Canada's labels slam proposed digital 'tax'

Source

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TORONTO (Billboard) - A revolutionary plan that would effectively legitimize file-sharing here has been slammed as "a pipe dream" by Canadian labels.

The Songwriters Assn. of Canada proposes to allow domestic consumers access to all recorded music available online in return for adding a $5 Canadian ($4.96) monthly fee to every wireless and Internet account in the country.

The SAC claims that the proposal, which has been presented to labels' bodies the Canadian Record Industry Assn. (CRIA) and Canadian Independent Record Production Assn. as well as publishers' groups, would raise approximately $1 billion Canadian ($993 million) annually. Although the SAC does not detail how revenue would be collected and distributed, it says it would go to artists, labels and publishers.

The idea doesn't strike a chord with everyone. The SAC proposal "would signal the death of paid music services in Canada," said Alistair Mitchell, CEO of Canadian music service Puretracks. "It would be saying we're just giving up on developing new models. The concept is so flawed, I don't know where to start."

"This proposal is incredibly well thought out and well constructed," acting SAC president Eddie Schwartz said. Producer/songwriter Schwartz, whose songs have been performed by Joe Cocker, Pat Benatar and Donna Summer, says the scheme would "allow people to gain access to the entire repertoire of Western music" for only $60 Canadian per year.

That, he added, "amounts to $0.16 ($0.159) per day. (Which) seems like a pretty good deal." Schwartz said it's unlikely that users with both a wireless phone and an Internet account would have to pay twice for access.

MANY HURDLES TO CLEAR

The Canadian Wireless Telecommunications Assn. estimates that Canada had 18.5 million wireless phone users and 7 million residential Internet users at the end of 2006. In 2006, according to the International Federation of the Phonographic Industry, the trade value of recorded music fell 9.1 percent to $598.7 million Canadian ($529.8 million); CDs accounted for 85 percent of that total.

CRIA president Graham Henderson said he has discussed the plan with Schwartz, but his organization is reluctant to become involved. "We don't want to pursue what amounts to a pipe dream that is presented as a quick fix," he said. "We'll lose focus on the real issues that will help us resolve the industry's problems."

Schwartz said he has received positive feedback from consumer groups. But he noted that the plan would require clearance from the Copyright Board of Canada, and the SAC has not yet taken the concept to the regulatory body.

The SAC also has yet to present its proposal to Canadian Internet service providers, although some are dismissive of the plan.

"It appears (the SAC) would ask wireless carriers and ISPs to collect this surcharge on their behalf," said a spokesman for Bell Canada, one of the country's largest telecommunications companies and the majority owner of Puretracks. "(That) would not go over well with our client base, especially with the large number already signed up for our (legal) mobile and online music services."

The Supreme Court of Canada ruled in 2004 that ISPs are not responsible for the actions of clients using their Internet services. One senior source at a Canadian ISP said, "ISPs are not required to -- nor would they -- police this kind of usage. Nor would they charge, collect and remit what is in essence a tax."

However, the proposal has received support from the Canadian Music Creators Coalition, a group of 187 acts, including the Barenaked Ladies and Avril Lavigne.

Artist Andrew Cash described the SAC suggestion in a statement on behalf of the CMCC as "the first progressive proposal we've seen in Canada to address file-sharing."

Reuters/Billboard

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LOL !!

if Avril and 186 others artists agreed it most me good !! lol

I look at it this way. There are so many things wrong with this proposal, I can't list them all. The bottom line is that you are forcing people to pay for something that many don't use.

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Posted by Rush

I look at it this way. There are so many things wrong with this proposal, I can't list them all. The bottom line is that you are forcing people to pay for something that many don't use.

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Exactly they should make it an option, with a 1 IP restriction.

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Posted by Rush

I look at it this way. There are so many things wrong with this proposal, I can't list them all. The bottom line is that you are forcing people to pay for something that many don't use.

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Can you name one person who never downloaded music off the internet.
I think that it's a valid proposition, music distribution need to setup a new distribution process. I don't want to buy full album and l don't to have to store a cd too...

