European Stars and Stripes (Newspaper) - July 24, 1993, Darmstadt, Hesse                                Shoppers browse through Racks of compact discs. Used cd sound As Good As new ones at a friction of the Price. Sas Dave Casey used cd great Deal for music fans that has distributors fighting mad by David Bauder the associated press Ohn Bulmer scares big record companies. The 20. Year old music fanatic buys about eight compact discs a week but he has t bought a new cd in two years since a Rhino records store in Albany n.y., began Selling used discs. It sounds just like new and you can get it at half the Price maybe less than you can get Over on the other Side of the store with a shrink wrap said Bulmer an Art student his simple logic worries record companies and they re in the midst of a fierce behind the scenes Effort to Stop the spread of music stores Selling used compact discs. Three of the nation s biggest music distributors have written to music store owners threatening to withhold advertising Money paid to any store operator who Sells used cd. We View this As a serious threat to the integrity of our Industry said Cema distribution which ships albums by Capitol and Emi record companies in a letter sent in the Spring to music stores. The three distributors that have sent letters Wea Sony and Cema together accounted for More than half of the 407 million new cd sold last year. Mom and pop music shops have been Selling used cd almost since their introduction a decade ago. What has record companies concerned is the recent handful of big chains like the 317-store whorehouse entertainment based in California that Are experimenting with the Low Cost items. When introduced compact discs were touted As a big improvement Over records because they could be played Over and Over again with no deterioration in sound Quality. That s what makes used cd which generally Are sold for $6 to $9, attractive compared to new discs which usually have a list Price of $15.98. Brian Mayhew a financial services worker from Albany goes to Rhino records several times a week to Paw through the display of used cd. He s looking mostly for oldies and has spotted a few bargains. It s like finding a Golf Ball in the Woods Mayhew said. An impulse Purchase of a $1.99 used cd by the band school of fish made restaurant worker Brian Damon a fan who went to see the band live when they came to Albany. Damon said he never would have tried the disc if he had to pay full Price. We serve the customers and the customers told us loud and Clear by their sales results that having a lower Cost cd option. Was a desirable thing said Bruce Jesse vice president of marketing and communications for whorehouse entertainment. For record companies the trend threatens what has been a Golden Deal. It costs companies less than $1 to produce a compact disc that has a Price 15 times higher said Craig Bibb a music retailing analyst for pain Webber inc. Not Only do sates of used cd Cut into the lucrative Market of new cd they Are also transactions that give no Cut to record companies or distributors. Bibb is sceptical that the Sale of used cd will spread much. Many stores simply Aren t equipped to handle bartering for used discs storing and Selling them he said. He also questioned whether me popularity of the practice might be slowed by the same greed that affects record companies Many music stores Only offer $1 or $2 to buy used cd they later sell for up to $9, he said. Store owners realize they take a risk Selling cheaper used cd but say if they Don t they May miss the impulse buyers who were More willing to take a risk on an unheard album when Vinyl records dominated the Market most records were Selling for $7 or $8 before they were eclipsed by cd. Bulmer said he knows Why the record companies Are upset with stores like Rhino but he s glad the retailer has t been intimidated into stopping. From a business Point of View i can see where they re coming from he said. But As a fan i like to Sample music and it would limit me a lot if i had to pay $15 for every  Short subject future and past hits at your fingertips by will Lester the associated press someday soon you won t have to search through aisles of cd for that old jazz track or Michael Jackson s latest megabit. You la just name the title you want and a store computer will draw the music from a database thousands of Miles away and copy it onto a compact disc in minutes along with the Glossy jacket Art and liner notes. The idea a joint venture announced earlier this year by ism and blockbuster entertainment corp. Promises to give the smallest store As impressive a selection As a big City store. It will also save stores from running out of hot titles or getting stuck with too Many copies of a Flop. It would take the Guesstimate out of the business said Christopher Clough a spokesman for ism fireworks partners a multimedia Arm of International business machines. The typical retailer would have unlimited Access to titles and could download anything  the cd music stores looking manufacturing system to new technology. Could be available within a year. And computer software video games and videos could eventually be made available the same Way. The technology is being developed for use by blockbuster the video rental giant but will also be sold to other retailers. A record Industry executive cautioned that business hurdles remain such As copyright issues and licensing by record labels to allow their works to be reproduced. And Sony music a giant in the Industry warned that copying without permission would amount to commercial piracy. It May be much further along As a technology than As a marketplace approach said Jay Berman president of the recording Industry association of America. Berman said the technique might be More useful for old titles classical jazz and Folk than for hot Selling pop titles. I Don t think Michael Jackson needs an alternative marketing technique he said. Compact discs Are encoded with digital data the computer language of ones and zeros that is easy to transmit electronically. In stores equipped with the system customers will touch a computer screen to order a cd. The computer terminal will summon the recording from the digital files of a Distant computer using High Speed optical fiber Telephone lines. The technology could eventually help lower the Cost of cd because $3 to $4 of the Cost of a $15 disc now goes for transportation. Blockbuster s chief financial officer Greg Fairbanks acknowledged the need to get record labels to go along. They wont do it unless they Are sure that their copyright issues Are taken care of and that it will create new business for them he said. Sotu Foy july 34. 1993 Thi stars and stripes 17