But for music retailers, this just means more frustration. "We see three kids pool their money to buy one record," says Don Van Cleve, owner of the Magic Platter in Birmingham, Ala., and president of the Coalition of Independent Music Stores. "We know the other two are getting copies. And it's not just kids. It's the blues society guys, too. Any music fanatic with a circle of friends." Cleve points out that blank CDs are already the bestselling item in some of his stores. "We're feeling it big time."

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It gets worse. Certain youthful CD-R users have taken to stealing empty prerecorded CD jewel cases and booklets for the records they've burned at home.

But will blank CDs really have such a dire impact on the retail business? Haven't customers been buying blank cassette tapes and making copies at home for decades? Without this, there could be no "High Fidelity."

Van Cleve concedes that the music industry has continued to thrive despite blank cassettes. But CD-Rs, he argues, are different. "People were taping albums they owned," he says. "You couldn't play vinyl in the car. Now people aren't actually buying the album. They just want the music for free."

CD-Rs have other advantages over cassettes. Not only do they offer far better quality than blank cassettes, they make the concept of long hours spent piecing together a customized mix tape obsolete. Now, thanks to Napster, "It's so easy to do," says Lee. "It's like batting an eyelash and hitting a couple buttons."

Meanwhile, some customers have taken to selling their own burned CD-Rs as used CDs. Compact Disc World's Lange won't buy them. He's also had to amend his once-liberal money-back guarantee policy. "We were seeing people with CD-Rs return 90 percent of the pre-recorded CDs they buy."

This behavior, say retailers, simply confirms the fashionable notion that music is now for the taking. "It's no longer hip to buy a CD," says Lee. "It's extremely cool to say I got it for free. I don't have opposition to blank media. I oppose sealing and duplicating without compensating artists. That's called theft."

But what about sales? Has the proliferation of CD-Rs hurt retailers' bottom line? Ironically, SoundScan reports national sales of prerecorded albums have increased a robust 9 percent so far this year.

Then what's the problem?

Bull Moose's Wickard agrees that he's "doing great." But he remains "paranoid" about the CD-R rush. "We know the freight train has left the station," he says. "We haven't felt any real effect yet, but if people are stealing today, it's going to come home to roost tomorrow. I'm concerned about 12 months from now."

Over on the campus of the University of Oregon, similar feelings can be found. "We had a great fourth quarter last year," says Lee, "but our sales this year haven't grown the way they have nationally." Are Napster and CD-Rs to blame? "Absolutely." Serving a crucial, technologically adept 12-to-36 demographic, Lee sees himself on the front lines. "We're experiencing what other retailers will be seeing nine-to-12 months from now. And in the next few years there's going to be a gutting of the music market. And not just small independent retailers. Forty to 50 percent of brick and mortar stores will no longer be here."

A just-released SoundScan study on the effects of file-sharing seems to bear him out: During an otherwise robust retail run between January 1997 and March 2000, music sales fell 4 percent at record shops located within five miles of college campuses.

It's not a pretty picture, but there may be one potential savior on the horizon.

Dreese at Newbury Comics recommends the following solution to the CD-R problem: a heavy new excise tax, perhaps $2 to $3 per blank disc. Several European countries, including France, Spain and Austria, have already levied such tariffs (with the money going to copyright holders) after their own local music industries saw prerecorded sales plummet.

But anyone who's ever watched "Crossfire" knows that such a move would face stiff opposition in the States, not to mention strong anti-tax lobbying from blank-disc manufacturers. "A tax punishes consumers more than anybody else," argues Fain at Maxwell, offering a preview of one of the company's talking points. And since the tax would have to be OK'd by Congress, few in the business think it will fly.

"It's a good idea but it's not going to happen," says Wickard. "There is no sympathy for the music business."

salon.com | May 30, 2000

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