A New Proposal to Protect Canadian Musicians: The iPod Levy

Amanda Carpenter is a JD Candidate at Osgoode Hall Law School.

Along with the large amount of copyrighted music that gets copied in Canada without compensating the musician, there are attempts to make sure that some money goes back to Canadian musicians. For example, every time you buy blank media such as a CD or cassette in Canada a portion of the price paid goes to Canadian publishers, musicians and record labels. This has been reported to be an effective way of compensating musicians whose livelihood depends on the returns from their music and thus a way of growing Canadian culture.

Jennifer Ditchburn of the Canadian Press reports that since 2000, $180 million has been distributed through the system. However, this money has been received by over 97,000 rights holders. That’s less than $1,600 over ten years or an average of less than $160 a year for each of these rights holders, “most of whom” would supposedly “not be able to continue their careers without this revenue.” So the effectiveness of this system may be questionable. In fact, it may be those imposing and collecting the levies who are the ones really benefitting.

After the purported success of this program, a new idea has been proposed by New Democrat MP Charlie Angus (and a former member of the Montreal punk scene): an iPod levy. More specifically, the levy would be imposed on devices that fall under this definition of “audio recording device”: a device that contains a permanently embedded data storage medium, including solid state or hard disk, designed, manufactured and advertised for the purpose of copying sound recordings, excluding any prescribed kind of recording device. This means an iPod-like device, whether it has a hard disk (iPod classic) or a solid state/flash disk (iPod nano, iPod touch, etc). It does not really cover laptops or hard disks unless they are “designed, manufactured and advertised for the purpose of copying sound recordings”. This makes sense, since many people working at companies aren’t even allowed to download music on their company laptops or PCs. So why should their company pay a levy on their computers or hard disks?

In return for this levy people will be able to legally transfer music to devices like iPods. This is not a new idea. Back in 2007, the Copyright Board of Canada decided that the blank media levy should extend to devices like iPods. This would have meant a $75 levy on each iPod (with over 30 gigabytes of storage). In this world of endless downloading and copying, it is not uncommon to hear that since the arrival of Napster some have completely stopped paying for music or that some have no less than 9,000 songs downloaded for free on their computer or stored on their iPods. Hence, a levy that would give musicians (especially Canadian ones) more money for their work might seem to be a good idea. After all, you don’t expect to get gasoline or groceries for free, so what makes music so different? However, others thought otherwise, especially the Conservatives.

For this measure to work, it must be supported by the government. However, so far it only has the full support of the Bloc Quebecois, which is not enough. The Conservatives have taken a particular dislike to the idea. In doing so, they seem to have bought into a “user-rights” philosophy where getting music for free is justified since it seems to benefit the user, at least in the short term until musicians find that they can no longer support themselves through their music and decide to do something else. The Conservatives have not yet introduced other amendments to the Copyright Act that some say are long needed. Heritage Minister James Moore also states that “This is a very serious hit to consumers that could impact them, and if the NDP are as committed to raising taxes this week as they always have been, then this is a real threat.” However, Angus has said that he wants to make sure that Canadians are not unfairly taxed. Moore also states that “It’s not in the interest of the music industry to make it more expensive to buy the devices on which they’re listening to Canadian content,” he said. “It doesn’t serve the Canadian cultural community.”

However, for those interested in ensuring that both the interests of creators and consumers are balanced, it seems that this levy would go towards serving both Canadian musicians and the public. Perhaps, as Angus says, this is Canada’s chance to strike the balance right. But the question must be asked as to whether enough money will go to Canadian musicians from this levy, or simply to those imposing and collecting the levies. And perhaps it will result in Canadians buying their iPods elsewhere for financial reasons, which will result in this new bill being detrimental to Canadian retailers like Future Shop.

  1. The proposal is pretty much entirely focused on one act: ripping from CD to MP3 player. There are a few major problems with that.

    First, CDs are on their way out. The price you pay for a download on iTunes or Amazon includes the right to make personal copies. So people who buy an iPod and intend to purchase their music online are paying $75 for a right they don’t need.

    Second, it doesn’t cover all of the devices with removable storage (basically everything other than iPods).

