Got a License for that CD?

Filed in archive Consumer Rights , Government , Retail , RIAA, IFPI on June 6, 2007

Another part of the RIAA strategy to prop up the major label cartel is seeing success as state governments are increasingly regulating the sale of used CDs. The legislation is under the guise of stemming the trade in stolen goods, similar to that regulating pawn shops.

The second hand goods laws have already passed in Florida and Utah. Typically they require stores to get a permit, thumbprint sellers, and get a copy of the driver's license. Stores can only pay with store credit and not cash, and have to hold the CDs for 30 days for selling them. All for a $5 CD.

The laws treat sellers as criminals and stores as abetting traffickers. The severe restrictions make it difficult for stores to sell used CDs. Some stores in states with the laws have simply stopped selling used CDs.

The only winners are the major labels. Used CDs now make up 20% of total CD revenues. By restricting the availability of used CDs, the labels force people to buy new ones from them.