Canadians [Will] Pay Levy on MP3 Players - Updated

Capt. Canuck writes "According to this Toronto Star story, the Canadian Copyright Board may approve a 20% levy on electronic media tomorrow, including MP3 players and hard drives. With the Canadian Dollar rising and this on the horizon, maybe now is the right time to get that iPod." Update: 12/12 16:33 GMT by M : rcpitt writes "The Canadian Copyright Board has (finally - a year late) issued its ruling on the latest round of blank media levy - the controversial (in the rest of the world as well as Canada) private "tax" on recordable media used to copy music which proceeds go to the music artists in Canada. The ruling by the board and a press release were posted to the Board's web site at 10AM Ottawa (CST) today. The ruling continues the levy amounts from the previous 2 year period (2001-2002) to the end of this period (2003-2004) at the same amounts as previously set but adds new levies on portable (MP3) digital audio recorders of from CDN$2/unit to CDN$25/unit depending on internal storage capacity."

Comments

Abolish copyright--a solution to the insanity.

[Thinkit3]

Clearly this is insane. It's nothing other than welfare for copyright holders. One way to make things more sane is to abolish copyright. Without copyright, nobody would have a legal right to prevent others from copying music, and thus would have no justification for asking for a tariff on equipment for recording music to. But copyright should be abolished mainly because it is unnatural--cheaper recording media would be just a side effect.

Agree on abolishing copyrights and patents? The poster argoff does as well. You are not alone.

Re:Abolish copyright--a solution to the insanity.

[Bi()hazard]

The parent post is so unconventional as to seem irrational at first-but think about what this implies for a minute. Copyright is taken for granted in modern society; everyone assumes information must be restricted to retain value. This is a very recent change. Shakespeare had no copyright, and throughout human history art was produced without the "protection" of copyright.

Now consider the original purpose of copyright. It was not developed to bring profit to those who distrubute conent. The founding fathers, and others around the world who introduced copyright, intended it to be a legal mechanism to shut down people who pass off the work of others as their own for commercial gain. Copyright periods were very short-only a few years-and typical cases involved large operations that mass produced works without permission.

A modern example of true copyright violation can be found in the movie bootleggers of Hong Kong. Take a walk down the street, and you'll see a variety of dirt cheap dvd's with good enough quality that only the most sophisticated consumers can spot the fakes. The pirates reap massive profit and gain control over how the work is presented while the creators are marginalized. This is what copyright was created to stop.

However, corporations bent on extracting maximum profit have perverted copyright into something it was never meant to be. In fact, through the contractual transference of copyright, companies now use copyright laws to screw the original artists! This is why we see non sequitors such as the tax on media: Corporations have no regard for the rights of customers or artists. They will abuse both in the name of profit-that is the purpose they were created for, and they would be deficient if they were not to do so. Lobbying for bad laws is only one mechanism for maximizing profit.

Clearly copyright has lost its original purpose and is now used to restrict the arts rather than encouraging them. Commercial interests, not artistic integrity, drive popular modern artistry. The artists themselves have no power and loathe the corporations that keep them on a leash. Small steps will not fix this. Shortening copyright terms or removing levies will not discourage those who make a living by abusing the system.

To encourage the arts and give artists true freedom we must go back to the models of the past. Artists can make a living through live performance, patronage, and teaching. Corporate middlemen should be removed, and profit should take a back seat to improvement of the human experience. This can only be accomplished by abolishing copyright as we know it.

Of course, you ask, "What will happen to the professional pirates that caused the creation of copyright in the first place? Won't they run rampant after copyright is abolished?" This problem can be solved through existing mechanisms. We already have trademarks. Trademarks are a mechanism for guaranteeing that the stated brand or credits are accurate. We can simply link content to brand. Suppose an aspiring artist writes a song that turns into a hit. The artist names the song, and trademarks that song name in association with the artist's own name. Much like how patent implementations are provided along with statements, the song itself is given as an implementation of the trademark. Now, it is illegal to make use of that specific implementation without naming the original artist as its creator, and it is illegal to use the artist's name and trademark without permission. Professional pirates are outlawed, and bringing a case against them is trivially easy. Artists gain total control of their works, and noone owes anyone anything except the truth.