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Posted by Evilwig

Can you name one person who never downloaded music off the internet.
I think that it's a valid proposition, music distribution need to setup a new distribution process. I don't want to buy full album and l don't to have to store a cd too...

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I'm too cheap to download music... but I thought if you purchased from iTunes you only had to pay for one song at a time. Could be wrong though.

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Posted by TNunley

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Posted by Evilwig

Can you name one person who never downloaded music off the internet.
I think that it's a valid proposition, music distribution need to setup a new distribution process. I don't want to buy full album and l don't to have to store a cd too...

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I'm too cheap to download music... but I thought if you purchased from iTunes you only had to pay for one song at a time. Could be wrong though.

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You can buy one song at the time from iTunes. The problem with that is: Insurance company consider mp3 as data and won't protect them as they will protect a physical cd. Well, in canada at least...

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Posted by TNunley

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Posted by Evilwig

Can you name one person who never downloaded music off the internet.
I think that it's a valid proposition, music distribution need to setup a new distribution process. I don't want to buy full album and l don't to have to store a cd too...

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I'm too cheap to download music... but I thought if you purchased from iTunes you only had to pay for one song at a time. Could be wrong though.

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I use iTunes a lot but I've only downloaded music once from them. While they do offer individual downloads you can also download complete albums all at once, usually they'll give you a discount or bonus material if you do. As far as charging you goes, they only do charges every 48 hours or after you reach $20 spending increments, that's so a billion charges don't appear on your card. Amazon also does the same, yesterday I downloaded an album I woudl've imported from Japan and got it for $8.44, had I bought the physical CD it would've cost me about $27.

As for the original topic, I think $5 is a reasonable price considering I know there are some services that charge you a flat fee per month for unlimited downloads, usually $5-10 or more here in the USA.

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Posted by Evilwig

Can you name one person who never downloaded music off the internet.
I think that it's a valid proposition, music distribution need to setup a new distribution process. I don't want to buy full album and l don't to have to store a cd too...

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Probably not. However, I went for years without downloading music off the net. After Napster went South I didn't download any thing.

That being said, here are some of the problems with the proposition (some mentioned in the article)

1) ISPs might take a hit because they will be charging at least 10% more a month for all of their customers. Do they dexerve to lose business because the music industry is? I don't think so. Another issue is bandwidth. I see a huge increase in bandwidth (for spite maybe) if this went into effect. Again, I don't think the ISPs should have to deal with that.

The situation would be different if Rogers was losing money in cable because people are downloading TV programs, and the off loaded the loss to their cable internet subscribers.

2) I think fewer people download ("illegal") music than you realize. Most of the people I talk to use the current Itunes (like) companies to buy their music online. That being said, a lot of people will be paying for other people's actions.

3) IMO, downloading music off the net is still a grey region issue regarding legalities. I think the only thing that makes it truely illegal is if you and the person that bought the CD listen to the CD/song simultaneously. This gets more likely when people distribute music openly on the net, but sharing music with a few friends (where one person has bought the music) is not a big deal. That being said, this is almost like Canadapost raising their shipping charges because friends are mailing CDs to each other to lend out music.

4) ISPs will have to act as the middle man and they shouldn't. They are not the music police or even related to the music industry.

5) This only puts a few bucks back into the pockets of the music industry and it will only encourage online sharing. That seems kind of counter productive to their (so called) goal of curbing or eliminating music piracy. However, a cynical look at is that they are acheiving their goal of putting more money in their pockets, which is what they really care about.


The bottom line IMO, is that it's the music industries responsibility to take care of this. They need to be one step ahead of everyone else. I thought things like Itunes was a step in the right direction, but they need to keep going. Personally I think they should eliminate CD sales altogether and stick to digital media and vinyl (for DJ mixing).

As for insurance -

Insurance companies need to keep up with the times too and start insuring digital data where there is credible evidence that it was paid for. This should not be difficult to provide by the companies that sell you the music. They need records for tax purposes too, so they information is there.