Selling Of Promo Records

[Guest]

https://news.bbc.co.uk/1/hi/business/7412671.stm

[Guest Awake 502]

It's not every day that record companies are accused of behaving like goblins in a book by JK Rowling.

But that is just one of the more colourful accusations being bandied around in a US legal battle that could have implications for many people's private CD and LP collections.

It all began in May 2007 when Universal Music Group (UMG), the largest of the Big Four companies that dominate the music industry worldwide, sued a Los Angeles-based trader on the eBay online auction site.

The target of the legal action, Troy Augusto, runs a business called Roast Beast Music Collectables.

He makes his living by snapping up rare albums in second-hand record shops and selling them on eBay.

Universal is taking him to task for copyright infringement, saying some of the items he offered for sale online were promotional copies and not authorised for sale to the public.

But digital rights lobby group the Electronic Frontier Foundation (EFF) has taken up cudgels on Mr Augusto's behalf and is counter-suing Universal.

"UMG seems to think that the promotional use only label somehow gives it eternal ownership over the CD," says the EFF.

"While this might make sense to a goblin living in Harry Potter's world, it's not the law under the Copyright Act."

Not transferable

If, like Mr Augusto, you frequent specialist music shops or other outlets selling rare releases to collectors, you may have acquired promo albums or review copies that record labels send out to journalists and radio stations before the regular editions go on sale.

They can be recognised by markings such as "For promotional use only" or "Not for resale", visible on the record or CD artwork and sometimes on the disc label itself.

Record companies have long maintained that they continue to own these items and can ask for them back at any time.

Now, because Mr Augusto's online auctions contained some of these promotional discs, the argument is close to being tested in court.

In legal documents filed in the US District Court for the Central District of California, UMG's lawyers allege that "[Mr] Augusto's unauthorised distribution of the UMG promo CDs violated UMG's exclusive right to distribute its copyrighted works".

Among the promotional items listed as sold by Mr Augusto, according to the legal brief, are titles of CD singles by Nelly Furtado and rap group Bone Thugs-N-Harmony.

Listing removed

Although the outcome will apply only to US law, the case is being watched keenly in the UK, where record shop owners and eBay traders report similar treatment at the hands of music companies in the past.

One trader, who has asked to remain anonymous, told the BBC he recently had a promo CD removed from eBay that was on sale for a couple of pounds.

"I was clearing out some cupboards and decided to list a CD single on eBay that had been handed to me by a friend quite some time ago.

"The very next day, the listing was removed and I was astounded to get an e-mail from eBay, bristling with terms such as 'illegal, pirated, copyright law, violation, content protection' and so forth.

"I can understand it if I had been selling a crateload of bootleg live CDs, or had burnt off albums worth of official studio stuff and was trying to sell them as if they were new and originals.

"There was also a sinister hint from eBay that if I ever put on a promo single again, then I could have my account with them suspended."

"This seems like both the record labels and eBay taking a hammer to a nut, although eBay are probably terrified of any action from the media companies."

Reading eBay's policy on promotional items does little to clarify the issue.

The UK version of the auction site says: "eBay policy does not specifically prohibit the listing of promotional items, but you should be aware that many rights owners take the position that the listing of such items is a copyright infringement."

"Listing such items could therefore result in the ending of your listing if a member of our Verified Rights Owner Programme (VeRO) reports the items as infringing their rights."

Ambiguous attitude

Clearly eBay is making efforts to comply with the record companies' wishes on the sale of promos.

The problems is that the companies' own attitude is, at times, ambiguous.

One long-established second-hand record shop, Beanos of Croydon in south London, fell foul of the major labels when it advertised promos for sale through one of its eBay outlets.

The shop's proprietor, David Lashmar, points out that the record industry seems happy to let promos from the 1960s or 1970s go up for auction, but has chosen to crack down on newer items.

"Back in 1992 or 1993, Sotheby's had on the front of their rare record catalogue a record by the Beatles, Love Me Do," he says.

"This was a seven-inch single marked 'promotional copy, not for resale' and it went for £15,000."