That's what copyright was meant to be after all-a method of forcing people to tell the truth, and not lie about where content came from. By abolishing copyright and using more limited mechanisms to enforce honesty we can bring back artistic integrity and remove the subversive corporate influence from the humanities.

Re:Abolish copyright--a solution to the insanity.

[incom]

Since copyright is about protecting money, then how about making it only apply to those who are making money off of copyright breach. It's alot more enforceable against only business then it is against all of humanity, and alot more fair as well.

Ex:
1. Joe copy's a song, == legal.
2. Joe copy's a song and sells it, == illegal.
3. J-corp copy's a CD and sells it to distributors, == even more illegal!

This of course applies to song/CD 's that they didn't create. And in my personal(and controversion I guess) opinion, it is up to the content pushers to get us to actually pay for thier stuff, whether through good(bonuses, artwork etc.) or bad(anti-copying technology.) .

RIAA crossed the border

[TheSpoom]

Dammit, RIAA, you can't just change your name and cross the border... can you...?

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.

Hmmm... we should also charge them for the lost business from gaming that they create! Oh, and let's tax them so that the telephone industry gets a cut since so many people are using instant messaging and IRC rather than calling people. Hell, let's just shut them down entirely because they can be a conduit for crime!

Remember, what you choose to spend money on is no longer up to you. :^)

Canadian Dollar

[pollock]

I think you may be confused about the effect of a rising Canadian dollar. If the dollar continues to go up, importing an iPod should get cheaper.

Yes but...

[skajake]

Now that I have to pay this royalty, am i free to duplicate copyrighted material? Or will I now merely be paying twice for something.

So does that make P2P legal in Canada?

[bmorris]

You're already "paying" for the media... Maybe the government should just track what files are being downloaded, and distribute the "media tax" proportionately.

too powerful

[larry bagina]

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.

I don't know anything about Canadian Law, or Canadian internet/music habits, but I'd guess only a minority of users are downloading (copyrighted) music. I think it's absurd the entire industry could be forced to pay a tariff.

It's almost enough to make me glad that in the US, the RIAA has to sue individuals, and haven't (yet) been able to bill ISPs directly.

CD-Rs more expensive too?

[Anonymous Coward]

$.49 tarrif per cd? That's nearly 100% of the actual market value! Music doesn't even make up a significant percentage of my use of CD-R media, I'd be pissed if the US imposed such a large tax on it.

My laptop uses the same HD type found in small mp3 players, would it fall under the tax?

So, I assume all this money will be going directly to the artists, who have been so badly hurt by the mp3 downloading craze? Yeah... right.

How to destroy an industry..101

[nurb432]

Even hard drives? Sheesh... At this rate they will tax the computer industry into oblivion..

MP3 player levy loophole

[russotto]

If this is the same levy as before, it only applies to _blank_ media. That is, media without any sounds on it. So the iPod in Canada could just come with a copy of "Steve Jobs Sings" prerecorded, and no levy.

Re:Enough is enough with these thugs in Canada

[fishbowl]

As a musician and songwriter, I see this sort of thing as a barrier to entry, not a benefit.

If the cost of recording media goes up, it makes it more expensive to record, and makes it much more costly to distribute one's music for free. If it costs me $4 to make a demo to give away, then it's costing almost as much to make music to give away for free, as it would cost to buy some music produced by a corporation!

This isn't about piracy, it's about controlling whose art gets distributed. Stalin had different methods, but it's the same goal.

The levy (probably) legalizes the copying of music

[chathamhouse]

The interesting thing about these levies is that the money spent by the consumer doesn't necessarily vanish into thin air.

