Home / Music / Music Collectors Can Rejoice: Promo CDs Are Legal to Sell

Music Collectors Can Rejoice: Promo CDs Are Legal to Sell

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For years, up until about 10 years back when the digital music age started replacing actual music shopping, music collectors such as myself would find that cool underground record store in your local big city and scour its rows of CDs for some gems. But there were also special types of CDs stamped with gold lettering that said something to the effect of “property of the record company” and the usual warnings that you could be punished for selling them.

At the Boston place I went to, they were on sale for an incredibly low $6 usually and sometimes were available to purchase (with our without finished art work) weeks before the album was supposed to come out.

I always thought the selling and buying of such CDs was pretty bad-ass and was proud to find and partake in such activity. But in the back of my mind, I always thought there was a chance that the days of such transactions would legally come to an end.

According to the Ninth Circuit Court of Appeals last week, however, this will NOT be the case, I am happy to report.

In 2007, mega record company Universal Music Group (UMG) sued a music seller named Troy Augusto, who made money selling promo discs on eBay they gave him, saying that doing so violated the company’s licensing agreement banning any sale of such copies. In UMG vs. Augusto, however, the Ninth Court held up a 2008 lower court ruling in favor of Augusto that said promos were “gifts” under federal law, with this one also ruling in his favor that “having just a stamp on a CD label cannot a make a recipient abide by a licensing agreement. As a result, individuals may resell promotional CDs as they wish, regardless of warnings.”

UMG tried to get away with the weak argument that they transferred the license of these promos to Augusto and that he therefore violated copyright law bey reselling them on eBay, when in actuality they transferred not a license but ownership of those discs to him.

The other big legal issue here was whether the “first sale doctrine” protected Augusto, which says that consumers (or purchasers) can do what they want with items like music CDs, DVDs or books after they get transferred to them. The Court ruled it did, so in this case, the original copyright owner (UMG) lost its ability to control sales of its items once it gave them to another person like Augusto.

This news bodes well not just for music collectors but for music reviewers (such as myself) everywhere who are sometimes recipients of promo discs from public relations firms or record companies themselves. Sometimes I get multiple copies of one album and find myself asking whether I would get in trouble for selling them online, so I end up just giving the extras away to good friends or family.

Now, I (and scores of others) don’t have to worry about reselling promo CDs online or anywhere else, for that matter, because of this federal ruling. Score it a big win for music consumers everywhere!

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About Charlie Doherty

Copy editor/content writer for Penn Multimedia; print/web journalist/freelancer, formerly for Boston Examiner, EMSI, Demand Media, Brookline TAB, Suite 101 and Helium.com; co-head sports editor & asst. music editor at Blogcritics Magazine; Media Nation independent newspaper staff writer, printed/published by the Boston Globe at 2004 DNC (Boston, MA); Featured in Guitar World May 2014. See me on twitter.com/chucko33, myspace.com/charlied, & Facebook.
  • Charlie Doherty

    Ooops, that’s Glen with one “n,” sorry.

  • Charlie Doherty

    Thanks for your comments and story Glenn. And yeah, I’m hoping that nothing much changes too much with this ruling either, as far as label promo policies go, but some probably will tighten up. It’s inevitable, I think, anyway.

  • When I lived in L.A. a few years back, I always made a point to hit the used CD shops on Tuesday because that was the day all the local label reps sold their new releases on promo to the shops…so you could get pretty much any new release you wanted for half price or less.

    Good news that this ruling may be, I hope it doesn’t have a flip side of causing labels to tighten up their promo policies as a way around the rule. And as a reviewer, I refuse to accept digital promos that have no liner notes or info on the band (particularly if it is a new artist I’m unfamiliar with).

    There’s two sides to the issue really. On the one hand, you have the “promo whores” who sell everything they get without even listening to it. On the other, I get sent so much crap I don’t ask for that there is no way I could possibly listen to all of it. So when “the Stack” gets too high, I clean house by taking them to the CD store.

    Good article Charlie.