Foetusized's Page about Cut-Out and Promo CDs

Cut-Out and Promotional CDs Explained

why are discs sold with holes punched or drilled, "legalese" statements applied, or notches sawed in the packaging?

Eight examples of cut-out CDs marked on the spine. From the left, the first two are drilled, the next two are a narrow saw cut, the fifth and sixth are the wider saw cut (the most common in my experience) and the last two are cardboard packages that have been marked with some sort of saw, scraping off the printed layer of the paperboard. On the three on the left, the case only has been damaged and the inserts are undamaged. The sixth disc (in the green Rykodisc case) has a particularly ugly cut; it was evidently done through a long box, as remnants of the brown paperboard are embedded in the melted plastic.

not for sale on label
Detail (enlarged) of the label on the disc on a promotional disc released by Arista.
gold stamp on cover
Example of the stamp used on the front cover of Time/Warner promotional discs.

A hole punched UPC from a promotional disc; I purchased this CD used before the release date, which is why I am sure it is a promo copy.
corner clipped on book
Clipped booklet cover from a cut-out of an UK disc.

emi sticker on cover
Enlarged view of the sticker used on the front cover of the booklets of EMI distributed promo CDs. These stickers have a white background with a black border.

statement on CD label
Enlarged example of the promotional use only statement applied to the top (over the label) of EMI distributed promo CDs. Most of these discs also have a line printed over the UPC as below and the sticker on the front cover as above.

geffen sticker on cover
A sticker (printed on clear plastic) from the front cover of a Geffen promo CD.
line through UPC
A UPC code with an overprinted line from a Capitol-EMI promotional CD.

I was loaned this spoken-word disc, and discovered this very interesting statement at the bottom of the back insert. Incidentally, this particular disc was not a promo nor a cut-out. I have not seen this statement on any CD other than ones by this particular artist.

I love shopping through bins of cut-out discs at record stores and discount chains, as cheap treasures can be found -- but I have become aware that many folks do not understand where these CDs come from, or why these damaged CDs are for sale. There is also confusion about discs clearly marked as "not for sale" with various warnings, which often show up in the stock at used compact disc shops or offered in online auctions. So I shall attempt to explain. The practice of notching, drilling or otherwise defacing recordings and then selling them at a discount has a long history -- back to vinyl records -- and much of what I have to say applies to any cut-out records or cassette tapes you also might find. I use the term cut-out to denote all discs that have had their packaging purposefully damaged by the record company or distributor, no matter the method used: bandsaw cut, drilled hole, holepunch, or clipped corner.

Cut-outs fall into two general categories: promotional copies and cut-out titles. What these two types of discs have in common is that the record label wants to destroy the value of these CDs, as they are being distributed for free (promotional discs) or sold at a deep discount (cut-out titles). To prevent these copies from being resold at full value, the record company marks them. Another thing these two types of cut-outs have in common is that the record company does not pay artist's royalties on these CDs, because they are not sold at full value. Incidentally, some record club CDs (Columbia House et.al.) fall under the same standard contract clause, and artist royalties are not paid on them as well.

Promotional Copies

Promotional copies of CDs are discs given away to reviewers, CD stores (for in-store play) or radio stations (for on-air play or to be given away in promotions) and are marked in some way to keep them from being resold at full value. In the business, these discs are known as "promos". Instead of some of the sloppier and more jewel-case-damaging methods of marking these discs, they are often (but not always) neatly hole-punched through the UPC. Cut-out copies of recent releases that are found for sale at used CD stores will be promos.

The trend has moved toward not just cutting-out these discs, but also marking them to specifically denote them as a promo. Warner Brothers uses a warning stamped in gold ink across the front cover, EMI uses a sticker on the front cover and a statement applied over the CD label, and I have several Arista discs with "Not For Sale" on the CD label itself. These markings were probably adopted to discourage resale of promotional discs, but many promos still turn up for sale at used CD stores. In spite of the text of some of these warnings -- "For promotional use only. Sale or other transfer is prohibited. Must be returned on demand of recording company." -- there have been no known cases of the record label demanding their return. Many labels still continue to simply cut-out their promotional CDs.

