RIAA Cracks Down on Unauthorized Compilers

The Recording Industry of America's ongoing pursuit of music pirates bore fruit last week on Tuesday, July 7, when the organization collected $750,000 in settlements from three companies that had produced and marketed CD compilations of hit records. The RIAA also received $20,000 in restitution from Lloyd Schiffres, owner of Top Hat Productions, a disc-jockey supply house. Schiffres, who has been arrested three times, handed over 31 sets of his For DJs Only compilations.

ETV Network of Los Angeles and Promo Only of Castleberry, FL, cooperated with investigators and turned over a half-million dollars in profits they had made from an unauthorized 40-disc set called The Platinum Series. They also relinquished all of their remaining inventory, which retailed at $700-$900 per set. Both ETV and Promo Only promised to assist in future piracy investigations.

In a similar case, The Pros Entertainment Services, Inc. of Philadelphia agreed to pay $250,000 in an out-of-court settlement to end a copyright-infringement action the company had been threatened with by the RIAA. The Pros had produced 500 sets of a nine-volume compilation called DJ Tools. Dennis Tessler, president of The Pros, had placed an order for the discs in January 1995 with a pressing plant that promptly notified the RIAA. The discs were confiscated upon delivery by Pennsylvania State Police.

All of the compilations included top hits by popular performers such as the Beatles, Madonna, R.E.M., Whitney Houston, Eric Clapton, Michael Jackson, Boyz II Men, and Nirvana. Because the discs were ostensibly promotional products aimed at the DJ market, the producers tried to claim that they were exempt from licensing requirements. Steve D'Onofrio, the RIAA vice president in charge of the investigation, dismissed such claims as "ludicrous." Well-established artists don't need promoting, he mentioned, adding "Does 'Twist and Shout' by the Beatles still need promoting?"

Of the Philadelphia case, D'Onofrio said, "We are pleased to bring closure to this case and delighted by the outcome. It's an appropriate settlement, given the nature of the infringements." Despite the fact that DJs are deluged with giveaways and promotional products by record companies, they are "not exempt from copyright laws," he pointed out. "Each and every song on a compilation must be authorized."

Approximately 90% of all music recording and distribution in the United States is done by RIAA affiliates. The remaining 10% consists of small specialty recording companies---legitimate businesses outside the RIAA's purview---and a few scalawags who operate at the periphery of the law. The RIAA claims that the industry loses $300 million to piracy annually in this country, and $5 billion globally. The organization is actively pursuing only large-volume pirates---those who are profiting commercially. Individuals who make compilations for their own enjoyment needn't worry about inspectors knocking on their doors.