Music is important. It is ubiquitous today with good reason: we just can’t get enough of it, and its life-enhancing effect is ever-changing and ongoing.
If it had been possible for the past ten years to download nails, most of us would long ago have acquired all the nails we could possibly need, nail factories would have closed down, their workers and bosses found new jobs for themselves, and it would be a dead issue. But music-making is such an important act that millions do it even though they receive nothing for it. They always have done, even back in the heyday of the recorded music industry, when students bankrupted themselves to get it (I know I did) and bands scrambled to play gigs for next to nothing (guilty, again). So in the scheme of things music is at least as worthy of state subsidy than, say, the automobile industry. Music isn’t any less precious than it used to be, it’s just that its commodity status has eroded: unlike car workers the customary method of getting (some) artists paid is failing.
I am in favour of a flat fee on each internet connection, collected by ISPs, to enourage musicians to keep producing new work. (In the past I have favoured a “downloading license”, like the TV license in the UK, but I now believe the extra bureaucracy required for collection and enforcement makes that a worse choice than charging the odd internet user who doesn’t like music. It is not unusual for an individual to be taxed for a service they don’t use. My children are home educated and I still have to pay towards the schooling of others’.)
But should musicians get special treatment, though? Why should they “feed from the public trough”, when others have to negotiate the markets without such aid?
Well, state funds are not a pool of fixed size, not a trough. If such a tax were created, it would be new money; we wouldn’t have to manage with fewer road-sweepers in order to compensate musicians.
And the reason for taxation is to spread evenly costs which we’d all like to see paid but for which there is no useful market mechanism. I believe the overwhelming majority do want to see musicians paid, from the heaviest p2p users to those who earnestly stick to iTunes in the belief that they are doing the “right thing”. But the market in paid music recordings can’t be sustained by goodwill alone, so it would seem that music is a prime candidate for this kind of arrangement.
So yes, if properly implemented I am in favour of a music tax. But I would not use it to subsidise the existing music industry, in fact I will vigorously oppose any attempt to do so. Music companies do not deserve their elevated position, though like once-powerful nations they try hold onto their influence long after their actual importance is gone.
I would use such a fund to commission new works directly from up-and-coming and established artists. I certainly wouldn’t try to monitor all downloads or anything hyper-impossible like that. If the problem of trying to monetize or prevent private copying goes away, so does the threat of monitoring all communications which is being suggested as a “solution” to the “problem” of filesharing. (Such as this one, which in all seriousness proposes: “Secure the Digital Entertainment Marketplace by Strictly Regulating ALL Operating Systems and Digital Media Players”. Rather as one might propose dropping an atomic bomb to break up a scuffle between two toddlers.)
Keep the amount each person has to pay low, and spread the collected funds widely and evenly among as many working artists as is feasible. The more successful acts will most likely have other income streams and won’t need a massive top-up; smaller artists will be grateful to have their next recording project funded. And everyone will benefit from an influx of lots of new work (released under CC license or similar).
And, of course, in exchange for this small opening of our collective wallet, private copying must be made legal.
Chris Ovenden
October 25th, 2009 at 3:36 pm
I am not in favour of a music tax.
The problem is that this takes away the freedom an rights of the fans – your fans!
How would this differ from the music industry setting up flat rate download sites? Where fans can choose to pay a reasonable fee for unlimited downloads without the restrictions. Unlimited doesn’t even have to be in the equation – Try Spotify, add 100 free mp3 downloads without DRM, cut out the audio advertising (maybe some small advertising in the client software), sell memorobilia and charge £10 per month – maybe then you will find a service people are willing to pay for!
October 25th, 2009 at 3:44 pm
Interesting to read your comments, it’s an idea which has been suggested before, however I’m pleased to see that you don’t suggest funneling the funds raised through existing rights collections agencies (who could be argued to be part of the problem, not part of the solution).
One way or another, we do need to find a way to direct funds to support new creative effort, and your suggestion might be one way.
On the other hand, I don’t like encouraging governments to raise new taxes, they are already way too keen to do that, and I always worry about how funds like that will be administered and distributed.
Also, it’s not just music, is it? It’s also films. And books. And anything that can be fixed into digital form. So… it needs to be about more than music.
Just to finish, I would also say that the restriction of private copying by law is already wrong and unjust, and private non-commercial copying should be legalised outright.
October 25th, 2009 at 4:51 pm
If such a plan were put into place, ISPs could uniformly make opting into it an integral part of contracts for new clients, and existing users could also decide they wanted in. Then no one could complain they were being ‘forced’ to subsidise someone else’s music. It would also give the ISPs a come-back to corporate music assertions that they [the ISPs] are doing nothing to deal with ‘illegal’ P2P traffic.
October 25th, 2009 at 5:01 pm
@ Jon
If ISP’s opted into such a scheme, new ISP’s would rise that hadn’t opted in – the plan would fail.
Which is more appealing, a tax, an unlimited fee or a clause in a contract that costs you more money?
Offer a product that people want to buy and they will buy it. Force people to pay for something that they may or may not want and they will resent it.