Cut-Out Titles

Cut-out tiles are the discs that turn up in the discount bins at Wal-mart and other such stores, as well some larger record store chains. These are CDs that the label or distributor have decided to no longer carry in their catalog (known as "cut-out titles" in the business), and their remaining stock is sold in bulk at a deep discount, often pennies per disc. These discs are marked at the warehouse and sold in very large lots (hundreds of thousands) to wholesalers who specialize in these discs. The wholesalers then resell them to record stores and discount chains, in large lots (500 discs and up) without any choice as to which specific titles are included, although the retailer probably is told what the better titles are in the batch as a selling point. The wholesaler uses the sellable titles within these lots to dispose of the unsellable dreck also included.

A few of these discs are still in print in a different form. Sometimes one label will buy another, and the old stock will be cut-out, even though these recordings will continue to be sold with a different UPC and label name on the packaging. Sometimes titles will be replaced with an improved pressing (extra tracks added, remastered sound) and the old stock will be cut-out. Most often the disc is no longer in print at all. No matter why the label decided to let them go cheap, there are good deals on hard-to-find discs to be found in cut-out bins. Sometimes discs for which one has been looking for years will turn up.

On occasion, the sawmarks or drilling do not penetrate completely through the jewel case and leave the inserts unmarked. These could be moved to a new jewel case, and be indistinguishable from a non-cut-out CD. Be on the watch for this when searching through a cut-out bin, and try to look at all copies of any title you've selected to buy, in order to get the least damaged copy.

For additional information on the business of cut-out recordings, and a wonderfully told true crime story, I recommend the book Stiffed: A True Story of MCA, the Music Business, and the Mafia by William Knoedelseder.

2003 Update
Cut-out bins have become less common since I wrote the first version of this essay five years ago. The few discount stores that continue to stock cheap CDs now carry non-cut-out but cheaply-put-together discount titles mixed in with the few remaining cut-out titles. An industry insider has told me that this is a result of SoundScan, which provides accurate point-of-sale statistics to record labels that they did not have in the past. This has enabled the labels to cut back on over-production of CDs and in turn, the number of cut-out CDs. I have nothing to back up this theory, but it has the ring of truth.
Some of the best sources of cut-out CDs, mostly promotional cut-outs, are such sales sites as eBay and Half.com, where the folks that recieve promotional copies can easily convert them into cash. Cut-out copies of new releases can be found for less than retail, sometimes even before the release date.
For those that sometimes ask me where they might buy cut-out CDs in bulk quantities, in late 2002 I found such a site, which was offering CDs in bulk quantities (50s and 100s), which they claimed were mostly from retail outlets that had gone out of business. A month after I made an order, I was notified via email that they could not fulfil my order, had my payment refunded to my credit card, and the site ceased to function. I have found a similar site at Moonlight Sales, offering CDs in lots from 30 to one million, but have not had the "mad money" to make an order and see what I get.

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Find any typos or have any questions, let me know.

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Last updated 30 December 2005.

Detail (enlarged) of the label on the disc on a promotional disc released by Arista.	Example of the stamp used on the front cover of Time/Warner promotional discs.
A hole punched UPC from a promotional disc; I purchased this CD used before the release date, which is why I am sure it is a promo copy.	Clipped booklet cover from a cut-out of an UK disc.
Enlarged view of the sticker used on the front cover of the booklets of EMI distributed promo CDs. These stickers have a white background with a black border.
Enlarged example of the promotional use only statement applied to the top (over the label) of EMI distributed promo CDs. Most of these discs also have a line printed over the UPC as below and the sticker on the front cover as above.
A sticker (printed on clear plastic) from the front cover of a Geffen promo CD.	A UPC code with an overprinted line from a Capitol-EMI promotional CD.