MEIEA Journal Vol 2 No 1  © 2002 Music & Entertainment Industry Educators Association All rights reserved

Hull, Geoffrey (2002). The Audio Home Recording Act of 1992: A Digital Dead Duck, or Finally Coming Home to Roost?, MEIEA Journal Vol 2 No 1, 76-112.

The Audio Home Recording Act of 1992: A Digital Dead Duck, or Finally Coming Home to Roost?

Geoffrey Hull

Middle Tennessee State University


The Audio Home Recording Act of 19921 (AHRA) was an attempt by Congress to enact a legal and economic compromise between the interests of audio hardware manufacturers, blank recording media manufacturers, sound recording and musical composition copyright owners, songwriters and recording artists, and consumers.2 It ended nearly twenty years of dispute among those parties about whether consumers who copied recordings at home for their own use were infringing the copyrights of the sound recordings or the musical compositions embodied in those recordings.3 The solution exempted private, non-commercial copying in analog or digital format from copyright infringement, placed a royalty on the sale of digital audio recording devices and blank digital audio recording media, and required manufacturers of digital recorders to incorporate a copy management system into recorders to prevent serial copying.4

Despite the efforts of the manufacturers, digital audio tape (DAT) recorders and MiniDisc digital recorders never became popular with American consumers. Royalties collected by the Copyright Office for the digital recorders and blank media were therefore disappointingly low. In 1995 Billboard reported, “[D]igital recording hardware has not caught on in the consumer marketplace. DCC [digital compact cassette] has been pronounced dead by industry executives, and the health of the rival MiniDisc is frail.”5 In 1998 the record companies and artists sued Diamond Multimedia, Inc. to stop production of the “Rio” and other Diamond products that could download and store digital reproductions of recordings and songs in MP3 format. A federal appeals court held that the devices were not “digital recorders” within the meaning of the statute and that Diamond was not required to pay royalties or include copy management software in them. It appeared that the Audio Home Recording Act was a “bust.”

This article argues that marketplace factors, which became very apparent in 2000, are breathing new life into the Act and require that it be amended to restore the balance of benefits among the AHRA beneficiaries. The focus throughout is on the interplay between the marketplace and the law. The article begins by examining the marketplace and legal factors that led to the enactment of the Audio Home Recording Act. After a review of the key provisions of the act, it then follows the marketplace and legal factors from 1992 through the Diamond Multimedia case. Finally, an examination of current marketplace and legal factors leads to the conclusion that far from being a “dead duck,” the Audio Home Recording Act of 1992 is alive and well. It may yet prove to be a significant source of relief to consumers who will have readily available digital recorders, to manufacturers who will be able to market the digital recorders and blank media without concern over litigation, and to authors and copyright owners who could see a significant source of increased royalties from the home copying of recordings. To maximize the benefits to all parties, the AHRA “solution” should be improved by amending the act so there is a mechanism for adjusting the royalty rates on digital recorders and blank digital recording media.

Pre-1992 Background

Two significant factors led to the enactment of the Audio Home Recording Act. One of these was the shift in consumer audio technology from analog recording on records and tapes to digital recording, primarily on compact discs. That shift paralleled substantial growth in home recording, especially the copying of prerecorded records, tapes, and discs.

CD sales soar

In 1973, the year after sound recordings became separate copyrightable works, pre-recorded cassette sales totaled only 15 million units, less than four percent of total album sales that year. Table 1 indicates that cassettes went from the least important format in 1973, to become the dominant format in 1988, only to fall to a distant second place in 1999. During that same time period the vinyl LP went from sales dominance to near extinction. Most importantly, the compact disc, introduced in the United States in 1983, became the dominant format by 1993, and by the end of the twentieth century sales of CDs outnumbered sales of cassettes by over seven to one. The clear preference of consumers for digital formats, primarily compact discs, is now a factor leading to the growth of home digital recorders and the “resurrection” of the AHRA.

Table 1 - Pre-Recorded Music Sales in the United States Manufacturer’s Shipments by Configuration (millions of units shipped)

1973 1978 1983 1988 1993 1998 1999 2000
Cassette 15 61.3 236.8 450.1 339.5 158.5 123.6 76.0

0.8 149.7 495.4 847 938.9 942.5
Vinyl LP 280 341.3 209.6 72.4 1.2 3.4 2.9 2.2
8-Track 91 133.6 6

Total Album 386 536.2 453.2 672.2 836.1 1008.9 1065.4 1020.7

Source: Recording Industry Association of America, Yearend Statistics (1987, 1995, and 2000)

Home recording and copyright

The critical legal issue in the dispute over home copying of recordings was whether home copying was a copyright infringement by the copiers themselves, or by the manufacturers of the machines that made the copying possible. The recording industry had long complained about the impact of home recording/taping. A decade of both recording industry and independent studies confirmed significant economic losses due to home taping. A 1978 study found that twenty-one percent of the population (32 percent of record buyers) taped at home. In the early 1980s a Warner Communication study estimated home taping “losses” at $2.85 billion per year (if the home tapers had been purchasers of pre-recorded music instead). Of that figure, $1.5 billion represented the copying of recordings not already owned by the taper. 45 percent of the respondents said they taped to avoid purchasing. The study noted that a prime reason for the prevalence of home taping was that market penetration of home recorders had jumped from 39 percent in 1977 to 48% in 1980.6 Later studies in 1988 by the Office of Technology Assessment (OTA) and the Roper Organization also found home taping prevalent. The OTA study found that 37 percent of those over the age of 14 taped music at home. The Roper study found that 34 percent of respondents said that if they could not tape, they would not purchase the recordings in question. The remaining 66 percent said they would have purchased the recordings they taped. Based on that finding the Roper report estimated annual lost sales at 322,500,000 recordings.7 At the prevailing $ 9.98 list price of tapes in 1988,8 that would amount to lost sales of about $ 3.2 billion (assuming ten cuts per album). The International Federation of the Phonographic Industry (IFPI—the international trade organization for over 1400 record companies in 46 countries) urged a legislative fix to the

home taping problem, but predicted a “long and tortuous path.”9

Home taping and the law, pre-1992

The legislative history of the Sound Recording Amendment of 1971, which made sound recordings a class of copyrightable works, indicated that home taping was considered a permitted use. The House Report noted:

Specifically, it is not the intention of the Committee to restrain the home recording, from broadcasts or from tapes, or records, of recorded performances, where the home recording is for private use and with no purpose of reproducing or otherwise capitalizing commercially on it. This practice is common and unrestrained today, and the record producers and performers would be in no different position from that of the owners of copyright in recorded

musical compositions over the past 20 years.11

The 1976 Copyright Revision Act did not specifically address the question of home taping. The only significant comment in the major legislative history of that Act appears in the Senate Report. That comment was addressed to the question of off-the-air home recording and was really more of a demurrer than a comment: “The committee does not intend to suggest, however, that off-the-air recording for convenience would under any circumstances, be considered fair use.”12

Both sides claimed victory in the wake of the 1984 Supreme Court “fair use” decision in Sony Corp. v. Universal City Studios, Inc.13 The “right to tape” advocates claimed that the Court’s decision that Sony’s Betamax video recorder did not itself infringe copyright, legitimized home audio taping in the same manner as it had home video taping of broadcast television programs. The copyright owners, on the other hand, noted that the Court specifically expressed “no opinion” on the audio recording question,14 and they argued that time shifting broadcast video programs was necessarily different from copying non-broadcast audio recordings.15 The exemption provisions of the AHRA supposedly put that debate to rest.