October 25th, 2009 at 5:14 pm
I’m sure many who believe a “levy” scheme of some kind or another would address the problem probably think so with good intention. However, the whole idea is simply Pandora’s Box waiting to be opened. If you sit back and think about it even a little bit, the reason it can’t work should be quite obvious…
Let’s say, you get the approval for a “tax” (or “levy”, or even something with a more “user-friendly” name on it) on internet services, for example – to cover artists. You KNOW what will happen soon afterward (or more likely, simultaneously). Every other existing element in not only the “music industry”, but every other “industry” built around “intellectual property”, and “network service” will want THEIR OWN CUT.
Every failing business model that’s out there right now will look upon the new scheme to help line their pockets…
1. The still-existing labels will, naturally, want not only their tax, but will also want to be the collectors of the ARTISTS’ tax as well. With the labels still around, there will not only be no way to satisfy the situation without involving them, but there will then be an additional need to create still ANOTHER tax for the Independents, in order to address paying the artists that don’t belong to a label.
2. We’ll still also have the problem of “royalty” and “performance” fee collectors, who, naturally, won’t exactly want to be left out of the picture. They’ll also want to be part of the chief collection system.
3. Software companies will want their cut. (Another separate tax, needing more collectors and its own management.)
4. Publishers will want to jump aboard as well. Every online publication will plead its case to be covered by the new revenue.
5. “Internet” taxes aren’t the only levies being proposed right now. Others that don’t have it, want levies like our blank media levy. Others want ours increased. Others want levies applied to everything from media to appliances. Others want levies on web-based services, aside from the ISPs. Others want it ALL!
6. And, what of the cost of the process itself? How many will it take to collect it, keep track of the accounting, and dole it out? How much of the money will this consume and how much of it will be left to go where it’s supposed to?
I could go on with several more examples, but the fact remains, if so much as one group with any interest in this situation gets compensated, you’ll have to compensate an endless list of others. Each will want their own “tax”, collected by their own “agencies”, and each of these taxes will get mostly absorbed by the processes that will be needed to make it happen, yielding far less of it to the people it was “purposed” for. (Case in point – look at the Canadian levy on blank media. Contrary to what those in other countries might think, it’s not exactly a raging success.)
Even if you could easily grant all the levies required to satisfy all the “interested parties”, what effect would that have on the consumer?? All the industries have already indicated that their “needs” from such a plan would be far more expensive than workable.
And, let’s say, you somehow get these levies going, and “everybody’s happy” (if that’s even remotely possible). Will these taxes not be exploited the way all other taxes already are?? The price always climbs, and the rate hikes are never challenged. (How can they be?! Consumers can’t challenge them, and governments never interfere with them!)
In the name of Sanity, this idea needs to die now!
Not only would it not eliminate the senseless lawsuits we’re seeing now, but in the best possible scenario, it would only put more money in the pockets of the Big IP, and give more avenues for lawsuits to develop where they never would have previously.
October 25th, 2009 at 5:21 pm
” How would this differ from the music industry setting up flat rate download sites? Where fans can choose to pay a reasonable fee for unlimited downloads without the restrictions. ”
-= Sigh =-
So much THIS !!
Why do the majors want a tax so badly ?
Because it’s so much easier to HIDE WHERE THE MONEY IS ACTUALLY GOING.
A site like you mention, or one like say .. ALLofMP3 .. makes it very EASY to see who is buying what, and thus who is owed. The only ones who benefit from such a flat ‘tax’are those who would like to shift the money elsewhere other than where it SHOULD go.
How many of the artists reading this, in countries where there is a blank CD levy, ever recall getting any money from that levy ?
I’m sorry but the onus is on the industry to show a little good faith in the CUSTOMER. There is plenty of visible evidence that the customer is willing to pay, even though free is out there. The idea of a tax needs to die a quick and horrible death.
October 25th, 2009 at 5:29 pm
@ rabbit80:
Sorry: I didn’t make myself clear. I meant users should opt in, not ISPs.
My comment now reads, “If such a plan were put into place, ISPs could uniformly make opting into it an integral part of contracts for new clients, and existing users could also decide they wanted in.”
Cheers!
October 25th, 2009 at 5:38 pm
“ISPs could uniformly make opting into it an integral part of contracts for new clients, and existing users could also decide they wanted in.”
I dunno, Jon, anything like that would require TRACKING, and I think we all know where that would put us already.
In the interest of not turning this into a “DPI” (or related) argument, I’ll say no more.
October 25th, 2009 at 5:43 pm
@ DA:
You’re right, of course. I shouldn’t be forgetting DPI. For anyone who doesn’t know what that is, in some contexts, it’s Deep Packet Inspection. In others, it’s Deep Privacy Invasion.
Cheers!
October 25th, 2009 at 5:52 pm
I still don’t understand why this would need to be done by the ISP’s… what is wrong with an application such as iTunes or Spotify – that has a multitude of other bonus characteristics – such as the ability to advertise, to promote bands and artists, to stream, to offer tangiable memorabilia, sell tickets, advertise concerts etc… The software and frameworks are in place – but they aren’t able to because of the ridiculous licensing.
October 25th, 2009 at 5:54 pm
@ rabbit80
I don’t know, or want to know, much about Spotify. But for me, iTunes could never be part of the cure because it’s a major part of the disease.
Cheers!
October 25th, 2009 at 5:58 pm
@Jon
Agreed – however iTunes is seen by many as a trustworthy source of Music, has a massive database of customers and would be an extremely easy service to convert.
