TOKYO, JAN. 3 -- Looking for some hot bargains in the latest pop recordings? How about the new Mariah Carey single for 60 cents? How about Michael Jackson's new album, "Dangerous," for $2.35?
Here in Japan, you can find newly released compact discs at such low prices -- but only for one night, just enough time to make a taped copy and return the original before being charged rent for a second day.
Japan, the world's biggest music market after the United States, is the only major country that permits rental of new recordings; there are thousands of Japanese shops renting jazz, rock and classical CDs, mainly to teenagers who can't afford to buy the albums outright. But U.S. and European record companies are about to put a crimp in the hot rental trade -- and that's getting Japanese music fans all shook up.
The CD rental business here works just like video rentals; the same stores often handle both. Young people -- about 80 percent of the rental market is under 18 -- rent an album after school and pay just 300 yen ($2.38) on the average to use it until 2 the next morning, when the disc must be returned to avoid another day's rental charge. CD singles generally rent for 80 yen (60 cents).
Economists on both sides of the Pacific regularly note that the United States is a consumer-oriented society, while Japan tends to focus on protecting producers. But in this instance, it is the Japanese system that gives consumers a break, in the form of hot new albums at about 15 percent of retail price. And it is the American industry (with some producers owned in whole or part by Japanese investors) that is now cracking down on this unique business.
Japan has been moving to bring its intellectual-property laws into sync with the rest of the developed world. Part of that trend is a new copyright law that took effect New Year's Day, giving foreign record companies the right to ban rental of their CDs for up to one year after the issue date.
"The American recording industry has waited a long time to get the full copyright protection in Japan it has everywhere else," said a U.S. Embassy official working on the issue. "Our position is that rentals in the first year severely cut into the sales market, and we want to stop that."
Foreign records, mainly American rock, rap and pop music, make up about 30 percent of Japan's $4 billion in annual CD sales here. But until the new law, foreign companies had no legal right to block CD rentals.
Japanese record companies, in contrast, already have the legal authority to block rentals during the first year after a CD is released. But they have chosen not to impose such a ban; Japanese CDs can now be rented starting one week after their initial release.
There are various reasons why Japanese record companies permit low-cost rentals.
For one thing, CD rental is so widespread here -- there are about 5,600 rental shops, according to the Japan Record Rental Commerce Trade Association -- that the public considers renting CDs a basic consumer right. "When we try to assert our legal right to block rentals, we are accused of being anti-consumer," complained Takuo Chiba of the Recording Industry Association of Japan.
For another, most of the major Japanese record companies are subsidiaries of consumer electronics firms, such as Sony and Japan Victor Corp. The big firms tolerate the concept of CD rental because it stimulates purchase of CD players, blank tapes etc.
Indeed, nobody here tries to hide the fact that many of the people who rent CDs go right home and copy them on tape. The vast majority of CD players on sale here come with built-in tape recorders; many offer a "high-speed dubbing" feature that allows the copying of an entire CD in a few minutes.
The CD rental stores typically have large racks selling blank tape in all sorts of uneven lengths -- 46 minutes, for example, or 74 minutes -- so a consumer can buy just enough tape to hold a single CD.
For the customer, this can be a big saving. If you rent a CD album for $2.38 and copy it onto a blank tape that costs $1.20, the whole package costs about one-fifth what it would cost to buy the album.
The International Federation of the Phonographic Industry says rentals cost the music industry about $1 billion annually in lost CD sales. That explains why U.S. and European record companies are determined to eliminate rentals of their discs.
But this conviction is unsettling to the millions of Japanese music lovers who rent CDs every night. Prodded by the association of rental stores, the music fans have started something rather unusual for Japan -- a consumer movement. They are demanding the right to continue renting, threatening boycotts and other retaliation if they lose.
Rental shops all over Japan are running a petition campaign that should reach 5 million names by the end of this month, the rental shops association said. They will then seek some change in the law to force foreign companies to allow rentals to the same extent Japanese firms allow them.
The rental stores have put up big posters that say, "Thanks to America, you can't rent Western CDs after the first of the year." The poster says that somebody should "revive American democracy" and force the American companies to respect "the culture of music."
Under the lash of this campaign, the Recording Industry Association of America has been negotiating with the rental shops association for weeks. There is no final agreement yet. New talks are scheduled in New York in mid-January.
When the last round of talks ended last month, the Japanese agreed not to rent any new foreign CDs for the next three months, but said they will keep all their current stock -- including recent releases from Michael Jackson, Hammer, Madonna -- available for rent.
Watching all this with dismay are fans of Western music like Makoto Fujimoto, a high school student who dropped into the Tokyo CD emporium called Rental-san the other night.
"A lot of my friends are really into American heavy-metal groups, like Metallica and Guns N'Roses," he said. "You can't buy CDs on a kid's allowance. If I can't rent albums and tape them anymore, it's really bad news."