Record Industry Wants Royalties for Used CD Sales

The industry worries that the expanding used market is cannibalizing new-CD sales, as well as promoting piracy by allowing consumers to buy, record and sell back discs while retaining their own digitally pristine copies.

One proposed remedy being debated by record label executives is federal legislation requiring used-CD retailers to pay royalties on secondary sales of albums.

Used-CD shops typically pay customers between $3 and $5 for their old discs, then sell them for $8 to $10. New CDs can be priced as high as $18 apiece.

The focus on the used-CD market comes at a time when new-CD sales continue to stagnate in the United States. Total sales last year were about $13 billion, unchanged from 2000.

Sales have been hurt largely by a surge in piracy, which the National Federation of the Phonographic Industry estimates has cost the music business $4.2 billion in lost revenue last year.

It is unclear how big the used-CD market is because many retailers are mom-and-pop entrepreneurs who do not report sales. There also is a large market in used product at swap meets.

News source: News

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