At this holiday season, let us pause and consider David Russo, a 33-year-old New Jersey man who since 1994 used 1630 aliases in 12 mailboxes in seven different towns to buy 22,260 compact discs from mail order record clubs at the ten-for-one rates offered to first-time buyers. Russo did this, he admitted, by "making each address just different enough to avoid detection, adding fictitious apartment numbers, unneeded direction abbreviations and extra punctuation marks," according to the Associated Press. He did wind up spending about $2.50 apiece for the discs, a total of about $56,000. His guilty plea to a count of mail fraud could cost him, by the time of his February 14 sentencing, up to another $250,000 (and 18 months in jail). That would bring the total cost to about $13.75 a disc. Add in another $25,000 for attorney fees and the like, and it gets to about $17.00, which means Russo pretty much paid list price.
If Russo had just held onto the stuff, he might have done a little better in court. Instead, he started a business, CDs for Less, and sold the discs for $10 a piece at flea markets. "It got to the point where people were ordering through him,’’ his lawyer said.
Of course, from a musicians’ point of view, the consumers might as well have ordered from Russo as from the BMG Music Service or Columbia House Music Club. The clubs, which are owned by the major record labels, have a mechanism by which they legally don’t have to pay artists any royalties on CDs sold through the record clubs. Otherwise, they wouldn’t give you nine CDs with the first one you bought at full price; otherwise, the clubs wouldn’t have dropped the necessary number of other CDs you have to purchase lower and lower over the years, as more consumers had better access to other places to buy music.
In industry parlance, record club sales are a kind of "promotional usage," for which the record labels would not ordinarily expect to be paid full price. The clubs are, of course, typically not owned by the artists’ record label itself; they just happen to have the same parent companies. Which means that the money gets transferred to the same coffers in the end, but you’re not supposed to ask too many questions about that. And it doesn’t matter too much if artists and their representatives do ask, because no major record company will allow a performer to completely opt out of the record clubs. The most that is ever negotiated is a one-year delay, and that is available only to superstars. With big albums now selling for up to several years at the top of the charts-Shania Twain’s Come On Over is celebrating its third Christmas in the top 20 right now-that still ensures that the labels get to rip off everybody (including record club customers who have to pay list price plus outrageous "shipping and handling" prices on future purchases) to a Scrooge-like heart’s reasonable content. But this is no crime, because the companies are corporations and in our society, corporations are very special people.
God damn them, every one.
[from Rock & Rap Confidential/1999]
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