• Hi Guest: Welcome to TRIBE, the online home of TRIBE MAGAZINE. If you'd like to post here, or reply to existing posts on TRIBE, you first have to register. Join us!

More Fee's and Taxes for Music Players.

Hi i'm God

TRIBE Member
Copyright body may slap levy on digital music players
Would boost price of storage media
Economy will suffer, retailers say

Link

TYLER HAMILTON
TECHNOLOGY REPORTER

That 20-gigabyte MP3 player going under the Christmas tree this season could soon cost 20 per cent more if the Copyright Board approves a proposed levy tomorrow on the sale of digital music devices.

It could also mean new levies on recordable DVDs, removable flash memory and micro hard drives, as well as increased tariff rates on blank cassettes and recordable CDs, assuming a music-industry group called the Canadian Private Copying Collective, or CPCC, gets its way.

Claude Majeau, secretary-general of the Copyright Board, confirmed yesterday that a decision on the controversial levy is to come out Friday morning.

Both the CPCC and a group of electronics manufacturers and retailers aggressively fighting the levy have been arguing their respective views since the Copyright Board began formal hearings on the matter in January.

"It's the kind of decision that's likely to leave everybody unhappy," said Michael Geist, a professor of Internet law at the University of Ottawa and technology counsel for Osler, Hoskin & Harcourt LLP.

"The retailers won't like it because they don't like the levy, period. Consumers won't like it because they won't be paying a fair price for the product. And copyright holders will probably feel they're not getting enough."

The CPCC already collects a levy on blank cassettes, recordable CDs and Sony minidiscs, but in May, 2002, the organization, which collects and redistributes the levy on behalf of the Canadian music industry, proposed that existing tariffs be substantially hiked and expanded to cover M3P players and other digital-memory products that carry music files.

The original purpose of the levy was to compensate artists for the widespread activity of making personal copies of music that an individual already owns.

But the growing popularity of CD burners and free Internet music-swapping services changed the nature and magnitude of "copying." Increasing and expanding the levy is a small yet symbolic attempt at compensating artists and record companies for widespread piracy, the CPCC argues.

"Everybody in the private copying collective is hoping we'll get the levy extended to devices like iPods and other MP3 players with internal memory," said Paul Audley, policy advisor at the CPCC.

But Audley said hope and expectation are two different things, adding that the Copyright Board will likely stick with tradition and aim for a compromise.

"It will come down somewhere in the middle," he said. "And that certainly wouldn't reflect what people think (music) rights are worth."

CPCC plans to hold a news conference tomorrow at the Fairmont Royal York to discuss the impact of the decision.

Meanwhile, a group called the Canadian Coalition for Fair Digital Access, or CCFDA, is preparing for the worst. Members include big-name retailers, such as Wal-Mart, CostCo and Staples Business Depot, and high-tech powerhouses such as Intel Corp., Dell Computer Corp., Apple Computer Corp. and Hewlett-Packard Co.

"It's a significant potential hit," said Kevin Evans, vice-president with the Retail Council of Canada and CCFDA co-chair. If the levy does get approved, "we believe it's going to be the (retail) sales clerk that's going to get the full blasting from consumers."

Under the proposed levies, a pack of 50 recordable CDs that have 700 megabytes of capacity will have a 49-cent levy on each disc. Today, that pack costs $29.99, but the levy would impose an additional financial burden of $24.50 if approved.

The general argument against the levy is that it subsidizes the Canadian music industry by treating anyone who buys blank recording media as a potential music pirate, when in fact these same products can be used to store computer files, backup data, software and self-created music and video content.

"What you've got here is a levy that does not sufficiently target its purpose," said Geist.

The retail group, which insists it support the rights of artists and wants to open dialogue toward a better option, argues the levy is too broad and the method of tariff collection and distribution doesn't work.

Members also hold the levy will increase prices on products and tempt consumers to buy in the United States, where a levy does not exist. This punishes Canadian businesses, they argue, and will have an impact on the Canadian economy.

"We've got a levy regime that's way out of date and inefficient," Evans said.

So far, the organization has distributed $11 million back to Canadian artists since it began collecting the levy in 2000. It is expected to issue another $17 million to $18 million between next week and the end of January.

The Copyright Board decision comes as the Supreme Court of Canada begins a landmark copyright case that will determine whether Internet service providers must pay a tariff for being a conduit for the rampant downloading of free music.

That case, being followed by music companies and servie providers around the world, is expected to last six months
 

Dr Funk MD

TRIBE Promoter
Doubling the price of a CDR? That seems a little excessive.

I'd also think our society is a little eschewed in weighing the importance of things when recordable media is taxed at a higher percentage to compensate artists then gas is to protect the environment.
 