There is no reason why other “competitors” couldn’t be launched – make the use feel like they are in control
October 25th, 2009 at 6:07 pm
@ rabbit80:
The last thing iTunes, or anything to do with it is, is trustworthy. It has a massive data base of victims, not users, and involving it would be endorsing it.
Cheers!
October 25th, 2009 at 6:36 pm
” The last thing iTunes, or anything to do with it is, is trustworthy. It has a massive data base of victims, not users, ”
Ain’t THAT the truth.
Can any of you hardcore Techies out there tell me why the Itunes app needs to insert itself in the protocol stack to function ? ( Bonjour ). That seems more than just a little suspicious.
October 25th, 2009 at 6:59 pm
@Dreddsnik
The bonjour service is a network zero configuration utility. Since this does not necessarily work over tcp/ip in the usual way, but is more like a tcp/ip service it would need to be in the stack to function correctly.
@Jon
Whilst I completely agree with you, I think you miss my point! iTunes despite its problems is still one of the largest “legal” music stores. The people that use iTunes are the fans – the people who have been treated like crap for all this time.
If I asked somebody where they buy their music from, the majority say iTunes – including “pirates”
The software has to have this userbase if the model is changed – if only to prevent the recording industry doing a u-turn.
Not utilising existing models and software that work, will cost moreto develop, and no doubt the industry would screw it up – yet itunes is a proven modelthat could benefit everyone.
October 25th, 2009 at 7:08 pm
@ rabbit80:
“I think you miss my point! ”
You miss mine. I can think of no conceivable reason or excuse to have Apple or iTunes anywhere near anything which is trying to do good for music, musicians or fans. Its presence would blight, not help.
Cheers!
October 25th, 2009 at 7:18 pm
@rabbit80
I don’t really see the comparison with Spotify and the iTMS. Services like these that are convenient to use and help people to find new music would still exist. Just as levies on copying media haven’t halted CD sales in their tracks, so a music tax could coexist with download and streaming services.
@DevilsAdvocate:
“The still-existing labels will, naturally, want not only their tax, but will also want to be the collectors of the ARTISTS’ tax as well.”
They can want to be the collectors as much as they like, the whole point of this endeavour is to pay artists directly. A separate body would have to administer the tax/levy. Whether my idea stands or falls, in whole or in part, the solution we eventually work out here must cut labels out of the equation. That is the whole point of a2f2a.
“How many will it take to collect it, keep track of the accounting, and dole it out? How much of the money will this consume and how much of it will be left to go where it’s supposed to?”
I decided to target it at ISP level because that makes collection simple: find out how many end nodes each ISP is providing and charge them accordingly. It would be up to the ISP whether/how to pass it on to customers. Setting up the structure for commisioning new works will be an interesting challenge, though
@Jon
I’m afraid there should be no opt-out. It sounds draconian, but one of my aims was to kill the dangerous argument for traffic monitoring stone dead, and as soon as the customer has a choice there is a need for enforcement.
The argument that other industries will want to set up their own levies or grab a share of this one seems quite strong, but there is a “slippery slope” feel to it. *This* suggestion is for music creators. Other industries must work out their own solutions. I’m not sure if something similar would work for movies, for example, as the demand is quite different. Also, give the much higher cost of production, and the large number of people involved, it would probably be infeasible to finance movie-making this way.
@John Barron
“I would also say that the restriction of private copying by law is already wrong and unjust, and private non-commercial copying should be legalised outright”
So would I; in fact we all seem to be in agreement here that private copying must be legalised. But there will be a political price to buy back what Crosbie calls our “natural right”, and it has to be one which labels cannot complain hurts artists. If not this, then please suggest another solution that legalises sharing, cuts out labels, gets artists paid, and avoids the need for DPI/surveillance.
October 25th, 2009 at 7:31 pm
@ Chris:
Right. Thanks to DA, I see your point. Maybe I’d better shut up. heh
Cheers!
October 25th, 2009 at 8:28 pm
@thepeer:
1.
They can want to be the collectors as much as they like, the whole point of this endeavour is to pay artists directly.”
Yes, one of the key themes to this site is “cut out the middleman”.
And I strongly believe that will come to fruition, and that The Labels’ days are numbered.
But, I was speaking in the PRESENT.
As long the labels exist, they will continue to insert themselves in the faces of our world governments, throwing payola at the right people, and basically being the parasites they are.
You can’t throw an idea like “levies” out there while the labels exist, period.
They will insist on being the central figures of the discussion right from the get-go, and will end up being central in the outcome. And, if there is any “approval” to go ahead with such a tax while these labels exist, they will end up being the ones who get the say on how it will be implimented, etc. – the whole thing would be bastardized to the point of insanity before it even sees the light of day.
In other words, until that middleman you want to eliminate is gone, the levy would just end up being part of that middleman’s agenda. But, even after the middleman is gone, there will still be lots of other hands out looking for the levy money.
____________________________________
2.
“I decided to target it at ISP level because that makes collection simple: find out how many end nodes each ISP is providing and charge them accordingly.”
(and)
“I’m afraid there should be no opt-out. It sounds draconian, but one of my aims was to kill the dangerous argument for traffic monitoring stone dead, and as soon as the customer has a choice there is a need for enforcement.”
