Recycled tunes -- Record companies tell retail music chains to stay out of the used CD market

By Dave DiMartino
Updated April 16, 1993 at 04:00 AM EDT

Have you noticed used CDs suddenly popping up at major record stores? The record companies have — and they’re not happy about it.

At $7 to $9 each, these CDs are manna to consumers used to paying the list price of $16.99 for the newest Garth Brooks or Madonna release — especially since CDs wear far better than LPs do. But at a record-industry convention last month, the labels told the retail chains to stay out of the used market or risk losing millions in advertising dollars and merchandising discounts.

”If every store in America sold used CDs, it would ultimately cause us to raise prices,” argues Russ Bach, president of CEMA, the powerful distribution arm of Capitol and EMI Records. ”If our sales drop how else do we compensate artists?”

”But the customers seem to be in favor of it,” says Bruce Jesse, a vice president of Wherehouse, one of Southern California’s largest record chains. It isn’t hard to see why. At a Wherehouse store in Los Angeles, we found Michael Bolton’s Time, Love & Tenderness selling for just $8.99, and the Traveling Wilburys’ Vol. 3 for a rockbottom $5.99.

Most of this recycled music comes from customer trade-ins and returns. But that doesn’t bother the majority of consumers. Walking up to the counter at Los Angeles’ Recycled Records, Steve Rosenberg, a 39-year-old physician, proudly holds Black Uhuru’s Iron Storm and Miles Davis’ Dingo, each tagged at $8.99. ”My basic feeling,” he confides, ”is that a used one is as good as a new one.”