Friday, April 25, 2008

Music Tax for Internet Users?

Reihan Salam has a very interesting article over on Slate about a recent Big Music plan advanced by Warner Music Group to staunch the blood from their disastrous anti-Internet policies. The idea is to charge your ISP $5 a month for every user(a cost they would pass on to you, natürlich), that would then allow you to download any music you want DRM free. Not such a bad deal, really. However, as Salam notes, not everybody is a fan:
Michael Arrington of TechCrunch has condemned this idea as a "music tax" and "the music industry's extortion scheme." Though the proposal is not technically a tax—rather, it's a call for "voluntary blanket licensing agreements"—it will certainly feel like one. And instead of paying for roads, schools, and bombs, you would be helping to keep record executives in cigars and the finest silks. As Arrington argues, there is good reason to believe that this huge pot of money will turn the music industry into a lazy near-monopoly that lives off of fat royalty checks. Once the majors get this guaranteed revenue stream, won't they just spend all their time scheming to increase the fee from $5 per customer per month to $7.50? There's also the small matter that not all Internet users listen to or download popular music. If this plan somehow goes through, millions of moms and dads who pay for Net access so junior can browse Britannica Online will find that they are subsidizing the hedonistic lifestyles of America's most-tattooed singing sensations.

Hmmm... when you put it that way, I'm not sure I like the idea of subsidizing Industry Fat Cats. An automatic $5 a month from everybody using the internet amounts to HUGE welfare for an incredibly broken system... despite the fact that I don't steal music(since college anyway) and have really come to hate the inconvenience of DRM-ed music, I can't see getting behind this proposal... especially since it doesn't seem to mention doing anything different for the artists.

What other options are there Mr. Salam?
Apple reportedly wants to pay the majors $20 per iPod or iPhone to access all the songs in their catalogs. The majors want Apple to cough up closer to $80. In practice, this all-you-can-eat plan could mean a few different things. By paying an extra, say, $100 when you buy an iPod, you could have access to everything sold on iTunes. (Or, perhaps iPhone users could pay a subscription fee for the same deal.) While the details are still hazy, the upshot is that owning an Apple product would become even more appealing. The nice thing about this deal for the majors is that the labels earn less than $20 per iPod in download sales now, so anything above that would be gravy. The not-so-nice thing is that it would further entrench iTunes as a musical monolith. Are the major labels sure they want to become Steve Jobs' lackeys? Right now, iTunes controls more than one-fifth of all music sales in the United States. If Jobs gets his way on all-you-can-eat, that share will grow and grow until the labels will never be able to say no to him again. Cue maniacal cackling!

Effectively put the entire Music Industry under the control of Apple? I know Anna is probably a fan... but NO THANKS!

Got anything else?
Instead of a fake music tax, the best solution might be—sorry, libertarians—for the government to step in with a real music tax. In the book Promises To Keep: Technology, Law, and the Future of Entertainment, Harvard Law School professor William Fisher devised an ingenious reward system that levels the playing field for artists. At first glance, it looks a lot like the music biz extortion scheme. The feds would levy a small tax on all broadband subscribers. Musicians, signed and unsigned, would register their creations with the U.S. Copyright Office, who would then set up a massive Nielsen-style sample of music listeners to track the popularity of different songs. The more your song is played, the more you get paid. The revenue from the tax would be parceled out to the copyright holders.

This is, by far, the most fair proposal I've heard of to move the music industry into the 21st century... but it's very equity is what makes me think that it will never ever ever happen. I'm having trouble seeing how cutting Steve Jobs and Big Music out of the revenue stream is going to be politically viable. I guess places like Warner Music Group own the copyrights for their catalogs, so they would still be getting paid... but you have to wonder how much incentive there would be for a new artist to sign over their copyrights to one of these major labels(which I'm sure is part of Reihan's plan), so it's difficult to see why the labels would support it. I certainly like the idea of this plan, but I'm not sure it's a very realistic one.

Hopefully I'm wrong.

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