Some readers will recall a story we ran back in January that detailed a then-forthcoming new music subscription that many were touting as the “Netflix of vinyl”. VNYL was a Kickstarter-funded company that would send subscribers curated packages of vinyl.
The picks would be curated by VNYL’s staff according to a user’s personal tastes and then sent to each user in the mail, a la classic Netflix. The user could then listen to the picks, keep the ones they liked, and return the ones they didn’t.
As Stereogum reports, VNYL eventually exceeded their initial Kickstarter goal of $10,000 to amass a total of $36,000, thanks in part to the free publicity afforded to the service by the likes of Gizmodo, Rolling Stone, Billboard, and yours truly.
The tagline for most of the press was framing VNYL in some capacity as “Netflix for vinyl” and the company heads didn’t shy away from the reputation either. Founder Nick Alt even referred to his service as being like “old-school Netflix”.
It’s easy to see why: Netflix is a trusted, quality service and used to work on a model of renting movies via post, much like VNYL hoped to do with vinyl records. The only problem? Well, making an actual “Netflix for vinyl” is against the law.
Unfortunately, while Alt and his co-founders had a great idea, they failed to acknowledge an element of US copyright law called the first-sale doctrine, specifically section §109(b), commonly known as the Record Rental Amendment Of 1984, which makes it illegal to rent records.
While Netflix was in the clear because the Record Rental Amendment does not apply to movies, applying a Netflix model to vinyl records, cassettes, or CDs is a violation of copyright law. So what did VNYL do once they became aware of the legislation?
VNYL were supposed to start shipping records to subscribers in early February, but didn’t actually get around to it until early April. When the records eventually arrived, there were no instructions on how to return them, as though VNYL had simply forgotten to include them.
This might’ve have been a simple oversight, if it weren’t paired with a change on the company’s Kickstarter page. Instead of informing subscribers that they could “return the [records] that were eh”, they were now told, “Listen, love, how about some more?”
According to Alt, the change occurred after engaging in some market research and discovering that “the vast majority (over 80%) [of subscribers] chose to back us because they wanted to grow their vinyl collection”, hence the change in model.
Alt also told Stereogum that he had only become aware of the Record Rental Amendment after launching the Kickstarter. “After the Kickstarter closed, and while we were setting up VNYL as a company, this came up,” he said.
Naturally, customers weren’t exactly chuffed when they discovered that the service they bought into was no longer “Netflix for vinyl”. Complaints started flooding the company’s Kickstarter page, with many users claiming that VNYL had done a lousy job of curating.
“I am highly dissatisfied with what I was sent. All three were complete losers, and there was no real variety. And I’m not sure how you categorize the records — I would not call Steppenwolf a ‘Lazy Saturday’ listen, nor would I classify Uriah Heep as ‘Dinner Music’,” wrote one commenter.
The uproar enveloping VNYL wasn’t helped by the fact that on 16th April, the company opened a brick-and-mortar location on Venice Beach in California, prompting some investors to claim that they’d been victims of a bait-and-switch scam.
While Alt refutes claims that such a thing occurred, customers were still frustrated with the opaque way that VNYL were conducting business. Many are upset that they signed up for the “Netflix of vinyl” but instead signed up for a record club that sends out used albums no one really wants to listen to.
So what can investors actually do about it? Well, VNYL are in the clear when it comes to violating the Record Rental Amendment. Kickstarted, meanwhile, leaves due diligence in the hands of investors, leaving them without much of a leg to stand on, legally speaking.
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As the New York Times recently reported (in a story unrelated to VNYL), while Kickstarter’s terms of use stipulate that campaign creators unable to satisfy the terms of their agreement might be subject to legal action, no sane attorney would pursue such a case.
“No sane attorney would initiate a class-action suit on a contingency-fee basis against insolvent creators, and no sane backer would ante up the necessary legal fees,” they wrote. Reporting VNYL to watchdog group the Better Business Bureau is also a dead end.
Since it’s virtually impossible to legally account for or enforce taste, it’d be almost impossible to prove that VNYL was acting in bad faith and not you know, genuinely believing that their customers would like to listen to a hand-me-down copy of a Lionel Richie record.
The future of VNYL now remains rather murky. While Alt had indeed identified something that had never before existed in the market place, and something that consumers were interested in, it didn’t exist because it was against the law, not because no one had the gumption to try it.
In the meantime, it appears Alt and his team will continue to try their best to curate to customers’ tastes while fielding their complaints, as well as tending to their new record store, which has risen in popularity since opening. Perhaps they’ll have better luck letting people curate for themselves.
