Music Tax or Subscription Comments

02007-12-24 | Computer, Copyright, Music, Musings | 2 comments

This way-too-long entry refers to this post, which suggested a music tax mentioned the EFF subscription model.

On December 21st Chris comments:
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.

Your industry : my industry? What is your industry? Designing computers, making computers, selling computers? Software perhaps? Storing music and burning CDs is a huge part of the world’s daily computing. I would not be surprised if music and movie files take up the biggest amount of space on the average computer. Half the world’s population is under 25 years of age. What do you think is on their computers? Spreadsheets? A draft of an original novel?

Rip, mix and burn was Apple’s slogan in 2001. The BBC wrote in February of 2002:

The music industry has pointed the finger at illegal music downloads and CD copying, or burning, for a 10% drop in sales of compact discs in the US in 2001.

Before 2001 most studios had a CD burner, but they were expensive and not widely available. Suddenly every computer came with the ability to burn a CD. It would be interesting to look up CD-R sales in 2000 versus 2001 and today. My feeling is that sales of recordable CD media doubled between 2000 and 2002 and enjoyed a steady rise until the iPod came out. I have a computer in my living room that is only used for music. 230GB of music files. I don’t think I am the only person to use a computer solely for listening to music, ripping my CDs, cataloguing albums etc.

In any case, which hardware should be taxed – that’s the sort of detail that would be subject to much wrangling, I am sure. It’s for the lobbyists and politicians to figure out, I suppose.

Peter Gabriel spoke of musicians having lost on average about 50-60% of their income due to diminished album sales. Today Reuters had a news item about concert revenue being down by a lot. The music business is trying to figure out how to survive and we have to be willing to look at any idea.

On December 23rd ottmar comments:
@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…”

This would be something for a Yale or Harvard or Stanford business class to explore: to compare the taxing of devices that play or amplify music with the EFF’s idea of a monthly music subscription amount (different from a tax only in name). Projected revenue and all of that fun-stuff. Maybe a combination of both.

On December 23rd Chris comments:
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 bandwidth. 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.

The way I understand the EFF idea, the monthly fee would not be voluntary at all. That is, if you pay it, your use of free content is legal. If you do not pay, you are not only unable to access the big pools of content, but sharing files with somebody who does have access would still be illegal.

Ownership? Let me refer to my post “Digital Media is not Stuff”. All of the arts are rapidly moving to a license-model. That’s true for photography and the fine arts, but also for software, movies and music. The problem with existing subscription services is that they are tied to one subscription provider and usually to specific devices. That’s why no one is interested!! What makes the EFF model different is that music would be without DRM and would play on any device. Yes, it would be a subscription in the sense that one should not be allowed to pay $5 for one single month, in which one then proceeds to download every piece of music available – since all of the world’s music might fit in ones hand by 2015…

See this article:

“More importantly, if this trend continues, and the cost of storage continues to decrease, we estimate that somewhere around 2020, all the world’s content will fit inside an iPod, and all the world’s music would sit in your palm as early as 2015,” Cassidy surmised, “rendering the CD format unnecessary.”

Who will provide this music for free? Well, every single hardware manufacturer wants to have content for their devices. That was the reasoning behind Sony’s acquisition of Columbia Records in the Eighties and that would be the reason why all or most hardware manufacturers would maintain free content sites. This would also be true for stores like Best Buy or Circuit City. Buy a computer/mp3-player/stereo-system and get your free content at the same time. WalMart, Target, – they might all provide free content.

Anyway, it’s just an idea. I think it’s a good one and love the thought that kids could have access to ALL music. But, I have little faith in politicians or the music biz to take such a radical step. By the way, in the 1920s, radio-broadcasts were not supported by advertising or listener sponsorship.

The stations owned by manufacturers and department stores were established to sell radios

Meaning, there is a long history of giving away content to sell hardware. Also, please read Wikipedia’s histories of ASCAP and BMI – you will notice that the problem was very similar: radio, which started out with live-performances, began to play recorded music and music publishers were freaking out, fearing that sales of sheet music would stall. The performing rights groups, ASCAP and BMI in the USA, started charging radio stations a flat fee, which was collected and divided among their members. History! It does repeat itself. The only difference is that instead of radio stations playing a flat fee for content (that’s already happening for the better part of a century) it would now be the public that would pay a flat fee for content (EFF subscription model) or a music tax on music-playing devices.

I do hope that this post neither frightens nor disappoints you, Chris. :) Life is too short and precious. We are just exchanging points of view. I appreciate your comments, because they make me look at the problem before us in a different way. I am lucky, I have an audience that can sustain me at this point. The solo-performance at the beautiful Vilar Center in Beaver Creek was sold-out. But what about the next generation of musicians? What about the musicians whose work does not appeal to a lot of people? Van Gogh is a great example of a painter who was neither appreciated nor financially rewarded during his lifetime. Just because it is not very popular right now does not mean that it is not important. Let musicians have day-jobs, you might say. Most of us do. Only about 1% of all musicians can live from concerts and album sales… They say that the classical orchestras of the 20th century were the best orchestras in history. Why? Because they were professional orchestras and that meant that every musician played his/her instrument every single day. Bach played most instruments better than the musicians in his orchestra, because those were the plumber and school teacher and shop-keeper, who played an instrument as a hobby. J.S.Bach was the only professional.

Who knows, maybe in a hundred years we will only let computers compose music for us. Maybe the musician as a professional will go the way of the knife-sharpener or tailor. What a world that would be…


  1. Will

    Preach it brother!!

  2. Chris

    Thanks for giving this some thought. It really is appreciated.

    To answer your question, I work in R&D. I do a lot of work in Human Computer Interaction as well as election technology.

    I do disagree with your assesment of global computing usage. It seems seems you have a picture of computing dominated by dorm room laptops and home media centers. I don’t think I like the idea of taxing those either, but they’re not really my concern. My concern was over your statement of “every single device that plays or amplifies music” and its impact on global computing.

    Your revision to “It’s for the lobbyists and politicians to figure out, I suppose.” leads me to believe you’ve never worked much with lobbyists or politicians. Politicians ask people who know the answer or find someone with crediblility and answers that align with their pre-existing policy. Lobbyists look to secure the best possible outcome for their client regardless of anything else. (i.e. tax everything) These are issues the artists need to have informed opinions about.

    If the method of taxing computer storage devices is adopted, you’re not only affecting technology industries, you’re affecting industries that use any of these technologies, directly or indirectly, and particularly those that store a particularly high volume of data such as financial services, healthcare, insurance, manufacturing, law, and retail industries. Probably the most affected industry will be science. In the next 10 years scientists are looking at processing 10 million gigabytes of data every hour.

    Unless of I’m missing something, your description of the EFF system meets my requirements for being described as voluntary. Pay and get legal access to sharing; choose not to pay and don’t get legal access.

    So if you only have access to the music when you’re still paying: what would make me give up the copy on my HD, huh? An honor system? A kind of DRM? What? (your words not mine)

    Apple is following history’s lead in giving away content to sell hardware. The largest reason they are so successful with their legal digital media sales is that they subsidize their costs knowing they’ll make it back on the iPod.

    While this discussion has become pretty long, my initial attempt was to serve a warning of unintended consequences. My point can pretty much boiled down to:

    Computers are used to steal a lot of things. If you taxed each industry victimized by someone using a computer, no one could afford computers.

    P.S. A reference supporting my 10 million gigabytes claim:


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