Yes, both the argument and the act of traffic monitoring are, indeed, dangerous and draconian, and subject to far too much abuse inside and outside of the reason for installing it! Nobody (particularly the ISPs!) has demonstrated the level of trustworthyness we would need to even justify going in this direction!
____________________________________
3.
“The argument that other industries will want to set up their own levies or grab a share of this one seems quite strong, but there is a “slippery slope” feel to it. *This* suggestion is for music creators. Other industries must work out their own solutions.”
Yeah, but that was the point!
In order to install this tax, it will need planning, approval and implementation.
Once the approval stage is reached, everyone else will jump all over it.
There’s no possible way to avoid this.
October 25th, 2009 at 9:48 pm
“I’m afraid there should be no opt-out.”
Taxing at the ISP level, and with no opt-out, means:
1) You’d be forcing EVERYONE to subsidize or pay for something regardless of whether they even use it.
2) Every internet account, regardless of provider, will be automatically more expensive.
3) The ISP would have to be the collector, as no provider is going to consent to be a 3rd party’s “accounting” system, any more than they want to be “IP Police” for the Entertainment Industry.
Should any cooperate, it will be for a price that will blow the whole idea out of the water anyway. (Obviously, the’re not going to do it for free?)
4. There’s already a big issue with the idea of having an ISP hand over customer data to 3rd parties, which would have to be done to make any of this work.
5. And what about liabilities? I’m sure ISPs wouldn’t want to touch the idea, for fear of being held responsible for any “accounting anomolies”.
6. (This one’s a “given”…)
How much of a stretch do you think it will be, once ISPs are tied into this, that they will later be expected to cooperate with any “investigations” or “inquiries” involving customer activities of ANY OTHER kind, considering they’re already finding themselves in the position of being “the most logical source” right now?
(Slippery slope, indeed.)
October 25th, 2009 at 9:50 pm
OFF-TOPIC APPEAL TO ANYONE:
Is anyone else having issues with the comment entry window?
October 25th, 2009 at 10:01 pm
” *This* suggestion is for music creators. Other industries must work out their own solutions.”
The solutions already are there and proven. They keep being ignored, in the real world as well as all of these threads. As I said, the only ones that will benefit from levies are the labels, since ‘hide the money’ will still be asy to play.
October 25th, 2009 at 10:54 pm
@thepeer:
If you think you can just wave a magic wand and cut the labels out of any net tax you are not dealing with reality. First and foremost, most name artists are under contractual obligations to the labels, and payments made to them go through the labels first. I can’t speak for the U.K., but I can tell you in the U.S. the RIAA has a LOT more influence in congress than musicians do, there is no way in hell they are going to pass any net music tax that would cut the labels out. Let’s just say for the sake of argument that congress did pass a net tax that cut out the labels(it won’t), the first thing the labels would do is challenge the provision cutting them out in court. In the U.S., chances are VERY good that the court system will side with the labels, so in the end you wind up with a net tax where the money goes directly into the coffers of the RIAA, with artists seeing little or none of it.
October 26th, 2009 at 6:20 am
Clearly we are going to have to deal with the labels’ power at some point. I understand the scepticism towards any solution that involves government action. We all know that most political parties are in the pockets of big media. But I am not interested in any plan that doesn’t legalise private copying, and copyright is underwritten by the state. There is just no way around it.
Here in the UK both of our two main parties are spineless and have no particular agenda other than to regain or retain power. If we are able to put some emphasis behind an artist-centred plan and gain some column inches in the popular press – and especially if the PPUK gets behind it, and is seen to be gaining in popularity – inevitably both major parties will, in their terror, start to move towards that position too.
I’m sure there are workable strategies in other democracies too: ultimately, political parties are more scared of voter power than their paymasters in business.
October 26th, 2009 at 7:53 am
I think the real problem with this model, no matter who collects it, is how it gets distributed to artists. Unless you have some sort of tracking, which I assume none of us would support, then the income will become ‘black box money’.
Black box money is a term that comes from the publishing world. When a shop is forced to pay a licence for playing music in their store – which I think is wrong – they do not fill in a form which says which artists work has been played. Therefore the collection agency does not know who to distribute the money to, so it goes into the ‘black box’. Not knowing what to do with it, it often ends up being used for costs by the collection agency.
This was bad enough when it was just publishing monies. In recent years, the Big 4 labels have taken the concept of black box money to new extremes in the hope of shoring up their bottom line.
When they sign up with a new digital platform – say a mobile phone company buys access to a labels entire catalogue for a fixed amount – $X billion say – this is a monetisation of artist’s work and so we should be paid. However, as the labels cannot define which artists work will be utilised by the service, so they don’t know who to pay royalties to, so the money goes into the black box and appears in the label’s accounts as profit. Very little is ever distributed to artists.
This is why one of the FAC’s big issues is transparency in the deals that are signed by labels with digital platforms. Frustratingly, almost all of these deals are kept secret by NDA’s – non-disclosure agreements. Want to find out how much YouTube pays the PRS for the use of our work? Sorry, it’s covered by an NDA, like so many of the deals done by internet companies. I spoke to one of the PRS negotiators who did the YouTube deal with Google. Even his conversations with them were covered by NDAs.
