Amoeba's Piracy By Another Name

Interior of Amoeba Records, courtesy of WIRED

This is astounding.

Amoeba Records has apparently decided they can simply digitize and sell whatever they want if they can't track down the copyright owners.

This is illegal and unethical. I still cannot believe Amoeba is actually doing this. I am hoping this story turns out to be untrue or inaccurate.

If you or I did this, we'd be called pirates (even if we gave this stuff away for free, which we probably would). If an internet company did this, they'd be sued and shut down.

As someone who has struggled to distribute music legally, ethically, and profitably for more than a decade, I know a lot about the business. Amoeba is in the wrong here in every way I can think of.

I hope the artist and user community come down on Amoeba with the same fury they've applied to other companies they feel are taking advantage of musicians.

Then again, it is possible Amoeba will get a pass here because they're a "record store" - perhaps the last record store - and they're "cool". They sell vinyl! They have some great in-store performances!

Amoeba is ripping off musicians.

It's worth noting exactly how Amoeba has managed to survive, while nearly all of their competitors (Tower, Virgin, HMV) have died:

Used music.

Amoeba buys used CDs and vinyl for pennies on the dollar, using information asymmetry and the power of owning the market to maximize their value. They re-sell that used music at substantial markup. (I suspect there are some favorable tax consequences for many of the transactions being for "store credit" instead of cash as well).

Unlike new music, the artists, producers, engineers, and labels get none of the money. Amoeba pockets all of it.

Used CDs can be a (superficially) good deal for consumers, but they're a terrible deal for the artist.

I have spoken and written previously about the potential harm used CDs have created in the music business...and that was before "buy, rip, return".

The industry themselves have occasionally tried to make used CDs illegal (and simultaneously fought regulation of the secondhand market), and introduced various measures (including those annoying as hell "dogbone" stickers) to counteract the used market.

Amoeba's new initiative goes far beyond exploiting this market, and moves into willful copyright infringement, insulting their patrons and the artists who made all the music in the first place.