Tax On MP3 Players May Return

Admittedly, I cannot recall the last time I purchased a music CD but I do
have a half empty box of blank CDs on my bookcase. I also have an iPod
that I use regularly to stave off the monotony of my commute. The current
Private Copying Levy allows people like me to actively download music
without fear of legal reprisal by ensuring that artists are compensated –
if not adequately, then at least consistently. Yet, there is something
defeatist about a levy, which, unbeknownst to many consumers, is currently
included in the price of a blank CD and will potentially be hidden in the
price of MP3 players.

I understand the moral argument behind the proposed MP3 player tax;
musicians deserve to be fairly compensated for their work. Ultimately, a
compensation system is in the public interest. If musicians feel that
they are being fairly compensated for their efforts and that their rights
are being respected, then they will be encouraged to continue creating and
making their music available to the public.

However, from a practical standpoint, this proposed levy seems to only be
a stopgap measure designed to collect short-term compensation but ignorant
of long-term consequences. Blank CDs were the first ‘recording mediums’
to be targeted with the Private Copying Levy in 1999. If the court
approves the proposed tax on MP3 players, it will not likely be long until
other technologies are also brought within the scope of the levy.
Computer hard drives, memory sticks and zip drives could potentially all
suffer significant price increases. While most consumers are undoubtedly
price conscious, increases at the cash register could have serious
repercussions on the producers and retailers of these technologies too.

The use of computer technology to download music and other copyrighted
files is quite prevalent and cannot be expected to subsist anytime soon.
As new technology develops, its prevalence will only increase. With an
ever-expanding scope, the Private Copying Levy is unwittingly designed to
let rights holders have their copyright cake and eat it too. The CPCC has
collected over $100 million for Canadian artists from the levy on blank
CDs (The Toronto Star, August 1, 2007). In theory, as each new recording
medium has the levy applied, the consumer compensates the artist multiple
times for the privilege of copying songs for their personal use.
Similarly, the Private Copying Levy is passed along indiscriminately to
all consumers, regardless of whether the blank CDs and MP3 players are
being used to copy protected material.

I am certainly not advocating taking advantage of the artists but I do
believe that a certain degree of responsibility lies with the musicians
and record producers to actively protect their music. Sites like LimeWire
allow artists to block their songs from being downloaded, uploaded, and
shared. Some artists, like Radiohead, seem to recognize the reality that
their fans are price-conscious, tech savvy and, if not totally ignorant of
copyright consequences, certainly blissfully unconcerned with their
relevance. At a minimum, Radiohead has reduced their own costs and forced
consumers to at least briefly consider the price they are willing to pay
for the pleasure of listening to Radiohead’s music. The same cannot be
said for a levy hidden in the price of an MP3 player. If awareness of
copyright issues and fairness to the rights holders is at all a concern, a
hidden levy is not an adequate solution.

Any proposed solution must be proactive and public. The predominant issue
should not be about merely providing compensation but about acknowledging
the actual rights of copyright owners. Americans have recently resorted
to legal action, which, although severe, has certainly brought the issue
of downloading copyrighted material to the fore (Virgin Records America,
Inc v. Thomas). Another rather drastic solution might be to shorten the
duration of copyright protection but to strictly enforce it during its
term. This could help reduce the apathetic attitude many Canadians seem
to have toward copyright issues while simultaneously protecting the
artists’ rights. Alternatively, subscription-based models of online file
sharing should be actively promoted, with prorated percentages of the
membership fees being allocated to the artists represented in the
program.

While these solutions may seem extreme, they are at least functional
alternatives to the Private Copying Levy, which is neither practical nor
powerful. A secretive tax with potentially infinite scope is
counterproductive to any goal of creating substantive fairness and
respect. Lasting public awareness of copyright issues can only be
achieved through public acknowledgment and enforcement of artists’ rights.

2 Comments
  1. In the above well-written excerpt, many valid criticisms are made about the levy on mp3 players. Personally, I am not entirely against the levy. If some measure must be taken to try and compensate musicians and record producers, I would prefer to part with an extra $75.00 per mp3 player, rather than be potentially liable for thousands of dollars in a lawsuit against Sony BMG Music. Also, the levy may be seen as “legalizing” P2P downloading, which can be seen as a step toward shifting the focus toward user rights in the copyright balancing act.

    My concerns about the levy are slightly different than those mentioned above and focus more on how the money will be distributed. The Canadian Private Copying Collective currently uses airplay data and data derived from the sale of CDs to distribute proceeds from the levy. However, with the way music can be digitally disseminated today, the collectives will have no accurate way of deducing what music individuals download onto their mp3 players.

    Also, it is arguable that compensation is required at all. A recently released study commissioned by Industry Canada suggests that file-sharing increases music sales, and a report from Statistics Canada shows that Canada’s sound recording and music publishing industries turned a relatively healthy profit in 2005. Before deciding to implement a levy, the government should pay close attention to how the nature of the music industry and music consumption has changed.

  2. I certainly appreciate and agree with the bulk of Joanna’s comments. However, if we are going to step back and look at alternatives to the copyright levy then we should start with the basic concepts embodied in the act of copyrighting. The “right” of an artist to copyright his or her work presumes that the work is original and “owned” by that artist. I don’t believe it is that easy to show that artistic ventures (whether literary, musical, visual, or otherwise) are unique and completely the property of a single artist. To do as much would require the assumption that the artist relied on no external influences and essentially developed material in a vacuum. For a better written and researched discourse, please see “The Ecstasy of Influence” by Jonathan Lethem. (Harper’s February 2007)
    The artistic communities (and particularily the recording, and to a lesser extent movie, industries) need to apply their creative talents to exploring new avenues for revenue generation. People pay for a particular product and in this case, product should not be considered “artistic content” but features such as music quality, download speed and access, live music, artist paraphernalia, and more.
    Joanna rocks!

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