While this has yet to be tested in courts, what consumers get in exchange for the levy is permission to make copies of music for personal purposes. In other words, it legalises the _download_ of MP3s for which you don't own the cd or other media. This is, after all, what the levy is compensating artists for.

However, it does not legalize the _distribution_ of copyrighted works. Hence you're in the clear if you only download, but not make anything available from P2P networks. An interesting compromise.

Canada has not yet signed the WIPO treaties which would be breached by the compromise reached by the copyright board. Naturally, copyright holders argue that this is a mis-interpretation of the law, and that we should be both paying the levy AND barred from copying for personal purposes.

Compare the Canadian Copyright Act to the Australian Copyright Act, and you find that the consumer comes out far ahead in the Great White (as in snow, not culture) North. In Australia, making a backup copy of music that you've purchased is a technical (but again untested) breach of the Copyright Act.

In the end, I'll take a $25-$200 once-off levy over not having permission to copy CD's that I've purchased, or being subjected to the DMCA, or being subjected to the WIPO treaties any day. As an added bonus, artists who have limited distribution of their works (i.e. the Little Guys) see some of this cash. This helps the economy a lot more than slowing down the sales of portable music devices.

Shakespeare vs Brian Herbert

[sbszine]

As someone pointed out the other day, there was plenty of quality art available before copyright. Shakespeare and Mozart were happy to create art without it, and (AFIAK) made money from performance and patronage.

A middle ground would definitely be a good idea, though. I would be happy if copyright was limited to the lifetime of the artist, and/or non-transferable. An artist gets paid for their creations for their whole lifetime, but Brian Herbert and Disney have to come up with something original if they want to pass themselves off as artists.

What about porn?

[ad0gg]

Seriously, what about the porn industry. Kazaa, usenet, gnutellla etc all have pirated porn. Yet they seem to stay in business even without levies.

Fund my unemployment, then?

[Platinum Dragon]

This will probably cause many small and struggling computer stores to close. The one I work at barely survived Toronto's Summer of SARS, and sales are finally starting to recover. People from outside the province get enough sticker shock when Ontario's 8% tax and the federal 7% tax are stacked on top of the posted price. If an extra 20% gets tacked on storage media, that's a 35% tax, little of which will end up going to the struggling artist, most of which will go to Bryan Fucking Adams and Celine Fucking Dion if most of it doesn't disappear into copyright board and record industry bureaucracy. When a customer mentioned this to me today, I thought he was joking. This is going to help no one, and will likely hurt many, many people who would otherwise be purchasing music and movies. Fewer people will buy storage media, which means less money will be available for businesses to pay rent and employees, which means fewer people using their wages to buy entertainment--if they end up receiving a wage at all. Basic capitalist economics--even a tree-hugging commie like me understands this cause and effect, and it's not as if that 20% will go to serve any common good in the end.

Maybe the copyright board can donate some of that 20% to Employment Insurance, because I can forsee more than a few computer retail jockeys looking for new places of employment. Want to guess how many CDs and DVDs I'll be able to purchase on the dole while I hunt for work in a place that won't get screwed over with massive tax increases that will likely not reach the artists that really need the cash yesterday? Want to guess how many hard drives and burners people, including prospective artists, will purchase? Want to guess how many demo and promo CDs Joe the Band will be able to pump out for distribution now? And when CD sales continue to fall as the homogenization of pop music continues, guess what the industry will come crying for again. I don't intend retail to be a career, but it pays the rent until I can move on to something better. I can already see how this action will harm me and the people I work with.

Thanks for nothing.

They just don't get it

[Nonillion]

The CPCC,RIAA and MPAA just don't get it. Punshing law abiding citizens with your "pirating tax" will never work. Hard working people like me are fucking fed up with your "bought lock stock and barrel" tarrifs and taxes. This is just one of the reasons I haven't bought any of your over priced music CDs in years. Just because I buy hard drives, CDRs and video tapes does NOT give you the right to charge ANY sur taxes because the media "could be used to pirate music". Why don't you start charging taxes on hubs, switches, routers and sound cards.

