Previewing Music at a Record Store

[martinandout]

State: Massachusetts

Hi all,

I am doing research into the legality of a new business venture I am working on. Basically, I wish to provide music retail stores with an automated, computerized music previewing system, which would allow customers to listen to an album before buying it. Of course this has been done for years, but the difference will be in my implementation.

Instead of playing the original media (CD or DVD), the music would be copied and stored digitally on a computer (as mp3's or equivalent), and the customer would call up any album by passing the album cover (with bar-code) across a bar-code reader.

What are the legal implications of this? For clarity I have listed below what I think are the main factors:

1) The store would be making digital copies of albums that they legally own.

2) The customer would have no access to the copies other than being able to listen to them.

3) A customer could never preview an album that the store did not have stock of since the only way to listen to an album is to scan its bar-code.

4) The store is in no way attempting to sell the copies, and the end result of the system's use is exactly the same as if the originals were being played.

Thanks so much for reading this, and I would appreciate any help or advice.
Martin

[Mr. Knowitall]

You would need to license the music. Start with BMI and ASCAP, and try to figure out how much money you would be looking at.

[KeyWestDan]

This has been done.

As the previous post says, you would have to license all of the music.
I doubt a simple BMI and ASCAP license would cover it. You would be reproducing the music and performing it in effect. The record companies will be especially difficult as you are not even using their CD's and they will have issues about the quality of your mp3's and other issues.

For it to work or get any penetration in the industry you would have to license entire catalogs. You would have to have the systems updated daily with new releases.

How on earth are you going to sell this to record stores? Do you expect them to purchase the hardware? Lots of luck with that. Are you providing it? How many millions do you have to waste. Nevermind, rhetorical question.

Come up with an original idea. Do some market research. Then count your pennies and see what you can pull off.

This would take millions of dollars and it would all be lost. You might as well file for bankruptcy now. Stupid, really stupid idea. Do your homework.

[martinandout]

Hi Mr. Knowitall,

Is that the same legal requirement that would have to be followed if the store was allowing the customers to listen to the original media? If not, how is my implementation legally different?

thanks,
Martin

[Mr. Knowitall]

What you propose is quite different from what the stores do. You would need a license covering every single MP3 you included in your device. Even with broad licenses, there would be a vast body of music that you could not reproduce. Even Apple chooses not to pursue licenses on some music that it could otherwise carry in its online music sture, because it's too cumbersome to get permission from all of the parties who hold copyright claims. (Music that depends upon sampling, for example.) And they have really deep pockets, and a staff devoted to obtaining licensing agreements.

[martinandout]

Hi Mr Knowitall,

Thank you for your replies, but I am still a little confused. (I guess that happens when an engineer strays into the legal world.)

I think that I need to clarify what exactly I would be selling. I have no intention of selling this device with music recordings already included. Instead, I would only be offering the hardware and software that a record-store would need in order to convert, store, and play their own music stock.

My original query was from the point-of-view of a store owner who would be using my device, as this information would be a vital part of my sales pitch.

Does this change anything?

Regards,
Martin

[Mr. Knowitall]

So, as you picture it, the stores would rip MP3's from their entire inventory?

[martinandout]

So, as you picture it, the stores would rip MP3's from their entire inventory?

Yes. Of course it wouldn't have to be done all at once. They could start with the 'Top 10', and then do all the new arrivals, and slowly catch up on the rest. From what I have learned from talking to shop owners, all new albums are opened and resealed anyway in order to place a security chip in them. Also, my system would do everything automatically (track names, album art etc), and the shop assistant would just need to place the CD in the server's tray.

But whether such a system would be feasible can be determined later. All I need to know at this point is whether it would be legal.

[Mr. Knowitall]

Legal for you to make software capable of ripping CD's and organizing their contents? Sure - lots of such software is on the market.

Legal for a record store to rip MP3's from its inventory? That's questionable, and it's a lot more than I can do for free to give you anything close to a reliable answer. (My instinct says there would be numerous licensing issues, on top of the copyright issues.) If you're serious about this as a business, get an opinion letter from a copyright lawyer.

[martinandout]

Yes - In the back of my mind I think that I knew this would not be a simple question to answer.

I'll try and find a copyright lawyer in my area. Thanks for your help though.