Digital recording

By the time of the AHRA’s enactment, the focus of the copyright owners had become digital reproduction systems. Digital Audio Tape (DAT) recorders were finding their way into the U.S. gray market by 1988 but had been kept out of the main consumer market by threat of litigation from copyright owners. Digital home recording meant that each copy could be a perfect replica of the original without any degradation of sound quality. Each serial copy (a copy of a copy of a copy …) would be just as “perfect” as the source material from which the first copy was made. That, said the copyright owners, made digital home recording much more of a problem than analog home recording.16 In 1989 the manufacturers and copyright owners reached an agreement to include a serial copy management system in the players/recorders,17 and the first legitimate consumer DAT machines finally hit the

U.S. market in 1990.18 Even then, very few pre-recorded DAT products were available. Most major labels only supplied some classical titles and some independent labels such as GRP released some jazz titles.20

Although the sound recording copyright owners and manufacturers had agreed on some copy management system, the threat and ultimate instigation of legal action by musical composition copyright owners brought the digital recorder part of the consumer electronics business to a standstill. Negotiations between the parties over proposed legislation broke down in 1990 and the copyright owners filed suit against Sony Corporation.20 All parties were faced with losses. The Senate Report noted, “The lack of agreement among the parties affected by this legislation was detrimental to all concerned. The music industry received no royalties, the threat of legal action precluded the electronics industry from introducing new products, and the consumer was therefore deprived of the latest technology.”21 Tandy Corporation’s John Roach testified, “[T]here is nothing more important to the vitality and robustness of the consumer electronics industry than new technology…since the introduction of the compact disc in the early 1980s, we have not had any exciting new technology on our shelves to capture the imagination of the consumers.”22

Negotiations resumed among the principals: the hardware manufacturers, record companies, music publishers, songwriters, recording artists, and performing rights organizations. By June of 1991 they reached what the Senate Report called “a historic compromise.”23 That compromise was essentially what became the Audio Home Recording Act of 1992. It was introduced in Congress,24 hearings were held, and about one year later the bill became law. In the meantime the suit against Sony was dropped.25 The “long and tortuous path” had finally come to its end.

By 1992 the consumer digital recorder landscape had changed again. DAT had become a significant player in the information technology market as a data storage medium for personal computers. Sony dropped its plans for audio DAT in favor of its new digital audio medium, the MiniDisc. Two of the other majors, Polygram (then a subsidiary of the Dutch electronics firm, Phillips, NV, which owned patents on the compact cassette) and EMI (then part of the British electronics firm Thorn/EMI) placed their bets on a new format they had been developing, digital compact cassette (DCC).26

Sony, the original prime mover behind DAT, had to have mixed feelings over consumer digital audio recorders and the rights of recording and musical composition copyright own-ers—Sony was both. In 1988 Sony had acquired CBS Records and ultimately CBS Songs music publishing interests. Phillips was also an owner of hardware and software interests. In 1990 the Japanese firm Matsushita acquired a half interest in MCA Records and music publishing. So, by 1990, three of the six recording industry “majors” (those firms with recording, music publishing, and record distribution systems) had both digital recording hardware and recording and musical composition software interests under their corporate umbrellas.27

The AHRA thus represented a perfect example of the “Chicago school” of law and economics as represented by Richard Posner. Posner and the law and economics scholars argue that laws can be understood and come to exist as economic orderings of wealth.28 He notes that the best laws are those that promote the maximization of wealth for all of the parties involved.29 In this case the rights of the manufacturers to engage in commerce, of consumers to engage in copying, and of authors and publishers to be rewarded for the uses of their works provided economic rewards to all parties. Unfortunately, the rewards to the copyright owners and authors were frozen in the economics of the early 1990s whereas those of the other parties have been allowed to grow through continued participation in the marketplace.

The Audio Home Recording Act

An understanding of the key provisions of the Audio Home Recording Act of 1992 is necessary in order to follow the Diamond Multimedia cases and to grasp the economic impact of the Act in the “digital millennium.” Because the enactment was built upon a series of economic compromises developed by the interested parties rather than upon broad legislative principles, it tends to be extremely detailed. The “devil” which freezes the rewards of copyright owners in the economics of the early 1990s is, unfortunately, in the detail of the statute. The key provisions focus on four areas: (1) a narrow definition of the kinds of recording devices and blank media to which it applies, (2) the establishment of a royalty system for digital recording devices and blank media, (3) the exemption from copyright liability for home recording in any format and for the manufacturers of the digital recording devices and blank media, and (4) the requirement of a copy management system in devices subject to its provisions.

Devices and media covered by the Act

Only those devices and media that work in the digital domain are subject to the royalty and copy management provisions of the AHRA. Furthermore, they are limited to those which are “of a type commonly distributed to individuals for use by individuals, whether or not included with or as part of some other machine or device, the digital recording function which is designed or marketed primarily for the purpose of, and that is capable of, making a digital audio copied recording for private use….”30 Professional models, and those that are used for dictation, answering machines or non-musical sounds, are not covered.31 Only recorders and media designed and used for digital copying of a digital musical recording are defined as making “digital audio copied recordings.”32

The blank media provisions apply to media “in a form commonly distributed for use by individuals that is primarily marketed or most commonly used by consumers for the purpose of making digital audio copied recordings by use of a digital audio recording device.”33 They do not apply to media primarily intended for the purpose of recording audiovisual

works or non-dramatic literary works (including computer programs and databases).34

The royalty system

In order to establish some way to compensate copyright owners for digital home copying of their recordings and musical compositions, Congress created a compulsory licensing scheme. It is “compulsory” because the copyright owners must permit some digital (and unlimited analog) home copying of their works. It is a license because permission to make the copies is given through the manufacturers of the blank media and recording devices. Since it would be impractical to attempt to directly license millions of individuals, the license is a “blanket” license that lets all individuals make copies of all musical recordings (and the recorded musical compositions) within the limits of the Act. The Supreme Court recognized the market efficiencies of blanket licenses in the music industry in Broadcast Music, Inc. v. Columbia Broadcasting System, Inc.35 —in that case the court referred to the blanket licenses for public performance rights. The Court noted that the blanket license developed “out of the practical situation in the marketplace: thousands of users, thousands of copyright owners, and millions of compositions. Most users want unplanned, rapid, and indemnified access to any and all of the repertory of the compositions and the owners want a reliable method of collecting for the use of their copyrights.”36 Since the fees collected from the manufacturers and importers are disbursed to the rights owners and authors, those fees for the license are royalties, i.e., payments to the owners of rights for permission to use those rights,37 and not taxes, i.e., “monetary charges imposed by the government…to yield public revenue.”38 Those opposed to the system often incorrectly referred to the payments as “taxes,” perhaps in an effort to frame them in a negative light.39

