Why can’t you rent CDs in the U.S.? I’ve heard it’s illegal and that a case challenging this is winding its way through the courts. In Japan it is legal, there are something like 6,000 rental outlets, and per capita blank tape sales run twice the U.S. total, with original CD sales much lower than in the U.S. What nefarious group allows videos to be rented, but not CDs? Where is the logic in law in all this? –Charles Loengard, New York
Listen, Charles, that affronted-consumer bit might work with your impressionable friends, but don’t try it with me. The copyright laws in the U.S. and most other countries (but not Japan) make it illegal to rent recordings, for the simple reason that otherwise everybody would rent albums for a fraction of the sale price and copy them for cheap on blank tape. Sure, you can do the same with videos, but you need two VCRs, and anyway, who besides three-year-olds hooked on Bambi watches a movie more than once? On the other hand, anybody with a CD player and a tape deck can copy a compact disc, and lots of people replay their favorite tunes ad nauseam, e.g., anything by the New Riders of the Purple Sage, beloved by the flower children who rented the apartment next door to me at college. To this day the mere thought gives me the shudders. But I digress.
Things are different in Japan because that country’s copyright laws don’t forbid recording rentals. In 1989 there were 6,200 CD rental shops in Japan, which the music industry claimed cost it a billion dollars a year in lost sales. Worse, while rental-shop proprietors had to pay a royalty when they rented CDs by Japanese groups, they were under no such obligation for foreign recordings. After years of lobbying by the U.S., Japan amended its copyright laws so that foreign record companies could withhold newly issued CDs from rental until a year after release. The ban went into effect in April 1992 and decimated the Japanese CD rental business; by May the number of outlets had dropped to 5,200.
Do CD rentals really hurt CD sales? On the surface it seems so. CD sales per capita in Japan are only half what they are in the U.S., and blank-tape sales are much higher. But skeptics point out that Japanese record sales per capita were 51 percent lower than in the U.S. 20 years ago, long before there were rental shops or CDs.
The record industry and the U.S. government have been attempting to stamp out recording rentals in other countries via the GATT (General Agreement on Tariffs and Trade) talks, so far with mixed success. Rental shops are said to be increasingly common in Italy, the Netherlands, and Australia. Now another threat is looming: digital broadcast of albums via radio and cable TV, coupled with improved digital-cassette technology. Some think the industry might as well wake up and realize its business is making recordings, not records (or CDs), and focus its efforts on extracting royalties from consumers who essentially do their own manufacturing using home recording equipment.
Still, the fact that more home recording of albums is inevitable doesn’t mean you have some God-given right to do it for free. Cecil recognizes that in saying this he is defending the right of millionaire music moguls to make obscene profits that they will undoubtedly spend on drugs, swimming pools, and personal trainers. Tough–the copyright laws also protect deserving gentlepersons such as your humble columnist. It may be that if a reasonable royalty arrangement were established the music industry could make even more money from CD renters who currently can’t afford to buy as many CDs as they’d like. But just because they could do it that way isn’t to say they have to.
Art accompanying story in printed newspaper (not available in this archive): illustration/Slug Signorino.