"Now I suggested to the Mechanical Copyright Protection Society that they might like to go back to Sotheby's and ask for the money back, because this is still subject to the same rules that modern promotional items are."

"We have sold recently, on eBay, many promotional records for tens of thousands of pounds in total. That doesn't seem to be a problem because they are 30 or 40 years old.

"Suddenly, if you are trying to sell something which is a promotional item made in the last few years, that seems to incur their wrath."

"Maybe we should sit down and decide where the break-point is when it becomes a collectable, non-promotional item any more."

Mastery of objects

Back in the US, the Electronic Frontier Foundation's case against Universal makes extensive use of JK Rowling's work, with a brief that begins with a lengthy quotation from Harry Potter And The Deathly Hallows.

"To a goblin, the rightful and true master of any object is the maker, not the purchaser. All goblin-made objects are, in goblin eyes, rightfully theirs," as Bill Weasley explains to Harry in the book.

"They consider our habit of keeping goblin-made objects, passing them from wizard to wizard without further payment, little more than theft."

It's an attitude that does seem to sum up the record companies' approach to promos - but it's far from clear whether the US courts will take the same view.

Edited June 4, 2008 by Awake 502

[Guest lifeandsoul]

dunno bout all that but some promos (CD) that i have had over the past year or so have had some kind of personal identifier linked straight back to me. I even had one that every couple of mins is interjected by - this promo cd is the property of Mike Ashley - or words to that effect. Quite cool for a minute but actually extremely irritating.

[Harrogatesoul]

It's a complete joke really esp on the older items. I can see why the record companies are miffed at the new releases but really in the grand scheme of things its pennies.

The identifiers on the CD's mentioned in Life&Souls' post are common esp on console games. When I used to manage HMV stores one of the games buyers got sacked for selling all the promos on ebay which had tracking numbers on. I dont think anything will come of this - certainly not for original vinyl (I hope!)

Rich

[Steve G]

https://news.bbc.co.uk/1/hi/business/7412671.stm

Yeah record companies have always got snotty about re-selling promos, and they do over here occasionally. As for a lawsuit, I am afraid in California there are people that would sue someone for coughing in earshot. It's a wacky place so it doesn't surprise me that some zeleous lawyers have filed. It's a tricky one though as we're back into the royalties argument.

Edited June 4, 2008 by Steve G

[Ernie Andrews]

It's a complete joke really esp on the older items. I can see why the record companies are miffed at the new releases but really in the grand scheme of things its pennies.

The identifiers on the CD's mentioned in Life&Souls' post are common esp on console games. When I used to manage HMV stores one of the games buyers got sacked for selling all the promos on ebay which had tracking numbers on. I dont think anything will come of this - certainly not for original vinyl (I hope!)

Rich

I am sorry but if a precedent is set then it will apply to all where the rights are owned. How do you distinguish between whats acceptable because it is 30 years old and whats not acceptable because it is 5 years old. It doesnt work like that . Where is the age cut off point? 10 years 11 , 12 , 13 , 14 ,15 - I am sure you undertsand my point.

I actually hope the Big companies fail

It looks like legal minefield- Simple where the beatles or other 45s that have the big A on them and the writing eg Not for sale but what about the EMI ones that just had a sticker - How could they prove that was a promotional copy - If the sticker has been removed!

Remeber alot of what we think are obsucre records are actually listed with these big companies as rights owned. Its going to be fun!

[Harrogatesoul]

I understand the legality of it Ernie - Your right. It just seems like a complete minefield and the sheer logistics of it are huge. Funny it comes at a time when the 'traditional' record companys are finding times a little tougher in the digital age. Funny how ebay OR the record companies haven't stopped all the bootlegs being sold on ebay though isn't it?

Rich

[Mark B]

dunno bout all that but some promos (CD) that i have had over the past year or so have had some kind of personal identifier linked straight back to me. I even had one that every couple of mins is interjected by - this promo cd is the property of Mike Ashley - or words to that effect. Quite cool for a minute but actually extremely irritating.

ere you sure these are not just the voices in your head

mark

[Guest Paul]

Interesting thread but some confusion here...

