Music industry moves against CD renting

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Music sales have reportedly fallen by ten percent in both the United States and Germany in the last year - largely due to the fact that people have been downloading free music from the Internet and copying or "burning" the music onto compact discs. In the Czech Republic Internet access is neither as common nor as cheap as in the West and some Czechs use a different method of getting music for cheap - they rent CDs and copy them.

"I'm standing on Prague's Rybna street, it's about five minutes walk from Old Town Square. I'm standing outside a very unusual shop, at least it's the kind of shop I personally had never seen before I came to the Czech Republic. It's a CD rental, a place where you can rent CDs. The sytem is quite simple - to join the club you pay around the equivalent of one new full-price CD. After that you can rent a CD for about one twentieth the cost of a new CD. You get the CD for 24 hours, you take it home and you record it. By the way, it's directly across from a police station."

Understandably some people aren't too happy with the situation. Max Diesing has been running an independent music shop and distribution company in Prague for almost ten years. Why does he think that so many Czechs make their own copies of CDs?

"Several reasons - it's a leftover from the Communist Czech Republic where it was sort of encouraged to quote-unquote steal material like this, copy it, Western stuff."

Mr Diesing says that he believes copying music for private use is acceptable - making a business out of it is a different matter.

"What person hasn't accepted or done some private recording or copying for himself in his life. Nobody is innocent of that. However this is totally different - these are people, rental shops, who are making very big money as far as I know. While other legitimate stores are going out of business they're expanding. For all I know they're millionaires - and not in the Crown sense - I don't know. And that is criminal."

We'll come back to the legal aspect in a minute. First though, I thought it'd be worth getting the opinion of somebody who actually makes music. When the British group Asian Dub Foundation played at Prague's Roxy club recently, I told the group's John Pandit that Asian Dub Foundation CDs were for rent fifty metres from where we were sitting.

"Twenty years ago in the UK there was this big thing - home taping is going to kill music. Oh my God - all these artists are going to be out in the street, the Rolling Stones will be there in the gutter begging for pennies because people are recording them and putting them on tape. You have to weigh it up and you have to be really honest about it and say people may record it, but there again every time somebody records it more people will listen to it."

So essentially you don't mind?

"Of course we're contracted by record companies and record companies mind a lot. There's been a lot of worries about Internet and people recording. What is it about? Are we about selling records? Yes. But what's more important? Have we got something to say and do we want to get that out to people? Yes - that's more important."

Record companies certainly do mind but the question is if they have the legal right to put a stop to CD renting. A lot of people who read the small print on the CDs they buy would assume CD renting IS against the law. I discussed the matter with lawyer Pavel Marc. I began by asking Mr Marc if it surprised him that there were CD rentals in the Czech Republic.

"It does not in this country because it's a hobby of many Czechs to circumvent the law by interpretation. I don't think that the notion of substance prevailing over form has taken much foothold in the Czech Republic. And we come to the question of how it's possible that these shops renting CDs work. I think it's all a matter of interpretation. They get around the provisions of the copyright act by arguing that the CDs are rented within a club so they are used for personal, private use, which is normally legal."

And that seems to be how the Czech Republic's CD rentals get around the law - they say they are clubs of owners, and all the owners have a part share in the club's collection.

But can it really be only a question of interpretation? Surely something is either legal or not. Karel Kucera is the head of the Czech branch of the music industry umbrella organisation, the International Federation of the Phonographic Industry.

"CD renting is not stated as illegal under Czech law. Basically what Czech law says is that CD renting is one usage of a piece of music. Who's responsible for that usage is author, artist or record company. If they allow the piece of music to be rented then it's legal. But currently there is no permission from the side of record companies, artists or authors to rents CDs - so basically it's illegal."

Have you done anything to stop CD renting?

"This year there was a big success cause we made really good progress in one company which used to operate CD renting shops all over the republic and we got a good precedent. Actually, it's not final because there was an appeal but it looks like we're going to get a precedent that says it's basically illegal to run any kind of copy shop in the Czech Republic. People try to cover it calling it a 'club of owners'. Also there are bazaars where you can buy a CD and bring it back like you didn't like it and get all your money back - only a 'handling charge' is taken from you by that CD operator."

So how long will Czechs be able to rent the latest Madonna or Daft Punk album for one twentieth of what they cost to buy. Karel Kucera says those days are numbered.

"The thing is if the case I mentioned is closed and it's going to be closed with a good result of us says that it is definitely illegal, there's not going be any CD rental shop in the Czech Republic in two or three years."