October 26th, 2009 at 10:22 am
” I think the real problem with this model, no matter who collects it, is how it gets distributed to artists. Unless you have some sort of tracking, which I assume none of us would support, then the income will become ‘black box money’.
That’s precisely why models like the AllofMP3 one were good.
Easy to track who gets what, and this is why I believe the labels worked so hard to stomp it into the ground. The labels WANT a levy, and they won’t accept anything else, unless the artists exert some pressure on them.
October 26th, 2009 at 10:44 am
@Billy:
That’s why we call them the MAFIAA.
October 26th, 2009 at 10:56 am
I hate to be the one who always says that the conversation is headed in the wrong direction, but I’m going to do it again, basically because I can, and I think it is necessary here.
You’re talking about imposing a tax to compensate copyright holders and artists for non-commercial sharing of their music. This runs directly contradictory to the idea floated here by Billy that non-commercial uses would not require compensation. If some individual site is exploiting music for revenue, tax the site by taking a share of revenue, don’t tax the entire system. That’s why I think this particular discussion is headed the wrong way.
That being said, I was once a proponent in an ISP tax for music, It had its flaws, to be sure, but it seemed to achieve the immediate goal; artists got paid commensurate with their contribution to popular culture.
I could even see expanding the idea to cover all intellectual property subject to “free” distribution on the Internet; movies, books, graphic works, games, and other software. Every creator would have to be satisfied with a smaller slice of the same pie because there was an upside limit to how much the market could bear before non-taxpaying alternatives became generally available and more attractive because of the price differential. I figured that only represented the reality that the competition for the “discretionary cultural dollar” has gotten so much fiercer in the last 20 years, and that the creators would accept that in return for fairly getting paid SOMETHING.
Because I work for artists, I tend to put every new idea through the same simple filter: “How do artists get paid?” And that’s where the tax concept broke down. For discussion purposes, I will set up the following scenario that uses “tax” to describe the fee, and which is based strictly on the US:
1. The government (wherever you are) sets up a universal $5-a-month-per-account tax charge to be assessed and collected by your ISP.
2. There is no opt-out provision like Jon suggests. If you are an ISP, you must pay the tax. Either you pass the charge onto your customers or you hide in your basic monthly fee, but you have to fork it over.
3. The money does not go to a government-run fund, but to a non-profit entity established to collect it from the ISPs, make sure the payments are accurate, and pay the proceeds to the proper party.
For the purposes of this particular discussion, I’m going to overlook the immense practical problems facing this kind of structure. For a hint of my complaints, you can go to p2pnet and look at the on-going colloquy between SoundExchange Director Dick Huey and me about what I consider to be the utter failure of that organization to keep the promises made to artists on collection and distribution of Internet and satellite radio performance royalties. There’s every indication that an ISP tax would be handled the same way, and by the same people, which should give every artist serious pause about how good a tax will be for artists.
Thinking about that dismal record, however, led me to some deeper consideration of the whole idea, and a lot of it is based on the numbers, and what they mean.
Back in 2Q 2008, a census of ISP customers found that, in the US alone, there were 96 million different accounts. This census did not include several of the larger ISPs who do not report subscriber numbers, because they are privately held, or use some other accounting basis, so I think it is safe to assume we can use 100 million subscribers as a conservative round number for the current subscriber population.
Let us inagine that an ISP tax is imposed that establishes a $5 a month payment to cover filesharing for ALL intellectual property, and that through the lawyers’ equivalent of a death-cage wrestling match, music is entitled to $1 of that. Let us further imagine that the SoundExchange template is reused, and $.50 of each dollar is allocated to recording artists.
This means that record labels will automatically make $50 MILLION a month ($.50 x 100,000,000 subscribers) from the tax, or $600,000,000 a year.
For doing absolutely nothing to create that revenue. In fact, it will be doled out to them on a monthly basis even though they have utterly failed in their own attempts to make money from Internet distribution of the recordings on which they hold the copyrights. Whether they make good new music, bad new music or NO new music, they will be paid $50 million a month. There is no way on earth this is going to improve the quality of the music we get to hear, which is frankly the reason why fans want to compensate artists in the first place. The tax rewards record companies with failed business models. This doesn’t sound right to me.
One highly probable result of such a tax system will be an increased consolidation in the holding of copyrights, as record labels with tons of available cash look to augment their revenue from the tax by buying up software and game developers and anything else that shares in the tax. That result is directly and absolutely contradictory to the concept of paying artists directly in order to bypass the current system.
And then there is the problem of deciding who gets paid. Because it is a straight per-customer charge, regardless of whether or not the customer engages in filesharing, there’s no need to know who is sharing what specific files. There are basically two ways of dealing with that; find out what files are being shared or coming up with an estimate on which files are being shared.
The fundamental problem with finding out which files are being shared is that it requires the ISP, or somebody else, to review all that Internet traffic and see what’s in it. Besides slowing down the transfer of all information, there are substantial privacy concerns with this approach. So we are left with “estimation.” This isn’t such a big problem for the “copyright holder” (label) side, because there are fewer of them in number, and almost all the power lies with the RIAA. Like the proverbial 800 pound gorilla, we can pretty much presume going in that they will end up with a substantial share of that $600 million a year. The rest of the labels can, and will, fight over the crumbs the RIAA leaves behind. If you doubt that the RIAA will fix things in its favor, remember that it set up SoundExchange and appointed all 18 of the Directors there. To show how fair it could be, it allocated three of nine seats on the label side to representatives of “independent labels.” One of the “independent representatives” the RIAA named to the board is Tommy Silverman, who just happens to also sit on the Board of Directors of the RIAA.