    Third, it doesn’t cover the intermediate (and, if you don’t own an MP3 player, final) step of ripping to your hard drive.

    We should get rid of the levy system and introduce a user right to make personal copies. If the music industry feels they’re losing out from all these copies, they can raise the price of the music to compensate. But they won’t, they’ve already decided that 99 cents is a fair price for a song with the right to make copies included.

  2. Ms. Carpenter’s article is, generally, a fair recap of the issue. However, she asks “whether enough money will go to Canadian musicians from this levy, or simply to those imposing and collecting the levies”.

    On this issue, she is uninformed. CPCC’s costs of operation are well within the range of most collectives in the music industry. Our financial data is open to the public on our website for those interested on fact, as opposed to innuendo. CPCC is a non-profit collective, owned by the groups representing those songwriters, performers and others who receive the proceeds of the levy. There is no incentive for CPCC to run up excessive costs. We invite anyone interested in this issuecto seek further information from the CPCC website.

    David A. Basskin
    Canadian Private Copying Collective

  3. > The Conservatives have taken a particular dislike to the idea. In doing so, they seem to have bought into a “user-rights” philosophy where getting music for free is justified since it seems to benefit the user

    You are completely misrepresenting the Conservatives position. The Act is not about getting music for free!

    Downloading music will still be illegal. The Act aims to allow transferring between media– if I buy a CD, why shouldn’t I be able to import it onto my iPod?

    I would characterize the Conservatives position as saying you should pay for material once, not every time you store it on new media.

  4. Sorry, I said “I would characterize the Conservatives position as saying you should pay for material once, not every time you store it on new media.”

    But maybe I was wrong there since I think it’s still copyright infringement to transfer between media. So I guess the Conservatives position is “we shouldn’t force consumers to pay for this right using a levy on media”. Anyways my point stands that you are misrepresenting their position.

    If I may inject some opinion here, I still like the Conservative position better since, in reality, nobody gets sued for copying a CD onto their computer/mp3 player.

    Billy Barnes, you are a gentleman and a scholar. The right solution is a change in copyright law, not a levy that pays for something that common sense dictates we should be able to do.

    Back in the printing press days, there really weren’t any transfer of media issues. It’s not like people were making copies of manuscripts because they wanted a copy for the bathroom.

    Today, making a copy is cheap or free. CDs are often damaged, so why shouldn’t I be able to keep a copy on my mp3 player? I’ve bought CDs before, and only taken it out of the case once: to transfer it onto my computer.

    Do you honestly think this is a right I should have to pay for? This isn’t striking a balance– this is making us pay for a right that we really should be getting for “free” (as part of the original purchase).

  5. What just stuns me is that all of these “levies” are so readily accepted by the legal experts. The focus is entirely on infringers. What I am tired of is paying essentially twice for music. I purchase all of my music legitimately from both online services like iTunes and via physical CDs. Yet when I back this music up so I don’t lose it in a data disaster, I am *fined* for doing so. I am paying the levy for music I have already purchased to keep it safe. This is to say nothing about backing up critical data and documents I have created on physical media which I am also paying a fine for due to storing in on a writable optical media.

    Fair use. Penalize the criminal infringers. Stop prosecuting the legitimate customers. Also, stop fining people that aren’t even using the material for the levied scenario. It is a cash grab, and always has been. It has little to no effect on the market realities of the music industry. Judging from Apple’s latest earnings, and the success of the iTunes music store, I would say the revenue is flowing just fine when it’s convenient, fair and reasonably priced for a consumer to purchase the music and movie for their enjoyment.

    The idea of purchasing for the right to “format shift” which is a popular term for moving it between media like CDs and iPods, is ludicrous and unfair to the consumer. It expressly makes it desirable for the manufacturers AND for the producers of the works to make incompatible, finite-lived technologies that we must repurchase our libraries on over and over as they want to continue the revenue stream for no extra value. To say nothing of complete lock-in on the devices and further incompatibility. These laws discriminate against law abiding people by charging them in essence twice for purchase, and further encourage lock-in and abuse of consumers by the media companies.

    As the collective of Canadian artists stated clearly, “quit suing our customers”. Go after the people doing the infringing and quit abusing those of us that are paying for you to continue to create your great works.

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