Royalty Structure: The statute creates a very specific distribution scheme for the royalties, which are called Digital Audio Recording Technology (DART) royalties by the Copyright Office. Manufacturers and distributors of digital recorders distributed in the United States (whether manufactured here or imported) pay two percent of the “transfer price” (essentially the wholesale price) of the device. If the device is integrated into a larger unit, the royalty is based on the unit’s wholesale price unless separate royalties have already been paid on other parts of the unit.40 The minimum royalty is $1 per unit.41 The maximum royalty is $8 for a stand-alone unit or $12 per unit if it contains more than one digital recording device.42 The statute provides a way to increase the amount of the maximum royalty through a proceeding with the Librarian of Congress, but the maximum royalty cannot be decreased, and there is no provision to increase the minimum royalty.43 To do either of the latter would require Congressional action with an amendment to the statute.

Blank digital recording media are subject to a royalty of three percent of the “transfer price” for each item distributed in the United States (whether manufactured here or imported). The royalty is only paid once, no matter how many times the blank media change hands in the distribution chain. There is no provision in the statute for increasing or decreasing this percentage, nor for a maximum or minimum royalty on blank digital media.44

Royalty Distribution: Royalties collected are divided, in accordance with the Act, into two funds—a Sound Recording Fund and a Musical Works Fund. Two thirds of the royalties are paid to the Sound Recordings Fund, one third to the Musical Works Fund. The royalties in the Sound Recordings Fund are to be further distributed by taking 2.625% off the top for distribution to the American Federation of Musicians for instrumentalists not under recording contracts who perform on sound recordings distributed in the United States, and 1.375% to the American Federation of Television and Radio Artists for vocalists not under recording contracts who perform on sound recordings. Sixty percent of the remainder goes to the copyright owners of the sound recordings (usually the record labels), and forty percent goes to the featured recording artists.45 Table 2 below shows how the split works out in terms of percentages of the entire royalty distributed. The Musical Works Fund distribution system is not as complicated. The statute simply splits that fund down the middle, with fifty percent going to the writers and fifty percent going to the music publishers.46

Table 2 Percentage Shares of the Total AHRA (DART) Fund

Sound Recordings Fund Musical Works Fund
Labels (Sound Recording Music publishers (musical works
copyright owners) 38.4% copyright owners) 16.65%
Featured artists 25.6% Songwriters 16.65%
A.F. of M. 1.74%

A.F.T.R.A. 0.92%

Fund Total 66.7% Fund Total 33.3%

Source: 17 U.S.C. §1006

Before any distribution of funds, the “reasonable costs” for conducting the collection and distribution of the royalties are deducted. During the first few years of operations these expenses took approximately 25% of the rather limited funds.48

The Exemption

To tackle the issue of copyright infringement by consumers and liability for contributory infringement by manufacturers, and to “conclusively to resolve this debate,” Congress fashioned a broad exemption as part of the AHRA:49

No action may be brought under this title alleging infringement of copyright based on the manufacture, importation, or distribution of a digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium, or based on the non-commercial use by a consumer of such a device or medium for making digital musical recordings or analog musi

cal recordings.50

Note that the language of the statute does not state that such actions are not infringements, as do the other exemptions of the Copyright Act,51 it simply says “no action may be brought.” Neither the AHRA nor the Copyright Act of 1976 directly defines “non-commercial.” The Senate Report accompanying the AHRA suggests that the exemption is limited to private, non-commercial uses. By way of example, it notes that the exemption would apply to, “the making of an audiogram by a consumer for use in his or her home, car, or portable tape player, or for a family member…”52 A straight reading of the statute, though, might suggest that a person could make a public non-commercial use, such as making a copy for a friend or friends (or even for all takers) as long as there was no “commercial advantage.” The Senate Report, but not the statute, attempts to further define “non-commercial” by stating that this means “not for direct or indirect commercial advantage.” Thus, the exemption would not apply to “a person who makes multiple copies of a particular audiogram and sells those copies to others….”53 To further complicate the issue, the Senate Report notes that these definitions only apply in the context of the AHRA exemption section.54 That limitation was to keep the definition from affecting other infringement actions, classes of works, or principles of copyright law. Whatever “non-commercial” means, the Senate Report makes it clear that the exemption ceases to apply if the use becomes commercial and at that point that the “normal” copyright actions and defenses apply.56

Copy management systems

The tradeoff for the analog and digital exemptions for consumers and manufacturers was the imposition of the royalty on digital recorders and devices discussed earlier, and the inclusion of copying controls in all digital recorders manufactured in or imported into the United States. These controls prevent the making of “serial copies” of the same recording.

The premise of the Serial Copy Management System (SCMS), or other such systems as may be used, is to prevent the making of digital copies of digital copies. “One can make an unlimited number of copies from the original, but one cannot copy the copy.”57 While the statute specifically refers to the SCMS, it does not say exactly what it is to do. The Act leaves the technical specifications to incorporation by reference and simply requires that devices either use the SCMS or a system that has the “same functional characteristics.” Without getting too involved in the technicalities,58 the SCMS does four things:

The act also seeks to protect the SCMS from circumvention. Section 1002(c) prohibits anyone from importing, manufacturing, or distributing devices or offering services, “the primary purpose of which is to avoid, bypass, remove, deactivate or otherwise circumvent any program or circuit which implements, in whole or in part, a system described in subsection (a).”60

Any action for violation of the terms of the AHRA, including non-payment of royalties or failure to include SCMS devices in recorders, is limited to the remedies specifically provided by the AHRA and not to the usual copyright infringement remedies. This is because the exemption provision (Section 1008) prohibits infringement actions for devices and recordings covered by the Act and the civil remedies section of the AHRA (Section 1009) sets up specific remedies for AHRA violations. The remedies of temporary or permanent injunction, damages, court costs against any party, and reasonable attorney’s fees to the prevailing party61, generally mirror those for copyright infringement,62 but the damages section is significantly different. Actual damages may be elected by the plaintiff if the defendant has failed to provide copy management systems in digital audio recording devices or has failed to pay royalties. In the case of a failure to pay royalties, the court assesses the actual amount due and may award an additional amount in its discretion up to fifty percent of the actual damages.63 Statutory damages are limited to $2,500 per device, $25 for incorrect encoding of digital musical recordings with incorrect copyright status, category code, or generation status, and $10,000 for a transmission that incorrectly communicates the copyright status of the sound recording. The limits are substantially lower than those otherwise available for copyright infringements of up to $30,000 per work for non-willful violations and up to $150,000 for willful infringements.65 In the case of repeated violations (willful or non-willful) of AHRA provisions, a court may double the damage award, but no more.66 As is the case with copyright infringement damages, the complaining party must choose which type of damages it wishes to receive and may not receive both actual and statutory damages.67

