Why A Music Download Tax Is A Bad Idea

from the unintended-consequences dept

In the last few weeks, a lot of folks have been submitting the story about the Songwriters Association of Canada (SAC) proposing a $5/month "tax" on ISP connections, which could then be used to reimburse songwriters and musicians for downloading. I've resisted writing about it, because it's been discussed at length in the past when it's been suggested. The one difference here is that a group of musicians is actually supporting it. However, Michael Geist does an excellent job explaining why it's not a very good idea. Beyond pissing off those who don't feel they should subsidize the rest of the industry, it's not at all clear it's necessary. There are plenty of other business models that the music industry can use to support musicians and songwriters that don't require a special tax. However, the biggest reason, as Geist points out, is the second you do this, plenty of other industries will come out of the woodwork demanding a special fee get applied to internet connections as well. Newspapers that think Google and Craigslist are "stealing" from them will demand a special "news tax." And then think of all those other industries who claim they're being impacted by the internet. You'll have a special auto-mechanic's tax, to pay for mechanics who are upset about the DIY info found online. The "knitting tax" for all the free knitting patterns online. I understand that AAA may be upset about Google maps. Travel agents want that "travel tax" to pay for all that business that Expedia has cost them. Where does it stop?

Filed Under: canada, downloads, isp tax


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  1. identicon
    Ben Robinson, 26 Feb 2008 @ 1:37pm

    Why not license instead

    I can understand why people might not like a compulsory tax, a good example would be my parents, i don't think they have ever downloaded a song in their lives and I’m not sure they would know what to do with it if they did.

    Instead why not have an optional licence. Pay an annual fee, download whatever you want from wherever you want and it's all legal and the money gets distributed to the copyright holders. Of course this would mean some kind of tracking but public performance royalties get distributed in this manner and it would be much easier to track downloads than it is to track performances in every bar, club, venue and radio station round the world.

    If the recording industry realised they are no longer in the business of distribution, and are in the business of producing and promoting content then it all seems wonderfully simple. It could set up a global database of music, issue licenses to consumers and say to online service providers give our music away for free so long as you make sure that the consumer has a licence and tell us what they download. It would change the fortunes of the music industry over night. Many online services would pop up delivering music to consumers using whatever business model they could think of to make their money, this would drive demand for the music and thus the licenses.

    You wouldn't eliminate piracy because there is always going to be the hardcore pirate bay/bit torrent crowd, but the plain fact is that all content industries have for years lived with the 80/20 model where so long as 80% of the content is purchased they can cope with the 20% that is pirated.

    Of course this is not going to happen any time soon. The recording industry is desperately trying to cling to an outdated business model that is centred around controlling distribution and extracting a per copy royalty. The idea that they should throw this out of the window for digital downloads and concentrate on what they are good at making and promoting music terrifies them, but I firmly believe if they do not embrace this then they will surely die.

    Technology moved on 10 years ago, come on recording industry, at least try and catch up.

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