Better start buying old computer hardware people, before the CPCC,RIAA and MPAA force the hardware manufactures into putting "approved" DRM controls in the hardware.

Sorry for the ranting, but this shit just gets under my skin...

Collected Money Going To American Artists?

[BigBlockMopar]

Over here in Mexico there's a tax on CD's that goes to Music distributors to compensate for CD piracy.

Yeah, it's the same in Canada.

But the funny thing is that we're being forced to pay for piracy of music that no intelligent human being would tolerate in an elevator, let alone pay for.

The tax levied on Canadians goes exclusively to Canadian artists to pay for all the copies of Tragically Hip's Bobcaygeon and Rita McNeil's Now The Bells Ring allegedly floating around on Kazaa Lite.

Of course, that's bullshit; Canadians with MP3 collections have stashes of the stuff that gets little airplay here because of the 40% Canadian Content laws. And those Canadian artists who have actual talent have generally fled to greener pastures south of the border... think of Rush, Celine Dion, Barenaked Ladies.

If they really wanted to help out those being hurt by people with large MP3 collections, send the money south of the border! (But, of course, that will never happen. Some Liberal-appointed 85-year-old Supreme Court justice *knows* that good Canadian kids are only listening to all that top-flight good Canadian music that has to be forced onto listeners with Canadian Content laws!)

If it's anything like that in Mexico, you must be as frustrated as I am. I'm paying a tax - for music that I couldn't be paid to listen to - to burn Knoppix demo CDs for friends.

I'm *so* proud of the protectionist pandering-to-special-interest-groups stupidity of my country.

Re:Collected Money Going To American Artists?

[FreezerJam]

IIRC, the RIAA (or some roughly equivalent U.S. organization) did approach the Canadian collective that collects the levies, and asked for a share. The whole thing broke down because the American side wasn't doing a roughly equivalent collection that Canadian artists could share in.

Re:Collected Money Going To American Artists?

[BigBlockMopar]

FUCK YOU! The Tragically Hip are a great band. And Canadian music is better than American music. Just have a listen to latest Matthew Good CD, it is much better than anything on your top 40 list.

*MY* Top-40 list? Well, for one thing, I am Canadian. And *my* Top-40 list is reads along the lines of Jimi Hendrix, Led Zeppelin, CCR, Dire Straits, ZZ Top, etc. You might or might not get the picture by now.

To illustrate the folly of your argument that Canadian music is great, I submit to you the very thing you're arguing as proof of the abomination of radio stations "forcing" American music on us:

The reason for content laws is because American music music (Which is complete SHIT) is forced down on us. Even With these laws, the radio stations manage to force the American popculture down on us. This is an abomination. The real artist get little attention will while your fucking britteny beers is played over and over again. If anything, we should ban American music.

All righty, then.

Fact 1: Radio stations make money by selling advertising time.

Fact 2: Advertisers pay more money to run their ads when more people listen to a given radio station.

Fact 3: Increasing a radio station's listenership increases their profits.

Fact 4: To increase the listenership, the radio station has to play what people want to hear.

Summary of Facts 1-4: The radio station will make more money if it plays what people want to hear.

Therefore, if Canadian music is so great, listeners would want to hear it, and radio stations would play it on their own. No Canadian content laws would be required.

The fact that most radio stations play *exactly* their Canadian content requirements, many of them filling their 40% requirement during non-peak hours and playing their good stuff at drivetime (peak hours), should serve to illustrate the fact that Canadians don't especially care for Canadian music.

The one notable exception to this - the one national broadcaster who actually exceeds (massively or otherwise) the Canadian content requirements is the CBC. Nicknamed "The Corpse" in the broadcasting business, their ratings are tiny and their demographics are primarily shut-ins, 74-year-old women who would change the station but lost the owner's manual for the new-fangled radio they bought in the 1970s, and the 0.5% of 1% who actually think that Jean Poutine had been doing a good job as Prime Minister.