The Harsh Realities of 1992-1999

Royalty Distribution. Most recording artists, and many record labels, are represented in the distribution process by the Alliance of Artists and Recording Companies (AARC), a spin-off from the RIAA.68 The AARC represents over 130 major and independent labels and 900 recording artists. They receive the lion’s share of the royalties from the Sound Recording Fund. The Act specifically states that recording artists’ royalties are to be collected and distributed directly to the AARC, not through the record companies. This is to prevent the labels from cross-collateralizing the AHRA royalties and using them to recoup recording cost or other advances under the artists’ recording agreements.69 The Musical Works Fund is generally divided between ASCAP, BMI, SESAC, the Harry Fox Agency (National Music Publishers Association), and the Songwriters Guild. In 1994, the Sound Recording Fund was distributed, but the Musical Works Fund was not. The parties could not agree how to divide the fund and decided not to distribute anything rather than have an expensive arbitration proceeding to divide only a few hundred thousand dollars of royalties.70 They agreed to combine the 1995 through 1998 royalties and divide them in 1999, but they continued to argue over the distribution amounts, and the Librarian of Congress called a copyright arbitration royalty panel to resolve the dispute.71 The royalties were finally distributed in 2001.72 Table 3 indicates that by 1998 and 1999 the royalties had finally begun to amount to something worth dividing.

Table 3 DART (Digital Audio Recording Technology) Royalties Collections

Year Collections Percent Growth
1992* $118,227
1993 $517,581 338%
1994 $520,505 0.6%
1995 $468,890 -9.9%
1996 $370,993 -20.9%
1997 $878,358 135.8%
1998 $1,449,806 65.1%
1999 $3,408,610 135.1%
2000 $5,425,765 59.2%

* Royalties were collected for only one quarter in 1992.

Source: Copyright Office, Licensing Division

The Diamond Multimedia Cases

The first, and only, case involving the AHRA is Recording Industry Association of America v. Diamond Multimedia Systems, Inc. In that case the plaintiff trade organizations, the RIAA, which represents most record companies in the U.S., and the Alliance of Artists and Recording Companies, sought an injunction to block the defendant from manufacturing or distributing its “Rio” MP3 music player. The RIAA complained that the Rio was being manufactured and distributed in violation of the AHRA. They also sought royalties that would be due for sale of the devices under the AHRA. The Rio is a “lightweight, handheld device, capable of receiving, storing, and re-playing digital audio file[s] stored on the hard drive of a personal computer.”74 The digital audio files it can store and play are in MP3 (MPEG 1 Layer 3) compressed format. Such files (many unauthorized) are widely available on the Internet.

The District Court denied the request for a preliminary injunction, stating that the plaintiffs could not show that they would suffer irreparable harm if an injunction was denied, and that their probability of success on the merits was “mixed.” The court noted that Section 1008 of the Act specifically separated AHRA violations from traditional copyright violations. Therefore, although irreparable harm may be presumed in traditional copyright violations, it could not be presumed for AHRA violations. The court reasoned that if the Rio were subject to the AHRA, the royalty provisions of the AHRA would adequately compensate for any harm done.75 Although the District Court did determine that the Rio was a “digital recording device” under the definitions of the AHRA, it also concluded that under Section 1002(a) there was no reason to require SCMS or any copy management system in a Rio because “the Rio does not permit downstream copying because the Rio itself has no digital output capability, and the removable flash memory cards cannot be copied by another Rio device.” The court added, “Therefore, it is nonsensical to suggest that the Rio must ‘sen[d] … copyright and generation status information.’ In summary, incorporating SCMS into the Rio appears an exercise in futility. Because a Rio with SCMS would not violate Section 1002, and because a Rio without SCMS is functionally equivalent to a Rio with SCMS, the Court is convinced that the Secretary of Commerce will conclude that the Rio adequately prohibits unauthorized serial copying for purposes of subsection (a)(3).”76 Given the lack of proof of irreparable harm to plaintiffs, the fact that Diamond would suffer substantial harm from an injunction, the fact that an injunction would “deprive the public of a device with significant beneficial uses,” and the fact that the plaintiffs might not succeed on the merits of the case, the preliminary injunction was denied.

In the RIAA’s appeal to the Ninth Circuit Court of Appeals,78 the entire focus of the court was on whether the Rio was the kind of device to which the AHRA applied. That inquiry turned on whether the Rio was a “digital audio recording device” as defined in the statute, Section 1001(3). To answer that question, the court had to work through three layers of definitions. “A ‘digital audio recording device’ is any machine or device of a type commonly distributed to individuals for use by individuals, whether or not included with or as part of some other machine or device, the digital recording function of which is designed or marketed for the primary purpose of, and that is capable of, making a digital audio copied recording for private use ….” (emphasis as added by the court.) The statute goes on, “A ‘digital audio copied recording’ is a reproduction in digital recording format of a digital musical recording, whether that reproduction is made directly from another digital musical recording or indirectly from a transmission.” (emphasis as added by the court.)80 The final definition in the chain then states, “A ‘digital musical recording’ is a material object – (i) in which are fixed, in a digital recording format, only sounds, and material, statements or instructions incidental to those fixed sounds, if any, and (ii) from which the sounds and material can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.”81 (emphasis as added by the court.) At that point the court summarized the case as turning on whether the Rio was able “to reproduce, either ‘directly’ or ‘from a transmission,’ a ‘digital musical recording.’”82

The Ninth Circuit’s analysis concluded first that the Rio did not make its reproductions from digital musical recordings, because the Rio copies recordings from computer hard drives and computer hard drives are not “digital musical recordings.” The statute specifically excludes material objects “in which one or more computer programs are fixed ….”83 That is what computer hard drives are, reasoned the court. It also found that conclusion to be supported by the legislative history. Although the RIAA objected that such an interpretation would eviscerate the statute by allowing a recording to evade the statute by simply passing through a computer hard drive, the court said, “While this may be true, the Act seems to have been expressly designed to create this loophole.”84 A computer hard drive is not a digital audio recording device, because its primary function is not to make digital audio copied recordings. In addition, the court noted that the “space shifting” of audio files that already resided on the owner’s hard drive was in keeping with the statute’s purpose of protecting consumers’ non-commercial copying of digital and analog recordings.85