Subsonic Chronic

TRIBE Member
Under the proposed levies, a pack of 50 recordable CDs that have 700 megabytes of capacity will have a 49-cent levy on each disc. Today, that pack costs $29.99, but the levy would impose an additional financial burden of $24.50 if approved.
!!!

That's practically double the price, and we're already being charged levies on blank CD's.
 
tribe cannabis accessories silver grinders

Subsonic Chronic

TRIBE Member
How do levies like this get distributed to the artists? Do you have to sign up to a special club once you have a disc out to benefit from this (and if so, is there a secret handshake?)? Or do they just go to the big labels/distributors and these folks spread out the money by how many cd's are sold?
 
Originally posted by Subsonic Chronic
How do levies like this get distributed to the artists? Do you have to sign up to a special club once you have a disc out to benefit from this (and if so, is there a secret handshake?)? Or do they just go to the big labels/distributors and these folks spread out the money by how many cd's are sold?
Until I an actual artist getting some sort of financial statement that they're getting a cut of it, I'm prone to believing that this money will land in the lap of some bureaucrat or middle man.
 

bitchass

TRIBE Member
alright so the new levys were introduced today and i don't believe they changed for cdr and cdrw - only for mp3 players. someone may be able to find out what the old costs were?

new costs are as follows (from this government pdf)

audio cassette 40 minutes or longer $0.29
cd-r or cd-rw $0.21
AUDIO cd-r or cd-rw and MiniDisc $0.77

digital audio recorder (mp3 players with embedded memory)
less than 1gb $2
1gb to 10gb memory $15
over 10gb $25

CNET is reporting that downloading music in canada is now fully legal, but uploading is not.
 
tribe cannabis goldsmith - gold cannabis accessories

bitchass

TRIBE Member
the levies for blank media will stay unchanged through 2003 - only the mp3 player levies were introduced.

thought this would be a hotter topic, people must still be sleeping!

telus just announced a partnership with puretracks to sell music downloads to canadian sibscribers - why would you PAY twice for the music?
 

zee

TRIBE Member
thanks for that bitchass

guess i should stock up on my blank cds

i'm assuming (hoping) that mp3-cd players aren't affected by the levies as they don't have 'embedded memory'..
 

labRat

TRIBE Member
Originally posted by bitchass
cd-r or cd-rw $0.21
AUDIO cd-r or cd-rw $0.77
huh? what's the diff?

and that's bullshit in my opinion. isn't this anti-competitive - by inflating the price of CDRs? well, i guess it won't be long before DVDRs are cheaper than CDs and everyone will make the switch. or to other recordable/archive-type media.

i'm thinkin' removable memory players will be a better way to go - the better not tax compact flash et al any time soon.
 

deep

TRIBE Member
the audio cdr's are just ones that are labelled for specific use in burning audio cd's. normal cdrs are just labelled to be used for data purposes (including burning audio cds). really just a difference in labelling
 

labRat

TRIBE Member
ahh. so they specifically label them Audio Cd-rs for the not-so-technically-inclined? and probably charge double?

gotcha.
 
tribe cannabis goldsmith - gold cannabis accessories

deep

TRIBE Member
exactamundo homeslice

afaik the differences aren't really relevant between the two. it's just a product niche that I think has always kicked back some funds to the recording industry - the distinction in quality between a high quality data cd and an audio cd is insignificant or nonexistent
 

bitchass

TRIBE Member
plus, a lot of those audio cdr decks will only work with a specific, more expensive blank - usually not with regualr 'data' cdr's.
 

RhesusMonkey

TRIBE Member
Originally posted by deep
exactamundo homeslice

afaik the differences aren't really relevant between the two. it's just a product niche that I think has always kicked back some funds to the recording industry - the distinction in quality between a high quality data cd and an audio cd is insignificant or nonexistent
Actually the difference is encoded as a 'type' of CD. Currently (and I stress that) most CD players don't distinguish between an audio CD and a data CD, but there's no reason they couldn't.

And personally I support this flat-tax approach to the utmost. I'm much happier to be doing this than to be doling out cash through iTunes or Napster at a ridiculously inflated price. (umm... hello? 0.99/trk, @ 14 trk/album still is $14 for an album, and you don't have an actual 'thing' when you're done...) This way I can pretend to justify my music-stealing habits. At least the canadian artists get compensated ;)
 

deep

TRIBE Member
You're joking right? In comparison to the inflated pricing of the physical media model the music industry has relied upon since the beginning, digital downloads for a buck is way less inflated...