The fact that the average American can't appreciate music that is a little bit more sophisticated is another matter.

A recent Arbitron (radio station ratings) study in Toronto showed something very interesting.

First, prime time in radio is drive time. Morning and evening commutes. People listen to the radio in their cars.

Second, superheterodyne radio receivers (which is just about every radio receiver made since the 1930s) leaks an RF signal mathematically related to the station to which the radio is tuned.

Radio station ratings services like Arbitron use the above facts to calculate drivetime ratings for a given radio station very easily. Point some special equipment at a freeway, count the number of car radios leaking a local oscillator signal which would indicate the radio is tuned to that station, and compare that to the total number of cars going by tuned to other stations.

Arbitron found that, on one day in Toronto, close to 50% of radios were tuned to Buffalo NY radio stations. Granted, of course, Arbitron studies presuppose that your station's listeners will be employed (which is good, because you don't care to try to advertise to people who have no money) and who drive (again, good, because few reasonable people will take the bus to work if they don't have to).

Apparently, even in Canada's biggest market, Canadians aren't any more sophisticated than Americans.

Re:Collected Money Going To American Artists?

[BdosError]

Apparently, even in Canada's biggest market, Canadians aren't any more sophisticated than Americans.

I disagree with that interpretation of those facts. Toronto is notorious for wanting to be an American city, coveting American things. They want to be Big Time(tm), and they see that as being American. It's not sophistication, it's "wannabe".

For example, a number of years back, the local CFL franchise Toronto Argonauts were having a great season, averaging 39 points a game! On offense, not total game score! Come September, the run to the playoffs is on, and they draw something like 20000 fans to a game, maybe less, I don't recall. That same weekend, an NFL pre-season exhibition game also in Toronto drew 55000 people! Buloads of Torontonians regular travel down to Buffalo Bills games.

Toronto doesn't dislike Canadian music on it's merits, only because it's not American.

Of course, that's just my opinion, I could be wrong.

CBC Newsworld Discussion

[fatwreckfan]

I was severely pissed last week when CBC Newsworld had a so-called "discussion" regarding music downloading and its effect on the recording industry. Their only guest was a copyright lawyer who (surprise, surprise) didn't mention the levy on blank recordable media collected in Canada, which goes as a free handout to the recording industry. What other industry get's to collect free money from the government on the chance that someone somewhere might do something illegal?? As if this isn't disgusting enough, the recording industry is pushing for a levy on internet access, which will again be given to the poor music industry. I can't believe they have the balls to demand that every internet user pay even if they have never downloaded a single illegal song.

I tried in vain to call in since the issue of the blank media levy was not addressed, and I hate the idea that uneducated people out there were watching that and possibly becoming sympathetic to the music industry.

Re:Buy an iPod in the states - import duties?

[The Vulture]

That Canadian is supposed to declare that they purchased it in the United States when they re-enter Canada via Customs, and pay import duties on it, like a good little Canuckian. :)

However, many people don't, especially if it's an item (like an iPod) that they could easily say that they owned it before hand. Especially at busy ports of entry, Customs officials (at least a couple of years ago anyway) are general hesitant to stop the flow of traffic (whether it be cars or people at airports) unless they figure something major is going on (or see something so glaringly obvious that they can't ignore it).

If you move into Canada, and have acquired posessions abroad, they will also charge you duty on them as well. I recall that the company I was working for at the time, in California, was considering relocating the QA team (which was almost exclusively Canadians) back to Canada, and rent office space there. In order to get our test lab equipment into the country though, we were looking at paying somewhere around $100,000 to get it through Customs.

I deal with this stuff every Christmas when I go back to Canada to see my family. The bitch of it is that I'm treated better by Canadian customs than U.S. Customs (probably because I'm Canadian and have a Canadian passport).

-- Joe

Re:Who needs an incentive to create work?

