The Problem With A Music Tax

I’ve written about the SAC‘s proposal to legalize music file sharing several times in the past, giving it mixed reviews. It’s not a new idea, but it’s one of the first times an organization of artists has proposed it, and some record companies are entertaining the idea as well.

I’ve come to a decision about the proposal: I don’t like it.

Royalties were not designed for the digital age. The proposal suggests what essentially would amount to a music tax. There is no way to opt-out and it applies to everyone with an internet connection. Since when are royalties taxes? Since when do royalties apply to everyone? Royalties were meant to regulate a few large distributors and broadcasters. In the digital age, everyone can be a distributor or broadcaster. It just doesn’t work.

The CMCC describes this as a “forward thinking approach.” It’s a forward thinking approach, but from backward thinking minds. Royalties are not the answer to everything.

The no opt-out clause really makes it a deal breaker. The proposal is to charge everyone a fee, regardless of whether or not they are actually infringing any copyright claims. It’s aptly described as a “you’re a criminal” tax.

The EFF writes:

We are big fans of a collective licensing solution for the music file-sharing dilemma: music fans pay a few dollars each month in exchange for a blanket license to share and download whatever they like; collecting societies collect the money and divvy it up between their member artists and rightsholders…. But this should not turn into, as some have called it, an “ISP tax.” Any collective licensing solution should be voluntary for fans, artists, and ISPs alike.

Further, what sort of precedent would this set? Mike Masnick writes:

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?

I do applaud the SAC for bringing forth this proposal and I’m proud to be a member. It is “forward thinking” in the sense that it seeks a way to make the new technology work, rather than to pretend it can be somehow stamped out. But I don’t think this particular proposal provides an answer.

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3 Responses to “The Problem With A Music Tax”

  1. Kevin says:

    Blaise – loving the blog, brother.

    The problem with the “blanket tax”, is it is a source of guaranteed revenue for the big guys, and offers no incentive whatsoever for performance in the music industry. If the tax is put in place, innovation in the industry will stop dead in its tracks. There’s got to be another way to do this…I just haven’t figured it out yet!

  2. Blaise says:

    Thanks man!

    I agree, the EFF lays out some differentiators between their view of this type of alternate compensation system, and the tax-like variants. The involuntary nature of the SAC’s proposal takes the competition right out of the equation. It’s a system of complacency as opposed to one that would encourage innovation and lead to a better result.

    There must be a better way. :)

  3. [...] embraced, that digital locks and lawsuits were not a way forward, etc. But it was a non-voluntary, “you’re a criminal” tax that could open the floodgates for other industries to demand similar [...]

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