It’s on the artist side that allocation and payment gets really tough, especially if there’s no hard data on who got shared. There are two approaches that the industry has used in this circumstance. You can use a formula that you really don’t explain to anyone, but which, in practice, favors the most popular artists. This is the approach taken by the Alliance of Artists and Record Companies (AARC) in allocating the annual royalty fund generated by Japanese CD rentals. The fact that formula favors the record labels the most popular artists are on, and those labels are the biggest ones, is strictly a coincidence. The other approach is to say you can distribute the money fairly and honestly and then not distribute it fairly, honestly or, at all. This is the SoundExchange approach.
When you cut through the lies and broken promises and sleight of hand tricks, you realize that many artists will not be compensated fairly from the tax because the incident of the sharing of their recordings can’t be measured without violation of the privacy rights of every ISP customer. That’s not an acceptable tradeoff. We will have, as we do now, numbers from paid downloads, but we would need to determine if these reflect straight p2p sharing. I suspect they won’t.
So, as a result of looking at the numbers, I decided that an ISP tax wouldn’t actually compensate artists in any realistic way in return for the sharing of their works, and was therefore a bad idea.
As we are looking for a way for artists to share in the revenue from commercial exploitation of their works, an ISP tax, which will generate revenue based on the incidence of non-commercial sharing of those works seems to be a non-starter for me.
What am I missing?
October 26th, 2009 at 11:27 am
@Fred:
“What am I missing?”
Not much, Fred, except for maybe comment #5, where I basically said a lot of what you just said (just maybe not as eloquently).
Personally, I don’t think the conversation was “going the wrong way”, as this site is trying to encourage the “entire discussion” surrounding the current state of music sales and artist compensation. Obviously, if the “main topic” on the page leads to a “no win”, other issues will end up being brought in.
October 26th, 2009 at 1:29 pm
@thepeer
Yes, I believe that if a2f2a comes up with nice policy that we could support, that the UK Pirates might be delighted to do so, and I would be very happy to take something like that back to the PPUK policy discussions and speak there in favour of adoption. Although possibly not this particular proposal…
In a similar way, I think that we would see the Featured Artist’s Coalition as potential allies (I believe we have been trying to make contact), if we in PPUK could come up with policy we believe in, and which the FAC could get behind and support as well, then I suspect we would be delighted to do so, and again I would speak in favour of adoption of such a policy by the party.
I suspect we all have similar ideas, we want freedom from control, censorship, and restriction by “majors” the way that happens today, we want artists and creative people to have the opportunity to profit from and earn from their work, we want it to be as easy as possible for new entrants to that, and maybe most of all we want to encourage the greatest possible flow of creativity and dissemination to the widest possible audience, and maybe not just an audience, but a participation.
How we get there… well, we’re asking the right questions, maybe, and with wit and ingenuity we will find answers.
October 26th, 2009 at 2:00 pm
DA,
TI’m not worried about everyone jumping on a tax bandwagon if one is built. That would lead, if to nothing else, at least to the realization that everybody is chasing the same dollar, and nobody is going to get the share they think they “deserve.” That really isn’t what we’re here to discuss, though.
The fundamental problem remains. The tax is proposed as a way to compensate for non-commercial downloads, and those, by general consensus here, are not supposed to generate revenue. You and I agree that what is “missing” is the need for this conversation at all within the parameters that have already been set for this discussion.
October 27th, 2009 at 2:39 am
There are ways to track plays to split revenues. That’s not the problem. The model has been difficult to implement to date as ISPs don’t have any incentive to charge users more or take from their bottom line to pay a tax. Copyright law has not helped. The threat of government intervention rattles ISPs but nothing has happened and no one feels any pity for the record industry. Ultimately artists will be the victims of ISPs building their business off the fruits of their endeavour. A group of well known artists should go visit a major ISP and ask them what they are prepared to do about the problem. Unless ISPs proactively engage, they will begin to look like the freeloaders they are.
October 27th, 2009 at 4:09 am
@Fred
What you’re missing is that my proposal would bypass labels by commissioning new works directly from artists. We avoid the labels’ and collection societies’ ability to make money disappear, we avoid the black box scenario Billy mentioned (a very serious problem which we need to address properly elsewhere), and we avoid tracking.
I am not in favour of counting how many copies of particular songs are transmitted across the web, for all sorts of reasons, not least because we have no idea which of these files is actually played. If we wanted to make payments proportional to popularity, we could use a voluntary play tracking system, like last.fm’s “scrobbler”, where users install a plugin to their media player which sends in usage data. Many fans would want to supply this data if they knew it would help the artists they liked.
October 28th, 2009 at 2:41 pm
I think that aiming at the ISPs for a levy-based system is inappropriate, and (as others have mentioned) threatens to open a pandora’s box of “X also needs a levy to support their models”. Further, I can appreciate the concern that some have that this would be overly broad (e.g. my parents, grandparents, etc haven’t ever downloaded a music file) and thus suck in a lot of people that don’t, and won’t, use P2P content delivery systems.