Under some structures artists also get a bigger chunk of each sale in comparison to before

There's still some bloat in there in terms of what the record companies get out of each sale, but still, it's far more reasonable than what prices people have had to endure
 
tribe cannabis accessories silver grinders

RhesusMonkey

TRIBE Member
Originally posted by deep
You're joking right? In comparison to the inflated pricing of the physical media model the music industry has relied upon since the beginning, digital downloads for a buck is way less inflated...

Under some structures artists also get a bigger chunk of each sale in comparison to before

There's still some bloat in there in terms of what the record companies get out of each sale, but still, it's far more reasonable than what prices people have had to endure
No, not really. How much is a CD in HMV these days? wait, today I bought two, so let's see... $15 for Johnny Cash @ 15 traks, and $25 for Sara McLaughlan @ 14 tracks. that gives us an average of $1.39 per track. Now let's assume that HMV is taking maybe 30% of that (which also pays interac / credit card fees), the label is taking 60% of that, and the artist (well, except for Johnny... rest his soul) is getting maybe 10%. I think I'm being really generous there.

So now to get the same stuff through iTunes costs me (for the Johnny Cash) the same thing, and I end up with a DRM-encoded track that I can copy onto two other machines and still have it play. I can burn it onto a CD, that I now have to buy for an additional $2 or so, if I really want.

But I mean... pretend I oh, have to reformat my harddrive because of some nasty virus I got while browsing porn (the new STI?)... do you think I can get another copy of the stuff I already bought for free? not bloody likely.

And the suggestion that 'some models' give more money to artists is pretty ludicrous... iTunes makes no money for Apple... so now the 30% or so that was going to the distribution channel (minus credit-card fees) is now also going to the labels, and I seriously doubt that the artists see one penny more.

No, rather than undermining the corporate gouging and general ass-reaming that gets done to the consumer via the industry labels, by promoting DRM technology iTunes (and Napster) are in fact supporting them, and ensuring that they will continue to be in the positon for more ass-reaming for the forseeable future.

What would be a worthwhile service would be having an electronic distribution channel that cut out the labels completely. I mean, if the artist could sell their own works, and see maybe 80-90% of the profits versus 5-10%, I'm sure they'd be a lot happier. and maybe we'd get less comercialized pop garbage on the radio. a man can dream after all.
 

deep

TRIBE Member
Originally posted by RhesusMonkey
No, not really. How much is a CD in HMV these days? wait, today I bought two, so let's see... $15 for Johnny Cash @ 15 traks, and $25 for Sara McLaughlan @ 14 tracks. that gives us an average of $1.39 per track. Now let's assume that HMV is taking maybe 30% of that (which also pays interac / credit card fees), the label is taking 60% of that, and the artist (well, except for Johnny... rest his soul) is getting maybe 10%. I think I'm being really generous there.
You're right in that it's generous to think that 10% of each CD sale goes back to the artist. In actuality it's closer to 4%.

Which is why I object to the statement that the prices of services like iTunes is ridiculously overinflated. I'm not sure if you're actually aware of how the costs break down. CD prices are "ridiculously overinflated" given that the majority of the remaining 96% of a sale goes back to the record label (naturally with some being doled out to various intermediaries, etc.). If you want a good article on how fucked up that particular state of affairs is look for Steve Albini's writings on the subject.

But under Apple's iTunes pricing structure, artists get 3-4x more than they do when selling CD's. So from that perspective alone it's more reasonable and equitable an exchange.

There's an article in Business 2.0 on the specific breakdown of the cost if you want hard data instead of guessing at how things are broken down. Basically iTunes gets 40%, the labels from where the work originates from get 30%, 8% for licensing and 10% for intermediaries.

Now 12-16% isn't all that artists deserve, but it's still more than they got before, and is monumental progress when dealing with a dinosaur of an industry like the recording industry. Think about what their perspective was on "digital music" 3-4 years ago and it becomes evident Apple's structure has achieved something quite noteworthy.

If you still contest Apple's pricing structure, consider that when they do promotions, the costs of those promotions (like selling music for less than a dollar) comes out of their share of the sales. I think that's fairly noteworthy when assessing the reasonability of prices set.

I think if you look at the initial marketing results so far you'll see that most people find the $1 per song not only reasonable but by some accounts so accessible it's addictive.

So now to get the same stuff through iTunes costs me (for the Johnny Cash) the same thing, and I end up with a DRM-encoded track that I can copy onto two other machines and still have it play. I can burn it onto a CD, that I now have to buy for an additional $2 or so, if I really want.
Which people are used to doing anyways with music they acquired through P2P networks.

I think you have to look at the business from that perspective - that it's a middle ground between the physical distribution model (CDs) and P2P networks, not an equivalent of each.