Finally, the court concluded that the Rio did not reproduce copies directly or indirectly from transmissions. Although “transmission” is not defined in the statute, the court took it to mean, “the use of the term in the Act implies that a transmission is a communication to the public.”86 There was not much question that the Rio could not directly copy from transmissions because it could only copy files from a computer hard drive. Similarly, the court held that because the Rio could not record from a transmission it was not covered under the second part of the definition because the word “indirectly” as used in the statute modified the verb “is made” rather than “from a transmission.” The question, then, turned on the source of the signal, either another digital musical recording (direct), or a transmission (indirect). Since the source of the signals for a Rio had to be a computer hard drive, neither method was used. The Rio, therefore, was not covered by the AHRA.87

Commentary on the case has been sparse. One writer concluded that the court correctly decided the case on legal and policy grounds. In a Berkeley Technology Law Journal article, Ines Gonzalez wrote, “The Rio does not infringe any of the rights created under the federal Copyright Act or the AHRA. Rather, it represents a classic instance of fair use, a fundamental policy which should not be trumped by industry-spe-cific goals.”88 That statement reads more into the opinion than is actually there. The Diamond Multimedia case is strictly a case of statutory interpretation of the words in the Audio Home Recording Act. The court carefully interpreted the words of the statute, saying, “We need not resort to the legislative history because the statutory language is clear.”89 It examined the legislative history only because “it is consistent with the statute’s plain meaning and because the parties have briefed it so extensively.”90 The court never said the use of the Rio was “fair use” and made no determination under provisions of the Copyright Act other than the AHRA provisions. It did say that the purpose of the Act was to support “private non-commercial use” for consumers to make analog or digital recordings. The court analogized the “space shifting” of files already on the computer’s hard drive not by saying that such uses were fair use, but by saying, “Cf. Sony Corp of America v. Universal City Studios [citations omitted] (holding that ‘time shifting’ of copyrighted televisions shows with VCRs constitutes fair use under the Copyright Act, and thus is not an infringement).”91 Nowhere did the Circuit Court or the District Court engage in a fair use analysis of the Rio under Section 107 of the Copyright Act. It simply said, “Such copying [space shifting] is paradigmatic non-commercial personal use entirely consistent with the purposes of the Act [AHRA].”92 The Gonzalez article also incorrectly cites the Senate Report. She says, “The Senate recognized the importance of fair use of this technology and included a declaration in its legislative report that a consumer who makes a digital musical recording for use in her home, car or portable tape player is insulated from copyright infringement.” The Senate Report does not use the words “fair use” at all on the cited page.93 What the Senate Report actually says is that, “the making of an audiogram by a consumer for use in his or her home, car, or portable tape player, or for a family member, is protected by the prohibition against copyright infringement actions contained in this legislation [the AHRA]”94 (emphasis added).

A narrow reading of Diamond Multimedia is supported by the later decision in A & M Records, Inc. v. Napster. In that case Napster claimed that the argument that space shifting was a fair use was supported by the Diamond Multimedia and Sony cases. The court rejected the argument, saying, “Defendant erroneously relies on the Ninth Circuit’s assertion, in a case involving an inapplicable statute, that space-shifting [in the case of downloading an MP3 file onto a computer hard drive] constitutes non-commercial personal use.”96 Referring to the statement incorrectly cited by Gonzalez from the legislative history, the Napster court noted, “this dicta is of limited relevance…The Ninth Circuit did not discuss the fair use doctrine in Diamond Multimedia.”97

Gonzalez does correctly state that a plausible solution to Internet piracy (and problems for copyright owners such as those posed by the Rio) is the Secure Digital Music Initiative (SDMI). SDMI, which involves both the labels and manufacturers, will encrypt sound recordings as a method of protecting them from unauthorized duplication and distribution. In the aftermath of the Ninth Circuit’s decision, Billboard magazine reported, “Even though the RIAA has lost the appeal, industry insiders say the trade group made its point last year by issuing the legal challenge. Other manufacturers were readying MP3 players for the marketplace at the time, and all but Diamond Multimedia held back. Those manufacturers, like Diamond, have since joined the SDMI initiatives.”99 The same article quoted RioPort president Dave Watkins as saying, “we’re putting 99.9% of our focus in those areas such as the RIAA’s Secure Digital Music Initiative to make sure that we can have a platform that the labels feel comfortable operating within, because that’s what this is all about.”100 The RIAA added, “Fortunately the shared interest in such a marketplace has overtaken the lawsuit; the technology and music industries have already come together in voluntary initiatives like the Secure Digital Music Initiative.”101 Like the Cahn case filed against the manufacturers of the DAT and MiniDisc recorders in 1990, the Diamond Multimedia case may prove to have been a tactical political exercise of limited long-term judicial importance.

The RIAA did gain a small anti-circumvention victory prior to the Diamond Multimedia decisions. In early 1997 the RIAA obtained a temporary injunction against Technolab Digital Systems, Inc. for the marketing of its DigiCon2 device, a device specifically advertised as circumventing the SCMS by allowing copying from one DAT recorder to another.102 Later that year they settled with the defendant for undisclosed terms.103

The New Economic Reality

Even as late as 1998 some writers contended that the compulsory licensing schemes and copying protection devices such as mandated by the AHRA were not working. In an article critical of the economics of such devices, Julie Cohen wrote, “Thus far, consumers have refused to buy digital audio tape machines and media outfitted with serial copy management that prevents second-generation copying. However, both machines and recording media cost substantially more than their analog counterparts, and high-fidelity sound recordings are already available on compact disc.”104 The hindsight of 2001 is probably superior to the foresight of 1998. However, it is also possible that Cohen was “reading the wrong tea leaves.” Consumer loss of interest in audio cassette, preference for Compact Disc, and industry lack of support for DAT and MiniDisc formats had been brewing for quite some time.

The slow but steady demise of the audio cassette

The growth of the pre-recorded Compact Disc market made steady inroads into all aspects of the cassette tape market, players/recorders and blank media. Sales of all types of CD players grew steadily from 1994 through 1999. (Table 4)

Table 4 CD and Cassette Hardware and Blank Media Sales 1994-1999

1994 1999
Portable CD 15,262,000 26,414,000
Total CD 26,554,000 45,225,000
Portable tape
Blank cassettes 437,000,000 335,000,000

Source: Data from Consumer Electronics Association (formerly Consumer Electronics Manufacturers Association) reprinted in “77th Annual Statistical Survey and Report,” Dealerscope Consumer Electronics Marketplace, August 1999, p. 20; “78th Annual Statistical Survey and Report,” Dealerscope Consumer Electronics Marketplace, August 2000, p. 20.

In the five year period 1995-1999 market penetration of CD players increased 32% for home CD players (hitting the 50% mark in 1997), 61% for CD boomboxes, and 45% for personal portable CD players (Table 5). The data for 1999 total more than 100 percent because some homes had more than one kind of CD playback device. Consumer Electronics Association did not publish data on market penetration of any kind of CD player into homes.