Promotional items are issued without charge and therefore no artist royalties, licensing royalties or mechanical royalties are payable, so the reference to MCPS in this thread isn't relevant.

Further confusion arises because many items are issued free for promotional purposes but are not actually identified as such. Also, some record companies actually sell items which are marked as promotional - it happens a lot with soul music.

The two big problems here are (1) that there probably wasn't an agreement between the record company and the original recipient of the promotional item, and (2) the original recipient may have transferred the item to a third party who wouldn't be aware of an agreement even if there had been one!

This all sounds like bullying by lawyers and business affairs departments with nothing better to do. And the fact that it involves UMG (the biggest of the big four majors) goes to show how much they have lost touch with reality.

I could understand it if they objected to people selling promo items which are new or recent enough to harm the sales of legitimate retailers but this is ridiculous.

Paul Mooney

Edited June 4, 2008 by Paul

[Guest Paul]

I believe that if a major company employs too many lawyers and business affairs people, some of them may have nothing much to do so they will find something to do to avoid losing their highly-paid jobs.

And that sometimes means they'll take ridiculous legal actions against ordinary people who are easy targets.

The huge irony is that these bullies seem to do very little or nothing when it comes to bootleggers and organised criminals!

They should go back to chasing ambulances.

Paul Mooney

"What this world really needs is more lawyers!"

[Guest]

It's a very interesting point that there is NO agreement between the Record Co. and the recipient.Therefore the Record Co.s are "giving away" their promotional items.If you give something away,surely it is a gift.

If you want to sell "your" property ,then surely (and evidently) you can.

Also if they stop you selling your promo items,it will probably 3-fold their value on the "black" market.Your demos of Darrel Banks,James Dockery etc etc are safe as....I can imagine queing-up to hand back a box of British Sue label demos to the corporate offices of "whoever",because they've all been called back.

Scary thing is these Co.s have the "power"it would seem to dream-up any stupid idea and push it through law - I bet they win.Next thing they'll need is "Demo inspectors"who's job will be to go round allnighters and record fairs/collectors seizing back records. This would also be a huge plus for the "cover-up"enthusiasts.....just cover-up every record you have and if you decide to sell.....psst by-the way "its a demo"

[grouse]

It's a very interesting point that there is NO agreement between the Record Co. and the recipient.Therefore the Record Co.s are "giving away" their promotional items.If you give something away,surely it is a gift.

If you want to sell "your" property ,then surely (and evidently) you can.

Also if they stop you selling your promo items,it will probably 3-fold their value on the "black" market.Your demos of Darrel Banks,James Dockery etc etc are safe as....I can imagine queing-up to hand back a box of British Sue label demos to the corporate offices of "whoever",because they've all been called back.

Scary thing is these Co.s have the "power"it would seem to dream-up any stupid idea and push it through law - I bet they win.Next thing they'll need is "Demo inspectors"who's job will be to go round allnighters and record fairs/collectors seizing back records. This would also be a huge plus for the "cover-up"enthusiasts.....just cover-up every record you have and if you decide to sell.....psst by-the way "its a demo"

No it's not. it's an issue with a mis-printed label

[Ian Dewhirst]

I believe that if a major company employs too many lawyers and business affairs people, some of them may have nothing much to do so they will find something to do to avoid losing their highly-paid jobs.

And that sometimes means they'll take ridiculous legal actions against ordinary people who are easy targets.

The huge irony is that these bullies seem to do very little or nothing when it comes to bootleggers and organised criminals!

They should go back to chasing ambulances.

Paul Mooney

"What this world really needs is more lawyers!"

Couldn't agree more with your last two posts Paul! Bang on mate!

I had a Jeff Buckley white-label test-press of the "Grace" album on E-Bay a few years back and got forced to take it down after Jeff Buckley's estate's lawyer contacted E-Bay, Sony-BMG and me personally. I got forced to take it down and flogged it the next day to one of five private collectors who contacted me privately as a direct result of E-Bay removing the item!

So a total waste of time, effort and money which had no real result except, strangely enough, for me.

