some work. Today I'm uploading several Platinum albums to iTunes so consumers can buy some of the best music ever made (Johnny Cash, and several others of that caliber), at a DRAMATICALLY reduced quality, for tons less then the music is worth.

    Gotta love the music biz.

    Don't forget to support your local music scene!



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