Table 5 CD Player Market Penetration 1995-1999

1995 1999
Home CD 47% 56%
CD Boombox 23% 37%
Personal CD 18% 26%

Source: Data from Consumer Electronics Association (formerly Consumer Electronics Manufacturers Association) reprinted in “77th Annual Statistical Survey and Report,” Dealerscope Consumer Electronics Marketplace, August 1999, p. 20; “78th Annual Statistical Survey and Report,” Dealerscope Consumer Electronics Marketplace, August 2000, p. 20.

The market for digital home recording—which was substantial, as indicated by the sale of analog cassette recorders and players—was left an unfilled void. Sales of pre-recorded CDs and cassette tapes (Table 1), cassette recorders, and blank tapes (Table 4) indicated that consumers preferred the CD format. However, the technology for recording CDs at home did not exist. Into the void for home recording entered the CD-R. Home CD recorders (or “burners”) first entered the consumer market in 1999.105 By 2000 they appeared in mass merchandisers such as Wal-Mart, Sears, and J.C. Penney, with prices steadily dropping to below $500 for a dual well CD player/recorder. Consumer Reports noted, “Finally, after years when the only way to make your own recordings was to use cassette tapes or niche formats like the minidisc [sic], there are now affordable ways to record your own CDs.”106 By 1999 leading blank media manufacturers were offering multipacks of audio CD-R blank discs (often referred to as CD-R-DA (Compact Disc-Recordable-Digital Audio) or CD-RW-DA (Compact Disc-ReWritable-Digital Audio)) in mass merchandiser outlets. Maxell’s marketing director reported that sales of CD-R blank media were showing strong growth, especially those intended for audio.107

Manufacturers’ suggested retail prices on MiniDisc recorders dropped as low as $200.108 Billboard reported that MiniDisc (a digital recording system not popular in the United States), “looks set to overtake analog tape as Japan’s home-recording medium of choice.”109 Billboard noted soaring production of MiniDisc players, recorders, and blank media, declining production of cassette recorders and media, and falling prices on MiniDisc recorders. Similar factors are at work in the CD recorder market in the United States.

Royalty collections improve

Because retail prices of many CD-R units were below $500 by 2000, most stand-alone units were paying about $6 in AHRA royalties at that time (assuming a wholesale price of about 60% of the suggested retail price). Since the wholesale prices of most consumer recorders had fallen well below $400 by 2000, the maximum royalty of eight dollars per unit had become unimportant. Reportedly, however, the RIAA began to push for higher royalty rates.110 In spite of the rather low royalty rates and the falling prices of the digital recorders, AHRA royalties jumped about 600 percent from 1993 to 1999, climbing past the three million dollar mark for 1999 (Table 3).

Other marketplace factors likely to introduce some confusion or discord into the system include the declining prices in “professional” models and the introduction of “semiprofessional” models into the market. Professional digital recorders do not have to incorporate the SCMS technology due to the AHRA’s “professional model products” exemption from the definition of a “digital audio recording device.”111 The Act does not further define the term “professional,” nor does the House Report. The Senate Report is more helpful. It notes that the act covers devices that are “designed or marketed for the primary purpose of … making a digital audio copied recording for private use.” The Report notes that, “The focus of Chapter 10 is on machines or devices ‘of a type commonly distributed to individuals for use by individuals, where the primary purpose of the recording function is recording audio works for private use.’”112 The examples used by the committee appear to promote a rather narrow definition of “professional.” They include machines such as those used by telephone companies and the machines used by record manufacturers who make CDs for sale to the public. Later, the Senate Report describes professional products as those “designed, manufactured, marketed, and intended for use by recording professionals in the ordinary course of lawful business.” They discuss eight factors used by the electronics industry to distinguish professional equipment including, “such criteria as the nature of the advertising and distribution channels used to market the device; the occupations of the ultimate purchasers of the device; and the uses to which it is put.”113 The Report adds, “The committee does not intend that the presence or absence of any single factor should create a presumption as to whether or not a device is a professional model product.”114 Those who would like to avoid paying the royalty on the machines and blank media might like the lower priced “semiprofessional models” which typically do not include the SCMS. As one writer put it, “When it comes right down to it, we’re all professionals here, aren’t we?”115 Presumably the RIAA or another “interested copyright party” could show that such semiprofessional models are not exempt. If they were either sold primarily to consumers who used them to make recordings for their private use, or were marketed as such through traditional audio outlets with advertising targeted towards non-professional consumers, then those machines, too, would have to include the SCMS and pay the royalty—regardless of whether they bore the legend “semiprofessional.”


In 1992 the AHRA represented a compromise. It still benefits consumers by allowing them to make low cost digital copies of digital recordings at home under a blanket compulsory license. It still benefits audio hardware manufacturers by allowing them to sell the recorders and blank media to consumers without threat of litigation from copyright owners. The benefit to the copyright owners, however, has declined in real dollars since its passage nearly a decade ago. It is time to adjust the balance.

With the continued penetration of CD players of all types into the home, portable, and auto markets, the continued increases in sales of pre-recorded CDs, and the decline of audio cassettes on all fronts, it appears that CDs have become the format of choice for consumers. Lower prices and greater availability of CD recorders for home use will encourage owners to make copies of new or older CDs for use in their various CD players. All of this should bode well for the royalties collected under the AHRA. These recording devices, unlike the MP3 recorders, are clearly within the terminology of the AHRA. The Act applies because they are “digital audio recording devices” which are “distributed to individuals for use by individuals” and are “designed or marketed for the primary

purpose of … making a digital audio copied recording for private use.”116

The sound recording and musical composition copyright owners had bet on technical evolution from analog to digital recording. They predicted that the conversion would take about a decade and that annual revenues from the compulsory licensing of digital recorders and blank media would hit about $100 million by 2002 (based on the sale of analog recorders and blank tape in 1990).117 In 1992, when the AHRA was passed, sales of cassette recorders amounted to 1,662,000 units with a retail value of over $266 million. Blank cassette sales totaled $621 million in retail value.118 Assuming the minimum one dollar royalty on recorders and the three percent royalty on a “transfer price” equal to approximately 50% of the retail price of the blank media, that would amount to royalties of $266 million for the machines and $15.5 million for the blank media if those sales had been all digital media. By 2000 it became apparent that the evolution from analog to digital copying was well under way, but royalty collections are well behind industry projections due to the slower than expected penetration of recorders and media into the market and to the rapid drop in wholesale prices.

In order to make the compromise enacted in 1992 reflect current marketplace realities, the Act should be amended to allow for a more flexible system of royalties. Such an improved system should be based more on the amount and value of the copying being done than on the amount of copying and the value of the recorders and blank media. One possibility is a subscription system that would allow the purchaser of a digital recorder to copy a certain amount of music for a set fee per month or per year. This would be similar to the proposal for digital download systems being developed by the major record labels. By late 2001 the majors were struggling to launch their own subscription download services.