That said, I’m a Canadian, and don’t actually have an issue with a levy-system *that works*. In Canada, we are charged a levy on all blank media that is sold. This levy originated many years ago, and was meant to recoup losses from the copying of MP3s onto disks. The levy is very small per disk. Arguably, few people burn mp3s to disk like they used to – with the advent of cheap and portable storage media, that’s where media tends to go. Rather than targeting ISPs (who, really, should function like semi-intelligent data piping networks) why not impose a small levy on mp3 players? When I see an iPod or something like it, and am told that ‘160GB of storage just isn’t enough’ I have a hard time believing that someone has paid the not-so-small fortune to fill it up with music, TV shows, etc. Toss a levy on the device at point of sale, and then have a mechanism by which the money is blackboxed and distributed back to content owners.
Is a black boxing system ideal? No. But if we’re talking a levy, either a more broadbased sampling of what is being listened to needs to be widely adopted (i.e. one that does account for P2P downloads, YouTube hits, etc) or ’smarter’ devices (i.e. ones that can read what is being played and then report it back to a mothership/motherdatabase to adjust the levy in near-real time) would be needed for ‘targeted’ redistribution of levy fees. As a consumer, the former is an acceptable shift in distributing the levy, whereas the latter is a gross violation of my expectations of privacy.
As for the concerns about organizations collecting the levy, make them non-profits (or something similar). Organizational dynamics are such that there *must* be some kind of organizational structure that would suit a distribution of funds in an acceptably transparent fashion.
October 28th, 2009 at 4:44 pm
@Chris:
1) All taxes and levies always become nothing more than explosive cash cows that are totally abused at every opportunity. For example, start with a $5/month “internet tax”, and see how long it takes before it becomes $20/month, regardless of how much of that is actually being allocated to compensate music.
2) The Pandora’s Box Syndrome (which I’ve already discussed a few times) is a reality. There are too many “interested parties” in the picture now, just waiting to pounce on such a proposal. There will also be the need to create new ones connected with any levies that are introduced.
3) We already have “non-profit” organizations that are supposed to be collecting royalties, etc. Lots of money IS being collected… The artists just aren’t receiving it. Google “SoundExchange”.
4) The money collected from such a levy always gets whittled down by all the administration costs.
5) The blank media levy was a failure, and we’re still paying for it now.
6) Any solution to this whole mess would need to be in the form of something much less complicated (easily implimented), more streamlined (less people and processes that would reduce the total take), and not based on any past failures.
October 30th, 2009 at 2:26 am
DA:
Believe me, I take the issues that you offer seriously, but in all cases they are instances of particular organizational issues. Administrative overhead exists, yes, and a levy doesn’t necessarily have to be the *sole* method of collecting fees/directing monies towards artists. As I understand it, a key issue with the levy in Canada is the metrics used to identify key artists (based on discussions I’ve witnessed between various parties in the music industry who tend to recognize distribution challenges and issues). The overhead, in the Canadian situation, isn’t extremely high, and the levy is small enough that consumers are (reasonably) used to it. Further, extending the levy to portable devices has the advantage of conveying some degree of legal protection on individuals engaging in P2P, and thus can shield them from devastating lawsuits from the music conglomerates. We need to acknowledge that people are listening to WAY more music than they were 20 years ago (in the sense of a more diverse set of albums and songs) but are highly unlikely to purchase all of those albums. A levy doesn’t try to capture the full ‘value’ of a song (full value defined as the present commercial valuation of media/content) but the partial value that might be derived from listening to song/albums. It is up to other delivery and monetization mechanisms to then pick up the ball and let new fans then direct funds towards artists they support.
At the moment, I don’t quite see how the levy system is ‘too complicated’ or ‘not streamlined enough’ – the issue is tracking metrics and monetary delivery systems. By focusing on the hardware that holds music, we can be sure to avoid charges at the ISP level, where all attempts to systematically track P2P file transfers using networking appliances has resulted in both invasive applications of technology *and* failures to prevent copyright infringement.
October 30th, 2009 at 10:37 am
@Chris:
“…in all cases they are instances of particular organizational issues.”
“Organization” had little to do with what I was talking about. I was referring to the inevitable extortion every tax and levy to date has become.
Once any revenue stream is in place, it gets exploited by every agent in the process, and the consumer has no real avenue of recourse. Rates get jacked up and everyone is supposed to keep accepting that as “part of the package”.
_______________________________
“…extending the levy to portable devices has the advantage of…”
This is part of my Pandora’s Box theory coming into play.
The levy ends up being extended to EVERYTHING ELSE.
Start with an internet tax, and then you’ll have fill a “liability hole” by imposing another charge on services offered by individual sites. Other such “holes” will have to be patched with a charge on devices of all kinds, software, all forms of recordable media/storage items, etc.
How much will be enough to make everyone “happy”??
_______________________________
“…the issue is tracking metrics and monetary delivery systems.”
Yet, you don’t think the proposal is too complicated?!
- Who’s gonna track all the usage?
- Who is actually trustworthy enough to do so?
- Don’t we already have exploding privacy issues?
- How many agents will such a scheme need?
- How much will that take from the total?
- How do you keep the extra cash from just ending up in the labels’ pockets anyway??