If you look at most marketing surveys on the subject, the advent of CD burning has devalued in consumers eyes the point of a premanufactured CD. Sure there are some structural differences i.e. in terms of quality but it's not a service that the industry can really leverage anymore as something consumers "need" as much, now that every computer these days comes with a CD burner.

But I mean... pretend I oh, have to reformat my harddrive because of some nasty virus I got while browsing porn (the new STI?)... do you think I can get another copy of the stuff I already bought for free? not bloody likely.
Think about what you're proposing. Say your CD's melted in a fire or were stolen. Would a retailer pay to replace what you lost just because you paid for it once? No. They didn't engineer the circumstances that produced your loss so it's not their responsibility. Neither did you of course. But really, why would they hand over a product that they could just as easily sell to someone else for the first time?

And what's stopping you from backing up what you bought to CD, in the same way you might burn what you bought to audio CD?

Your concern is nonetheless reasonable, since data loss is a fairly common occurrence. It highlights perhaps one of the oversights iTunes has had - but given the fact that all their transactions are credit card based, it wouldn't be too hard to keep track of what accounts paid for what.


And the suggestion that 'some models' give more money to artists is pretty ludicrous... iTunes makes no money for Apple...
I don't know how you can fairly say this, it pretty much ignores all the financial data that has had other companies salivating since iTunes was introduced.

Look at a graph of Apple's stock price since the April introduction of the store. Or their earnings from the store. Or how they met their operational costs within a few weeks of operation.

Its financial success and significance is undeniable. And it's not going to slow down from here either. If you're interested you might want to look up Forrester Research's market projections on the subject and see what chunk of change they think paid for digital download services will generate by 2007.

If there is one thing that proves the financial viability of paid for digital music services, it's the fact that it made the recording industry do a complete 180 in attitude on it. That's pretty goddamned significant, given that their attitude thus far has been to sue anything internet music related into oblivion. An industry that so far has thrived on taking more than they deserve would not be so easily convinced unless they saw something indeed profitable. We as music listeners know how far up their collective asses they've had their heads but the fact that it's changed their outlook on things is pretty significant.


No, rather than undermining the corporate gouging and general ass-reaming that gets done to the consumer via the industry labels, by promoting DRM technology iTunes (and Napster) are in fact supporting them, and ensuring that they will continue to be in the positon for more ass-reaming for the forseeable future.
That's an interesting perspective, but again I don't think you're taking into account all environmental considerations in implementing something like this. Who owns the music that is most likely to sell today? The record labels. So consequently , yes, it is an unavoidable evil that they have to be dealt with and appeased.

At the same time, what is the alternative? MP3.com went tits up because people are not interested in paying for music from Joe Bedroom DJ. The most sizable market is still for content that originates from the major record labels.

What would be a worthwhile service would be having an electronic distribution channel that cut out the labels completely. I mean, if the artist could sell their own works, and see maybe 80-90% of the profits versus 5-10%, I'm sure they'd be a lot happier. and maybe we'd get less comercialized pop garbage on the radio. a man can dream after all.
:D

Preaching to the choir my friend. Much of the work I've done has actually been on this subject.

In the meantime, you might want to read up on a company called Magnatune.
 
Last edited:

labRat

TRIBE Member
Some comments for RM:

1. Individual tracks are $0.99, entire albumbs are $9.99. Clearly you'd not spend more than $9.99 on any album.

2. CD prices in the states are grossly overinflated - thankfully we don't see that as much here. All new releases are between $14.99 and $18.99 USD, that would translate to $19-24 CDN. Most CDs here cost between $10 and $15.

3. Apple makes very little profit from the music store itself:
"Jobs has one more reason not to be concerned about the competition. "The dirty little secret of all this is there's no way to make money on these stores," he says. For every 99¢ Apple gets from your credit card, 65¢ goes straight to the music label. Another quarter or so gets eaten up by distribution costs. At most, Jobs is left with a dime per track, so even $500 million in annual sales would add up to a paltry $50 million profit. Why even bother? "Because we're selling iPods," Jobs says, grinning." - Time Magazine
They do profit from iPods and increased market awareness of Apple.

What would be a worthwhile service would be having an electronic distribution channel that cut out the labels completely. I mean, if the artist could sell their own works, and see maybe 80-90% of the profits versus 5-10%, I'm sure they'd be a lot happier.
In an ideal world, yes that'd be great. But how do you advertise for a new band that no one has heard of? How do you get people to pay for something they are not aware of? it's be great if anyone who has an idea can just open up shop on the internet and begin selling their wares. Label have their benefits of pushing the crap to the consumers and using their big bellies to push through.

and maybe we'd get less comercialized pop garbage on the radio. a man can dream after all
unfotunately this'll never happen - pop music is, well, popular. nothing can and will stop this 'garbage' from coming out.
 
Top