MusicNet was a joint venture between Warner Music Group, BMG Entertainment, EMI Recorded Music, and RealNetworks (AOL and Napster are also planned distribution outlets). It planned to launch a subscription service in November 2001 where customers could download up to fifty tracks per month for a fee of $9.95 per month.119 Pressplay, a cooperative effort by the other majors, Sony Music Entertainment and Universal Music Group is using Yahoo!, MSN and for distribution. Much like the early days of the record clubs, distribution through either is exclusive, with the exception of EMI.120 So, for example, BMG artists such as Dave Matthews Band would not be available on Pressplay and Sony artists such as Michael Jackson would not be available on MusicNet.121 By late 2001, the exclusive distribution arrangements of the digital download systems were under investigation by the Justice Department for possible anti-trust violations122 —much like the record clubs had been decades before.123 Another drawback of such a subscription system would be that the consumer could not copy whatever they wanted, whenever they wanted, as much as they wanted, without subscribing, or without renewing their subscription fees.

A more practical method would be to allow the royalty rates for recorders and blank media to be adjusted. By including a royalty as part of the cost of the blank media, every blank CD-R has its “permission” to copy built in. There is no need to subscribe to anything. The more blank discs consumers use the more copying they are doing, and the more royalties they are paying. The one time royalty in the price of the recorder is only part of the picture. Most of the other compulsory licenses in the Copyright Act can be adjusted through a proceeding by a Copyright Arbitration Royalty Panel and the Librarian of Congress.124 A similar provision for AHRA royalties would avoid the situation that occurred with the compulsory mechanical license. That rate was set in the statute at two cents per phonorecord in 1909 and remained that way until 1978 when the 1976 Copyright Revision Act took effect. By then the value of two cents per phonorecord had declined in real dollars to three tenths of one cent.125 The AHRA royalty collection system is already in place. It is centralized through the manufacturers of the recorders and blank media and the Copyright Office. It is a blanket license that allows consumers to record any work, whenever they want. The total royalties collected escalate with more home recording, as they should. The problem is that the royalty rates were established when recorders and blank media cost many times what they do today and when market penetration of recorders was at a very low level. Even without such an adjustment, the AHRA is certainly no “dead duck,” and it may well come “home to roost” as predicted by the end of 2002, at least for consumers and manufacturers.


1Audio Home Recording Act of 1992, Pub .L. No. 102-563, 106 Stat. 4237 (1992) (codified as 17 U.S.C. §§ 1001 – 1010).

2S. Rep. No. 102-294, 102d Cong., 2d. Sess. at 33, 40 (1992) [hereinafter Senate Report]. 3See generally, the House Report on the AHRA, H. Rep. No. 102-873(I), 102d Cong., 2d. Sess. (1992) [hereinafter House Report]. 417 U.S.C.§ §1001, 1003, 1005. 5Bill Holland, “Digital royalties for artists, labels static in 1994,” Billboard, May 13, 1995, 10. 6Sam Sutherland, “Taping Losses Near $3 Billion,” Billboard, Apr. 3, 1982, 1. 7Senate Report, 34-35. 8e.g., “Top Pop Albums Chart,” Billboard, July 9, 1988, 72. 9Adam White, “Villain: Home Taping,” Billboard, Jan. 5, 1980, 3. 10Sound Recording Act, Pub. L. 92-140, 85 Stat. 391 (1971). 11H. Rep. No. 92-487, 92d Cong., 1st Sess, 7 (1971).

12S. Rep. No. 94-473, 94th Cong., 1st Sess. 2d at 66 (1975). For a more detailed discussion see the House Report, and Senate Report.

13646 U.S. 417 (1984).

14Ibid., n. 11, 430.

15The Senate Report, 31 – 33, tracks developments from 1981 up until the enactment of the AHRA.

16Bruce Bimber, “Electronics Politics,” Technology Review, Nov.- Dec. 1988, 12; Senate Report, 30; House Report, 12.

17“Sweet Harmony: the DAT dispute is settled,” Time, August 7, 1989, 43. Janice Castro, “Hello DAT,” Time, January 25, 1988, 52.

18Edward C. Bain, “DAT finally takes a bow: digital audio tape is here, hot – and expensive),” U.S. News & World Report, July 2, 1990, 56.

19Janice Castro, “Hello DAT,” Time, January 25, 1988, 52.

20Cahn v. Sony Corporation, 90 Civ. 4537 (S.D.N.Y. filed July 9, 1990).

21Senate Report, 39.

22Ibid., 38.

23Senate Report, 33.

24S. 1623 and H.R. 3204.

25Senate Report, 32-33; House Report, 10-12.

26Mat Toor, “MiniDisc ejects DAT dreams,” Marketing, May 23, 1991, 2.

27See generally, Geoffrey Hull, The Recording Industry, (1998).

28See generally, Andrew Altman, Arguing About Law (2d): an introduction to legal philosophy (2001).

29Richard A. Posner, Economic Analysis of Law (5th Ed.) (1998).

3017 U.S.C. §1001(3).

3117 U.S.C. §1001(3)(A), (B).

3217 U.S.C. §1001(1).

3317 U.S.C. §1001(4).

3417 U.S.C. §1001(4)(B)(ii).

35441 U.S. 1 (1979).

36Ibid., 20.

37Black’s Law Dictionary, 1330 (7th ed. 1999).

38Black’s Law Dictionary, 1469 (7th ed. 1999).

39See, e.g., Barry Fox, “Music Pirates Made to Pay the Piper,” New Scientist, July 27, 1991, 13; Brian Robinson, “Digital Audio Bill Backed: General Agreement Could End Long Dispute,” Electronic Engineering Times, November 4, 1991, 26; Roger J. Rudick, “Get Ready for Tape Tax: Audio Levy May Soon Sting PC Users,” Computer Shopper, February, 1992, 114; and Peter Newcomb, “The Sound of Money: Should computer users be taxed to benefit the U.S. record companies? They will be if Congress has its way,” Forbes, May 11, 1992, 102.

4017 U.S.C. § 1004(a).

4117 U.S.C. § 1004(a)(3).



4417 U.S.C. § 1004(b).

4517 U.S.C. §1006(b)(1).

4617 U.S.C. §1006(b)(2).

4717 U.S.C. §1005.

48Bill Holland, “Home Recording Act Royalties Coming Soon to Labels, Artists,” Billboard, October 29, 1994, 5; Bill Holland, “Digital

royalties for artists, labels static in 1994,” Billboard, May 13, 1995,

10. 49Ibid., 51. 5017. U.S.C. § 1008. 51See, e.g., 17 U.S.C. §§ 107 (fair use), 108 (reproductions by libraries and

archives), and 110 (exemptions for certain performances and displays).

52Senate Report, 51.


54The Senate Report at 52, refers to this as section 1002, it ended up being section 1008 in the final version.



57Senate Report, 36.

58The first thirty-seven pages of the Senate Report are the technical specifications of the SCMS for those who do wish to get technical. Those specifications were incorporated by reference into the Act.

