Counterfeit Records: Are They On The Rise?

In addition to record labels’ already long list of woes, counterfeiting has recently emerged as an alarmingly prevalent issue in the world of vinyl sales. So what’s behind this recent uptick in false goods?

_____________________________________

Guest post by Jim Allen of Reverb

As if record labels didn’t have enough worries these days, the perennial problem of counterfeiting has recently been shown to be as active an issue as ever.

An RIAA study of the phenomenon conducted this summer found that 25% of CDs fulfilled by Amazon were illegal copies, as reported by DJ Mag and other outlets. In October, Tommy Boy Records grabbed headlines by saying they saw vinyl records for sale on Amazon that the label had never pressed to wax.

Through conversations with record labels and industry watchdogs, it’s safe to say that the practice of counterfeiting CDs and records is widespread.

In response, an Amazon spokesperson says, “Amazon strictly prohibits the sale of counterfeit products. We work hard to combat bad actors that attempt to abuse our systems and as a result, more than 99.9% of all Amazon page views by our customers landed on pages that did not receive a notice of potential counterfeit infringement.”

“I guarantee that if you look at the Hot 100 on Billboard, somewhere in this world there’s a counterfeit copy of every one of them,” says Bruce Iglauer, founder and CEO of renowned blues label Alligator Records. But it’s a problem that affects the world’s indie labels as much as it does the majors.

Some years back, seeing a rise in counterfeiting coming largely from Russia and China, both the Recording Industry Association of America [RIAA] and the American Association of Independent Music [A2IM]—a trade group representing indie labels—worked with Amazon to try to combat the issue. Richard James Burgess, A2IM president and CEO, says it worked for a bit.

“We worked in conjunction with the RIAA,” Burgess says. “Amazon took steps to curb it, and the counterfeiting dropped down to a very low percentage. Recently it’s gone up again. I think it’s somewhere in the 11 percent range, which is serious.”

Burgess explains that part of the problem with Amazon is that everything goes into one bin, including legitimate releases from the labels and product from third-party “Fulfilled By Amazon” sellers. (An Amazon spokesperson says this is incorrect.)

“You could buy from a legitimate retailer and get a counterfeit product,” Burgess says, or even vice versa. “It can be difficult to detect. I know recently the RIAA did a buy of box sets [to investigate] and 100 percent of the box sets they bought were counterfeit.”

Grey Marketers and Best-Of Bootleggers

The other element thrown into the mix is grey-market imports—situations wherein the records themselves are legit and licensed but are being sold outside approved distribution networks.

Say, for example, an artists’ oldest releases have entered the public domain in one country but not in the US. Jay Millar, general manager of reissue specialists Sundazed Records, shows how such a record could be illegally sold in the US—to the detriment of local, law-abiding labels.

“We were putting out one of our Johnny Cash records where somebody else was putting out the exact same record on the exact same date, but they were ‘importing’ it from the UK, where it was in the public domain. People will manufacture it in the UK, sell it to their distributor… they basically put another link in the chain to make it legal to sell here. Because it’s illegal to distribute it here, but it’s fine to resell them here.”

Sometimes the grey marketers don’t stop there—and instead use a reissue label’s work as their own.

Two of Sundazed’s Johnny Cash reissues.

According to Millar, “If we do something legitimately that’s public domain in the UK, people will take our CD and use it as their master for reissuing it on LP. We’ve had instances where they’ve even worked from our LP’s art, because we could even see the shape of where our logo was removed.”

On top of illegally pressed counterfeits and illegally sold reissues, other big contributors to the counterfeit trade are bogus best-of collections of copyrighted material being released by bootleggers.

“There are two buckets of counterfeit products that exist,” explains Burgess. “One is counterfeit versions of actual albums and the other is counterfeit compilations that never existed. It’s damaging to the artist and the copyright holders.”

The Tech Behind the Bootleg Trade

While there have been record plants pressing illicit wax since the early days of the recording industry, technological advances contribute to the prevalence of counterfeiting, according to Iglauer.

“Now you can do a burned CD where you can’t tell it’s a burned CD,” he explains, “where it doesn’t have that green back; it’s silvery just like a regular CD. It’s much harder and more expensive to counterfeit an LP—there’s the mastering process, plus vinyl pressing plants are still at a premium, there’s still a long wait to get vinyl pressings.”

Still, one of the measures being taken by pressing plants reflects the problem’s presence in multiple formats.

“For CDs or vinyl,” says Iglauer, “the pressing plants now insist that we sign a document saying that we have all legal rights to this and we absolve the pressing plant of any legal responsibility. Because there have been plants that were busted for manufacturing counterfeit CDs or LPs they didn’t realize were counterfeit.”

Reverb LP’s “How a Vinyl Record is Made.”

Following the actions from the RIAA, Amazon has been taking precautions too, according to Burgess.

“I know Amazon locked down the supply chain,” says Burgess. “There’s a process of verification now, and I believe the same thing with eBay to some extent. I think the RIAA does a good job—they have a very strong piracy division and we work closely with them. It’s a difficult thing to detect.”

The injury to the industry, especially these days, is akin to being kicked while you’re down. “It’s a more delicate industry today than it was in the ’90s,” says Burgess, “so any lost revenue can be damaging.”

How to Curb Counterfeits

So what measures can be taken to combat counterfeiting?

On a customer level, Millar says, “You can usually tell what you’re buying just by the price. If it looks too good to be true, it probably is. I think it’s easy to be fooled. There’s so much even on Amazon. It used to be if you were buying from a reputable store you could be sure you were getting a legitimate release, but that’s not the case anymore. The biggest of the big can’t even keep it under control.”

From the retail end, according to Burgess, “What alerted us the first time ’round was one of our members saw that a record was selling well on Amazon, but they were not getting reorders. They figured out that by now they should have had reorders. They started digging into it and they realized the demand had been filled with counterfeit product. The only way I know [to be careful] is to watch your inventory.”

Burgess has the stats to show that it’s gotten better though. “We did see a drop dramatically from something like 23 percent to low single digits,” he says, “and then it climbed back up to low double digits recently. It seems by being vigilant we can actually get it down to a manageable quantity.”

Until then, it’s an issue indies and majors alike are suffering from. “These days there are many more hits on indie labels than in the past,” observes Iglauer. “The majors don’t dominate nearly as much as they used to.” So whether you’re buying an album by a cult artist or a superstar, keep an eye out for any signs of shadiness.

Update, 11/21/2019: An earlier version of this article quoted Amazon’s August response to the RIAA’s findings: “Amazon strictly prohibits the sale of counterfeit products and we invest heavily in both funds and company energy to ensure our policy is followed. … We investigate any claim of counterfeit thoroughly, including removing the item, permanently removing the bad actor, pursuing legal action or working with law enforcement as appropriate.” It has been updated with a new response an Amazon spokesperson sent Reverb.