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CEMA CHANGES POLICY ON USED CDs -- SEEKS MARKET-BASED SOLUTION TO USED CD PROBLEM THAT PRESERVES INTEGRITY OF NEW RELEASES

 LOS ANGELES, Aug. 26 /PRNewswire/ -- Moving to resolve its dispute with Wherehouse Entertainment and other used CD retailers, CEMA Distribution announced today that it would immediately resume co-op advertising with retailers that sell used CDs.
 Commenting on the change in policy, CEMA President Russ Bach said, "We continue to be concerned about the unchecked growth of the used CD market and the issues it raises regarding returns, the cannibalization of new sales and the loss of royalties to our artists and songwriters.
 "However, we recognize that there are deeply held views on both sides of this issue and we would prefer to resolve our differences with used CD sellers through market-based solutions rather than through the courts. We believe our new policy strikes a reasonable balance."
 Bach said that, effective immediately, CEMA labels will prominently mark all promotional CDs as being "not for re-sale." To be eligible for co-op advertising from CEMA:
 -- Retailers should not sell CDs clearly marked for promotional purposes.
 -- Retailers should not sell used CDs of specific titles which, at that time, are being supported by co-op funds.
 -- Retailers should not advertise used CDs with new CDs.
 -- Retailers should merchandise used CDs in a manner that does not confuse consumers. Used CDs must be separately displayed and clearly marked.
 CEMA will continue its policy of not accepting opened CDs from used CD sellers because it is impossible to determine whether these returns have been sold and resold. CEMA is also exploring the introduction of new technology which would allow it to identify and only accept returns from the original customer who received the CD.
 "We will continue to monitor the used CD market closely and maintain an open dialogue with retailers regarding its impact on our business," Bach added. "As always, CEMA will enforce our policies fairly and evenly. We will not treat the independent dealer differently than we treat a major chain.
 "We regret that this issue became so escalated. We want to work together with the retail community to serve our common customers in the best way we can, and we hope that the retail community, in turn, will act responsibly on use CDs to preserve the integrity and value of our releases and ensure the health and vitality of our labels and artists."
 CEMA Distribution, based in Los Angeles, is the U.S. distribution arm of EMI Music, one of the leading worldwide record producers and music publishing companies.
 -0- 8/26/93
 /CONTACT: Bob Bernstein, VP-Public Relations/Corporate Communications of EMI Records Group, 213-871-5197/


CO: EMI Records Group; CEMA Distribution; Wherehouse Entertainment ST: California IN: ENT SU:

LM-EH -- LA027 -- 6285 08/26/93 15:16 EDT
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Publication:PR Newswire
Date:Aug 26, 1993
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