You'd think they'd have bigger fish to fry wouldn't you? Probably a lot of man hours wasted plus a large legal services retainer bill no doubt and all for what?????

Just crass stupidity IMO.

Ian D

[Cunnie]

Interesting thread but some confusion here...

Promotional items are issued without charge and therefore no artist royalties, licensing royalties or mechanical royalties are payable, so the reference to MCPS in this thread isn't relevant.

Further confusion arises because many items are issued free for promotional purposes but are not actually identified as such. Also, some record companies actually sell items which are marked as promotional - it happens a lot with soul music.

The two big problems here are (1) that there probably wasn't an agreement between the record company and the original recipient of the promotional item, and (2) the original recipient may have transferred the item to a third party who wouldn't be aware of an agreement even if there had been one!

This all sounds like bullying by lawyers and business affairs departments with nothing better to do. And the fact that it involves UMG (the biggest of the big four majors) goes to show how much they have lost touch with reality.

I could understand it if they objected to people selling promo items which are new or recent enough to harm the sales of legitimate retailers but this is ridiculous.

Paul Mooney

Hmmm,

Dodgy ground here then.

Does this mean that recent re-issues like Grapevine, Realside etc ain't paying any royalties on the demo's that they are selling for double the price of the issues?

Also should these so called demo's be for sale at all?

Thought a demo/promo was to promote the record & not to make a quick killing on.

[Ian Dewhirst]

Hmmm,

Dodgy ground here then.

Does this mean that recent re-issues like Grapevine, Realside etc ain't paying any royalties on the demo's that they are selling for double the price of the issues?

Also should these so called demo's be for sale at all?

Thought a demo/promo was to promote the record & not to make a quick killing on.

Canna worms Cunnie!

Ian D

[Guest Paul]

Hmmm,

Dodgy ground here then.

Does this mean that recent re-issues like Grapevine, Realside etc ain't paying any royalties on the demo's that they are selling for double the price of the issues?

Also should these so called demo's be for sale at all?

Thought a demo/promo was to promote the record & not to make a quick killing on.

Not necessarily.

Some labels may abuse the system but I do know that Grapevine, for example, paid royalties on all copies pressed, regardless of whether they sold or not. For 7" singles they usually obtained a "license to press" and the licenses covered higher quantities than they needed. In effect, the licensors were paid for more copies than were sold.

As such, many of the promo copies are "vanity" records - the same as limited editions, numbered editions, etc.

If a company sells a promo copy and pays royalties on it, then they haven't done anything wrong. All they have done is satisfy the collectors demand for "promo" records.

On the other hand, however, I know of some companies selling promo copies which are not accounted for as far as royalties are concerned. That's a scam which is quite common on a small scale.

Best regards,

Paul Mooney

Edited June 5, 2008 by Paul

[Hold Tight]

appologies if this has been flagged elsewhere - if not have a read though. Could have implications worldwide and not just USA.

Shortcut to: https://news.bbc.co.uk/1/hi/business/7412671.stm

[Guest]

appologies if this has been flagged elsewhere - if not have a read though. Could have implications worldwide and not just USA.

Shortcut to: https://news.bbc.co.uk/1/hi/business/7412671.stm

Thats four topics dealing with the above !!

[Deegee]

Thats four topics dealing with the above !!

it is interesting stuff though - bloody corporations - they missed out by not promoting the record enough so tough I say - let someone else make a few pence. Greedy fookers!

[Ian Dewhirst]

Not necessarily.

Some labels may abuse the system but I do know that Grapevine, for example, paid royalties on all copies pressed, regardless of whether they sold or not. For 7" singles they usually obtained a "license to press" and the licenses covered higher quantities than they needed. In effect, the licensors were paid for more copies than were sold.

As such, many of the promo copies are "vanity" records - the same as limited editions, numbered editions, etc.

If a company sells a promo copy and pays royalties on it, then they haven't done anything wrong. All they have done is satisfy the collectors demand for "promo" records.

On the other hand, however, I know of some companies selling promo copies which are not accounted for as far as royalties are concerned. That's a scam which is quite common on a small scale.