These are just a few of the immediate questions that come to mind. And, once again, I’ll avoid bringing DPI into the discussion, even though it certainly belongs there.
_______________________________
“The overhead, in the Canadian situation, isn’t extremely high, and the levy is small enough that consumers are (reasonably) used to it.”
How much does the blank media levy actually add?…
Honestly, I have no idea, but currently, CDs are approaching TWICE the price of the more-capable DVDs. Logic would seem to dictate the levy is responsible for that, since there are no rational reasons. (Also goes back to what I said about what will happen to an internet tax – how much will the average internet service bill explode to, under the same plan?)
And as it was discussed here previously, considering the insignificant portion of that seen by the artists, and the disproportionate amount kept by the labels and the “non-profit” collectors, it’s safe to say the levy’s been a failure.
October 30th, 2009 at 1:48 pm
DA:
You note that a levy or tax turns into an extortion system; perhaps the levy could increase slightly as the various parties producing content try to ‘get in’ on the levy. A solution could be to identify a particular (fixed) rate for the levy, and have it increase by X (where X=rate of inflation, or something along those lines), and then an organizational metric for distributing funds. Figure every Y number of years it could come up for organizational review, and ensure that the board has a balanced groups of people sitting on it.
Currently, the Cnd levy stands as follows:
$0.24 per unit for Audio Cassette tape (40min or longer); $0.21 per unit for CD-R Audio, CD-RW-Audio & MiniDisc; $0.21 per unit for CD-R, CD-RW (non audio). In 2009 the levy on CDs and MiniDiscs will rise to $0.29 ( Source )
This doesn’t seem particularly excessive to me. To date, over $100 million has been dispersed. Clearly, this doesn’t represent anywhere near the monies recording groups clamour for, but it does represent the partial value of downloaded media. Arguably, the reason so little is now collected/distributed is based on a repealing of a media levy on portable music devices (because of the overreaching that you note before – a Canadian judge stopped it because it wasn’t part of the initial levy).
As for ‘how do we make people happy’, I would think that the method to do this is a (very low) cost per GB/TB or something along those lines, with rates being tracked per a formula based on average drive size increases that reduces costs on a per GB/TB basis. This can be done prior to the levy being restarted/started.
As for metrics, this isn’t hard, and doesn’t involve any use of DPI whatsoever (I’m cautious about the use of DPI for this kind of work, especially given its regular failings, which I write about as an academic focused on DPI). Get a couple smart programmers together to put together an aggregation system that identifies the number of downloads of songs/artists/albums across a wide set of sites (many of which might be interested in providing these numbers). Either the sites or the aggregation system can have significant anonymization protocols built it or scrub data sets after collation so that the data points can’t be tracked back to particular sites and/or individuals. Note that I’m note thinking of counting users, but aggregate numbers on sites. While it may not be 100% accurate, it will capture the long-tail better than the present evaluation metrics, as used in Canada, do. The nice thing is that, once it’s paid for, this is largely self-running. Have new sites added to the scape as they become prominent, and develop the overall system so that it’s modular enough to facilitate new scape systems as P2P moves to different platforms to account for P2P’s dynamic landscape.
As for how to ‘keep cash from the labels’, this is, again, organizational dynamics. It’s dealt with there. There isn’t any reason why labels, to an extent, *shouldn’t* receive some of the money. If they (not the artist) control/own the copyright on the song, then THEY should (from a legal sense) be the first receiver of monies. If you want to change that, fine, but that’s a larger issue of profit sharing and ownership of copyright (that rightly needs to be had) that doesn’t necessarily undermine a levy-distribution system. As to the point about current distribution mechanisms, I would say that it demonstrates a need to *reform* rather than *scrap* the levy system.
I guess what I’m saying, in the end, is that this isn’t an unworkable solution (it’s also not a stand-alone system, and needs additional means of revenue support so that fans can deliver full-value to artists as they choose). The levy-system benefits consumers because it is clear. It doesn’t try to equate one download to one sale, and instead looks to capture partial value. Focusing on personal electronics/mobile gear means that ISPs have no reason to end their status as common carriers and apply inspection appliances in a massively granular way to data traffic. Anonymity and privacy under a levy system are maintained. Do consumers pay a slightly higher price for blank media/devices? Sure, but I don’t think that’s anymore unreasonable than paying the trivially small environmental taxes for new computer equipment.
October 30th, 2009 at 6:58 pm
@Christopher:
I’m neither sad nor sorry; it’s unworkable. It leads to a black-box, as described, and to money skimmed off all along the chain. It is looking back at the past, and trying to make it fit, it is not looking forward to the future.
We have recently solved the issue of how to do marketing and distribution of recorded copies, and we can do it at no cost, and achieve a wider distribution of knowledge, culture, and art, than ever imagined before.
Trying to attach a cost to it, in this way or any other, is adding friction and limiting the potential of what we could achieve. We need to see a free market, that results in a willing buyer and a willing seller (Crosbie Fitch is very much right in what he says about this).
Not taxes, control, tracking, and centralised collection and distribution, that only ends in pain. Please let’s not go there.
As always here, I speak first for myself, and not necessarily for any other organisation. While I am a member of the UK Pirate Party, and contribute there, my views are my own and do not necessarily reflect Pirate policy.