59Senate Report, 37.

6017 U.S.C. §1002(c).

6117 U.S.C. § 1009(c), (d).

6217 U.S.C. §§ 502, 504, 505.

6317 U.S.C. § 1009(d)(1)(A).

6417 U.S.C. § 1009(d)(1)(B).

6517 U.S.C. § 504(c).

6617 U.S.C. § 1009(d)(2).

67Senate Report, 68.

68Bill Holland and Ken Terry, “RIAA Spearheads New Royalty Group: Alliance Will Collect Artists' Digital Fees,” Billboard, February 13, 1993, 1.

69House Report at 15. There is no similar reference in the Senate Report.

70Bill Holland, “Home Recording Act Royalties Coming Soon to Labels, Artists,” Billboard, Oct 29, 1994, 5.

7165 F.R. 19025 (2000), 64 F.R. 23875 (1999).

7266 F.R. 9360 (2001).

7329 F.Supp.2d 624 (C.D.Cal. 1998), affirmed 180 F.3d 1072 (9th Cir 1999).

7429 F.Supp.2d 624, 625 (C.D.Cal. 1998).

75Ibid., 627.

76Ibid., 622.

77Ibid., 633

78180 F.3d 1072 (9th Cir 1999).

7917 U.S.C. §1001(3).

8017 U.S.C. §1001(1).

8117 U.S.C. §1001(4)(A).

82180 F.3d 1072, 1076 (9th Cir 1999).

8317 U.S.C. §1001(5)(B)(ii).

84180 F.3d 1072, 1078 (9th Cir 1999).

85Ibid., 1079.


87Ibid., 1081.

88Ines G. Gonzalez, “Recording Industry Association of America v. Diamond Multimedia Systems, Inc.,” Berkeley Technology Law Journal, Winter 2000, 67.

89180 F.3d 1072 (9th Cir. 1999), 1076.

90Ibid., 1077. 91Ibid., 1079. 92Ibid. 93Senate Report, 51. 94Ibid. 952000 U.S. LEXIS 11862, 55U.S.P.Q. 2d 1780 (N.D. Cal. 2000). In July

2000 the 9th Circuit Court of Appeals stayed the preliminary injunction issued by the District Court. Oral arguments were heard in October 2000, but at the time of this writing, no opinion had been rendered. Eileen Fitzpatrick, Napster Files Final Appeal, Billboard Daily Music News (Online), Sept. 14, 2000.

96Ibid., 52. 97Ibid. at 52, n. 19. 98Gonzalez, supra note 77. 99Bill Holland, “Court Rules Against RIAA in MP3 Case,” Billboard, June

26, 1999, 3. 100Ibid. 101Ibid. 102RIAA News Release, from RIAA website,, “RIAA Obtains Injunction Against Manufacturer Of Copyright Circumvention Device.” Nov. 30, 2000.

103RIAA News Release, from RIAA website,, “RIAA Settles Favorably in Case Against Manufacturer of Copyright Circumvention Device.” Nov. 30. 2000.

104Julie E. Cohen, “Lochner in Cyberspace: The New Economic Orthodoxy of ‘Rights Management’,” 97 Mich. L. Rev. 462, 525-526. 105Robert A. Starrett, “Burning Down the house: Home Recorders are Here,” EMedia Professional, May 1999, 50. 106“Do-it-yourself CDs,” Consumer Reports, Nov. 1999, 36. 107Grant Clauser, “Expanding Media Options: MB turns to GB,” Dealerscope Consumer Electronics Marketplace, Apr. 1999, 31. 108Dealerscope Consumer Electronics Marketplace, October 1999, 26. 109Steve McClure, “Japan: MiniDisc Tops Home Recording,” Billboard, 24 July 1999,at 84. 110Starrett, supra note 94.

11117 U.S.C. § 1001(3)(A).

112S. Rep. 102-294, 102d Cong., 2d Sess, 1992, 47.

113Ibid., 48.


115Starrett, supra note 94.

11617 U.S.C. § 1001.

117“Prerecorded Music,” Vol. 1, Standard and Poor’s Industry Surveys, Jan. 1993, L31. 118“Dealerscope Merchandising’s 71st Annual Statistical Surveys and Report, Part One,” Dealerscope Merchandising, Mar., 1993, 48-49. 119Brian Garrity, “MusicNet Unveils Technology, Business Platforms,”, Daily Music News, Sept. 27, 2001, vnu_content_id=1063320. 120Brian Garrity, “EMI Inks Content Deal With Pressplay,” Daily Music News,, October 3, 2001. 121“CAN'T GET NO… (MusicNet and Pressplay attempt to introduce online music for sale),” Business Week, Sept 3, 2001, 78. 122Jonathan Cohen, “Justice Dep’t Steps Up MusicNet, Pressplay Probe,” Daily Music News, October 16, 2001, 123See generally, Geoffrey Hull, The Recording Industry, (1998), 195; Russell Sanjek and David Sanjek, Pennies from Heaven, (1996), 371. 124See, e.g., 17 U.S.C. §§ 114 (digital transmissions of sound recordings), 115 (mechanical license for the manufacturing and distribution of phonorecords of nondramatic musical works), 116 (public performance of nondramatic musical works by means of coin operated phonorecord players), 118 (non-commercial broadcasting), and 119 (satellite transmission of network and superstations for home viewing). 125Based on CPI adjusted figures of 9.9 for 1913 (earliest data available) and 65.3 for 1978 (1982-1984=100). Source, U.S. Bureau of Labor Statistics, Consumer Price Index, all urban consumers, 1913–2000, web site page:, data extracted March 6, 2001.


Geoffrey Hull is a professor in the Recording Industry Department at Middle Tennessee State University. He is the author of The Recording Industry, a book in Allyn and Bacon’s mass media series, published in 1998. Hull received his J.D. degree from the University of Virginia Law School (1971), an

M.B.A. from Middle Tennessee State University (1981), and a

B.S. in Industrial Management from Georgia Tech (1968). He taught in Georgia State University’s Commercial Music/Recording program for three years before coming to

M.T.S.U. as the first full-time faculty member in theRecording Industry program in 1977. He served as chair of the department from 1988-1990. He teaches primarily law courses including copyright law, legal problems of the recording industry, and media law, but has also taught a number of music business courses including music publishing, marketing recordings, record store operations, and concert promotion. In the Mass Communication graduate program Hull teaches courses in Media Law and Ethics, and Media Management. He was recognized as “Outstanding Teacher” by M.T.S.U. in 1981.

He is a licensed attorney and a member of the Tennessee, Georgia, and American Bar Associations. Hull is listed in Who’s Who in American Law. His research interests are in copyright law, entertainment law, First Amendment law, and recording industry economics. He has written articles appearing in Mass Comm. Review, Popular Music and Society, Feedback (the journal of the Broadcast Education Association), and the NARAS Journal.