[Obasan]

As someone who writes quite a bit (though doesn't really make money for it) I can say I would be pretty pissed it if was perfectly legal and "OK" for anyone to take my work, stick their name on it, delete my credits, and publish it themselves.

I imagine anyone who does much creative work (writing, coding, composing, whatever) feels the same way, even if they choose to share it for free, they expect to be able to get credit for the work they have done. Taking this away WOULD drastically undermine people's incentive to share creative works with their community.

Side effects for sure

[Mistlefoot]

The worst side effect of this is the punishment of the not guilty.

I backup stuff regularly to cd's. I've NEVER burned a music cd.

I also have a handy little 128mb key drive. Wonderfully handy for transferring stuff I'm working on.

I could very well have a 40GB iPod and use it to hold music I own - why carry all those cd's when I can pop'em on my iPod, or use to start story all the music I CAN NOW LEGALLY buy online.

So add a huge tax to that and how do I feel?

Do my morals change? Do I all of a sudden feel that since I am paying for music via this tax that I had may as well benefit from this? Or do I happily understand that because someone else doesn't something "they" don't like that I should pay more?

Re:Side effects for sure

[Frymaster]

The worst side effect of this is the punishment of the not guilty.

it's like putting a tax on balaclavas and giving the tax money to banks that had been robbed. i agree. however, there are other bad things about this. consider:

• who gets this money? the blank cd levy is distributed via socan, the same people who cut songwriters cheques for airplay. all fine except that only canadian artists can be registered with socan - and, uh, "copyright theft knows no nation". you get the picture. of course i'm not opposed to canadian musicians getting a bit of cash, but this is a harsh mechanism.
• the chances of the levy actually being collected effectively are slim. maybe this is a good thing, but it leads to beurocratic fat. with the cd levy, if a retail outlet demonstrates that they sell cd's for "data only" purposes they are exempt from the levy. essentially, if they're a computer shop, they don't have to pay - this is why there are still supercheap cd's available in canada.
• is this whole thing contrary to the wto anyway? i know that "cultural" subsidies are exempt from most trade agreements (notably in the ftaa so that the crtc can keep on setting cancon quotas), but this is getting into a grey area when things like hard drives wind up on the list. i mean, will sheila copps (or whoever the hell the minister of culture is these days) decide to put a levy on bandwidth next?

as a side note - and this is important for all you canucks out there - the blank cd levy means that canadians can legally copy sound recordings for personal use. the details are here. please go easy on my server.

Some details....

[max99ted]

... from the CCPC (read: RIAA) regarding disbursement of this stinky tax.

http://cpcc.ca/english/infoCopyHolders.htm

The Copyright Board designates the proportion of total royalties that forms the basis of CPCC's distribution amongst each of the three eligible groups: songwriters and music publishers, recording artists, and record companies. These proportions are recorded in the private copying tariffs. It is then CPCC's job to allocate and pay the royalties to individual copyright holders. CPCC and its constituent member collectives have developed a distribution process that is enabling royalties to be distributed fairly amongst tens of thousands of copyright holders.

Since no inventory of privately copied tracks exists, distribution is based on representative samples of radio airplay and album sales, which are given equal weight in the distribution. Together they provide a proxy for determining the titles that Canadians typically copy for private use. Internet usage is not referenced in the distribution as no adequate documentation of this activity currently exists. Samples are regularly used by copyright collectives because the cost of capturing and analyzing all available information would be excessive.

Recognizing the relatively modest level of collections for 2000, CPCC opted to pay out royalties for 2000 and 2001 in a single, combined distribution.

While songwriters and music publishers are eligible regardless of nationality, only Canadian recording artists and record companies may receive payments under current law. In accordance with the Copyright Board's decisions, royalties collected for 2001 and 2002 are allocated as follows:

66 % to eligible authors and publishers
18.9% to eligible performers
15.1% to eligible record companies.

The allocation for 2000 is:
75% to eligible authors and publishers
13.7% to eligible performers
11.3% to eligible record companies.