Fie-sharing and Music Tax

02007-12-14 | Copyright, Music | 10 comments

50 Cent: File-sharing ‘doesn’t hurt artists’ | News | Guardian Unlimited Music
The industry has to “maximize its income from concerts and merchandise”, he said, adding: “It is the only way they can get their marketing money back.”

Have you noticed that seeing a live-show has become quite expensive? In the nineties the idea was to tour to sell CDs. Many bands received tour-support from their record labels because a tour did not have to break even or make money in order to be successful. The idea was that CD sales would more than make up for the lack of touring profits. Shows tended to be huge and extravagant, because the aim was to sell CDs. One could say the live-show was a commercial, an advertisement for the CD. Basically the artist’s income (plus the people involved in either recording or touring, e.g. musicians, roadies, engineers…) was derived from many people paying very little – the cost of a CD.

Now CD sales don’t amount to very much and artist have to make a living from touring. The result is that ticket prices have gone up and may no longer be affordable for students, for example. The irony is that the group of people most likely to share files is also the group that may not be able to afford a live-show as a result.

Another result is that current major label contracts specify that the record company also receives money from the artist’s touring and merchandise income – not just the sale of CDs and downloads. A major label deal now reads much more like a management contract – a percentage of ALL income.

I am starting to believe the only sensible thing to do is to levy a tax on every single device that plays or amplifies music, including amplifiers, headphones, loudspeakers, computers, music-players of every shape and form etc… – this is not a new idea: in the Nineties there was a tax on DAT tape, because it was the first medium that could create a perfect copy…

Stretched over so many devices the amount of tax a person would end up paying would be small, smaller than the sales-tax perhaps. BMI and ASCAP have a lot of experience in dividing up income for musicians. For many years they have divided fees for use of music in film, television and radio. They could divide the money derived from the music-tax by looking at how many times songs are being downloaded. Maybe music would indeed become free, there would be no more RIAA raids, and the artists would simply receive their share from the music tax.

I cannot find a downside to this idea. Concert ticket prices could come down again and live-shows would become more accessible. File-sharing would simply become unnecessary because music could be downloaded for free.

PS: searched and found this interesting EFF document from 2004 and this from Prof. Lessig.

10 Comments

  1. Vic2rh

    Thinking about having a “tax for music” system, the most contentious part would probably be around “Who gets paid what amount?” and “Could the technology that determines payment be manipulated for a profit?”

    Well, the current system is manipulated in ways that aren’t obvious, so if the new system was at least more transparent then that would be an improvement. Getting corporate sponsorship out of music would definitely be a good thing!

    Reply
  2. ottmar

    The current system is extremely opaque… well, just head over to Fripp’s diary and read some of his stories…

    Reply
  3. LR

    I’m dead against taxing gear as a means of compensating artists. Blank tapes & CDs are taxed in Canada, and as far as I know, the $$$ never gets out of General Revenue. It’s a highly impractical thing to implement fairly, and it assumes all gear is used for piracy. Governments are always keen to oblige with guilt taxes, yet somehow they never seem disseminate them according to the ideal.

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  4. ottmar

    @LR: I have to disagree with you. BMI and ASCAP have been collecting royalties for musicians for many decades. This would not be much different. No reason to involve the government. And, ALL gear IS used for listening to music.

    Reply
  5. eddie

    i don’t think taxing every piece of music paraphernalia will solve the problem. however, i dont mind the idea of ‘exclusive purpose taxing’. Say for items which purpose is solely to store/playback music, but at the same time has the capability to do illegal things such as mp3.

    Reply
  6. eric

    certainly a tricky thing. i would imagine that the more practical thing would be to discount students. I’ve always been keen on that idea because it promotes one more reason for kids to enroll in school.

    slightly off topic-i rather enjoy the thought of the emphasis going into the live performance. I think with all the copycats and mediocracy that will continue to increase with our ever growing population this will push the arts, in general, into more evolving states. it will allow a more genuine art to emerge.

    Reply
  7. ottmar

    @Eric: I prefer the irony and no discounts.

    The irony is that the group of people most likely to share files is also the group that may not be able to afford a live-show as a result.

    Reply
  8. Chris

    Ottmar, this is a frightening suggestion. I appreciate your desire to protect your industry regardless of whether I agree with your causation or not, but please don’t inadvertently damage mine in the process. Storing music is but on use of computer storage and an infinitesimal one in comparison to the ever growing usage of computing in society. I buy tickets to every show when you’re in town and have purchased a number of your CD’s. I greatly appreciate your music, but I really think I pay plenty thank you. I don’t think “taxing” my profession to fund yours is the answer. This really has been a disappointing experience, and I truly hope you rethink your position on this.

    Reply
  9. ottmar

    @Chris: reading about my idea was a “disappointing experience”? I assume you don’t like the EFF’s idea either. That’s fine. But, disappointing experience? Really?

    I still like the idea, actually. I spend hundreds of dollars on music every year. The EFF’s idea of paying $5/month sounds incredibly inexpensive and very exciting. Just imagine ALL music being available to a young person. The discovery! No more “I’d love to check that out, but what do I do with the CD if I hate the music…”

    Reply
  10. Chris

    Ottmar: I greatly appreciate your music and your art in general. Honestly I find them inspirational. And it was disappointing to read your support for, what is to me a closed minded and short sighted solution.

    With regards to the EFF idea, it has one key aspect that your suggestion lacked, voluntariness. Your proposition also disproportionately affected unrelated businesses rather than file-sharing individuals.

    That being said, I love the EFF idea. I too spend a significant amount of money on music and would jump at the chance to increase my music consumption while nearly eliminating my costs. However the plan does seem true to EFF form, lacking in realism. Just one key point, missing in EFF’s equation is the cost of bandwith. ISPs will not “love” to lay out significant and ever increasing costs without an expectation of significant returns. Further, the ultimate question becomes one of ownership? Can I theoretically pay a one time fee of five dollars download limitlessly for one month and forever own my new found music? If not, we already have subscription service and no one is interested.

    Reply

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