Best regards,

Paul Mooney

Just like everything these days, you have to read the small print on ANYTHING. There's a reason why they always put contentious things into small print in the first place and that's mainly because:-

1) People can't be arsed to read it because it's inherently boring and general written in obtuse English which only lawyers can seem to understand and argue about.

2) Many of the clauses are cheap con tricks designed to defraud with a piece of paper rather than a gun and are often immoral and

bordering on the grey side of the law IMO.

3) KNOWING that most people aren't lawyers and hate anything boring like small print, most companies cram as much confusing,

contentious stuff in there on the basis that 99% of the customers will have no idea what the small print means anyway.

4) Most people would prefer to spend their hard-earned money on something other than wealthy lawyers @ £250 per hour.

I always remember that famous deal with Prelude in the 80's when CBS UK managed to get a zero royalty for UK 12" sales in the contract on the basis that the 12" format was a promotional tool LOL. In fact the majority of Prelude's UK sales were on 12" in the early 80's - maybe 80% of them in fact. Yet none of those sales were accounted for because of a slick contract insertion.

In this instance, both the US record company and the artist got deprived of royalties on the vast majority of their sales (I think 12"'s were wholesaling @ £1.99 dealer back then as well).

Really, if you're an artist you're generally at the bottom end of the food chain!

Don't ask me how all this is possible in this enlightened day and age, but apparently it is. Weird ay?

Ian D

Edited June 5, 2008 by Ian Dewhirst

[Gene-r]

Can't believe record companies can be so anal about demos. What next? BPI organised dawn raids on boot fairs, charity shops and record fairs/dealers?

Edited June 5, 2008 by Gene-R

[Mike]

all 3 threads merged into one

[Guest Paul]

Just like everything these days, you have to read the small print on ANYTHING...

Ian D

I must admit I usually get a bit worried when a contract says "the Customer is hereinafter known as the Victim".

That's always a bad sign.

Paul Mooney

[Ian Dewhirst]

I must admit I usually get a bit worried when a contract says "the Customer is hereinafter known as the Victim".

That's always a bad sign.

Paul Mooney

And funny that as I was writing that diatribe it came on the news that many people's loan/mortgage insurances are worthless - apparently two million of 'em because of 'the small print'.

Do you think they print it small so that people can't read it LOL?

One of the nastiest con-tricks of all time IMO....

Ian D

[Cunnie]

Not necessarily.

Some labels may abuse the system but I do know that Grapevine, for example, paid royalties on all copies pressed, regardless of whether they sold or not. For 7" singles they usually obtained a "license to press" and the licenses covered higher quantities than they needed. In effect, the licensors were paid for more copies than were sold.

Good to hear that Grapevine are paying the royalties to the artist & I never thought anything else but if they are selling these items for double the amount of the issue are they paying double to the artist?

As such, many of the promo copies are "vanity" records - the same as limited editions, numbered editions, etc.

So a promo copy ain't err a promo copy then is it?

If a company sells a promo copy and pays royalties on it, then they haven't done anything wrong. All they have done is satisfy the collectors demand for "promo" records.

Royalties ain't the issue though is it. Credit to the company if they do pay the royalties but surely a promo/demo or whatever you want to call it are made to give to radio stations, DJ's etc to promote the record & not to sell to punters for twice as much as they should be.

On the other hand, however, I know of some companies selling promo copies which are not accounted for as far as royalties are concerned. That's a scam which is quite common on a small scale.

Could you please tell us who so we know to avoid these in the future.

Best regards,

Paul Mooney

[Guest Paul]

Hello Cunnie,

Every case is different so we can't generalise without specific inside information.

You're right to say that a promo copy isn't always a promo copy. In many cases they are no different to limited editions, numbered editions, etc.

I don't want to name any of those who sell royalty-free promos as a deliberate scam because I'd need to back it up with hard evidence. Let's just say that I'm aware of some and have strong suspicions about others.

At the end of the day, however, there are some collectors who are only interested in promo copies. Wherever there is a demand someone will try to satisfy it.

Best regards,

Paul