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Why a Music Tax Is a Bad Idea
An anonymous reader writes with a followup to the story posted last week about Warner Music's plan for a music tax for universities. "There's been some debate about this plan and Techdirt has a detailed explanation of why a music tax is a bad idea, noting that it effectively rewards those who failed in the marketplace, punishes those who innovated and sets up a huge, inefficient and unnecessary bureaucracy. Meanwhile, plenty of musicians who are experimenting with new business models are finding that they can make more money and appeal to more fans. So, why stymie that process with a new bureaucracy that simply funds the big record labels?"
So, why stymie that process with a new bureaucracy that simply funds the big record labels?
...
Profit???
At the very least campaign contributions?
Let's tax birds singing too.
So, why stymie that process with a new bureaucracy that simply funds the big record labels?
I think you've answered your own question. Warner Music isn't proposing this for your benefit.
It's not a "Music Tax", it's a "Record Company Bailout"
It taxes (more like fines) those who did nothing wrong.
You answered your own question:
"a new bureaucracy that simply funds the big record"
If you were a big record company that is the greatest solution ever. They have to do nothing and roll in the cash at the government and end users expense. Straight to step 4) profit.
Why our governments are even considering it is a question we should ask every law maker out there.
Why the nation of the Boston Tea Party is even considering it? Is an even greater question.
Why would any self respecting university volunteer itself for this?
I know my alma mater would never put up with this and I suspect most other universities have the same sense of dignity. This plan cannot possibly succeed.
The music tax will be based on how much music is currently being shared online. Do you expect the amount to stay static, after it's legalized?
Of course not. All of a sudden, how to download music will be on the news. People will make lots of money helping the technology-illiterate use file sharing. Everyone will file share music, because they're being taxed for it anyway. Music file sharing will go through the roof, and profits will drop lower than they knew was possible. That's when the tax will start going up.
Second Issue. All you file sharers out there: how often do you download a whole discography, when you only really want 5 songs tops? Exactly. That whole discography is going to count towards that artist's share of the tax. People do a lot of things out of laziness when it's free.
Third issue. Do you think it will stop at a music tax? Next the MPAA will be clamoring for a movie tax, and there'll be moves for a different fee for everything in existence: a video game tax, a tv show tax, a pornography tax, a sewing kit tax, etc. Once you open that box, it's not going to close again.
I read in "The Economist" a while back, that the "Art of Taxing," is like plucking a live goose for feathers.
You want to get the maximum amount of feathers, with the minimum amount of fuss.
So, try to sneak in a small tax, that nobody notices, or can do anything about. Or pick on a small minority, and whack them with a big tax.
Here we have Warner asking for a small "taste" from everybody.
I prefer to "eat alone."
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
After they get the music tax, you know they're going to go after a movie tax, a tv series tax, a game tax and an ebook tax.
None of them can see the clouds; The polished wings don't care.
preachingtotheconverted
--- Duey Finster http://www.dueyfinster.com
Warner is proceeding under the assumption that if they apply their big guns to this, they will get it pushed through. Especially for those colleges that would rather roll over and pass the bill to the students than fight for their rights. If I were a big music exec, I'd be doing the same thing. It's free money, even if only a handful of schools agree.
What burns me about it is that it's obviously a money grab, and it's so blatantly immoral it kills me that it's reached this level of attention. First off, why Warner? Why do they get the money? Second off, I'm a musician on the side, and I put out albums on a regular basis which make money here on a local level. If my band's album is downloaded on a college campus, is some of that tax going to go to me, if I have no affiliation with Warner? NO! So not only are they getting money for music that may or may not even be downloaded, they're getting money for content that isn't even theirs to profit on.
It's my opinion that the music industry has an standing policy of "do everything you think you can get away with", which, when combined with the more venerated "better to ask for forgiveness than permission" puts them in the frame of mind to do this. And if they get away with it, even a little bit, they're making money. For those lamenting that these guys are clinging to a dying business model, wake up and look around. This is the new business model! Use your clout and presence to try and get as much free money as you can, while doing damage control on the other side to stem any repercussions from less than moral practices. If you had millions of dollars to throw into a system like this to "prime the pump" so to speak, and you valued a quick buck over scruples, why the hell wouldn't you try to pull something like this? /soapbox
Raging in an online forum won't do anything for the world around you. To see change, you must take action.
so $50 /m for all the movies and games that you want? Does that void laws about taking cams to the movies I payed the forced tax so how can I fined for braking the law? OR going to a bast buy taking a game and just paying $5 $10 for cost of game media and seeking it out of the store? I not shoplifting I just paying $5 $10 to have the game now and not have to download 4GB or more of the game for free under the tax.
So, why stymie that process with a new bureaucracy that simply funds the big record labels?
Because the record labels donate more money to policy makers than you do.
I personally think it's an awesome idea. Let me tell you why.
A few years ago I wrote a great book. It would have sold a billion copies, but alas, no one else thought it was worth reading. If we can set a precedent with this music business, then we can do the same for books. As an author and a published (because I self-published 20 volumes) I should be entitled to a cut of the proceeds when we start taxing universities for students that copy ebooks. It's the logical next step.
I'm also an amazing artist, the Michael Phelps of the art world. Alas, no one has bought my work "Ruled 8x11 Sheet of Paper" and instead, millions of so-called printers are infringing my copyrights.
SO yeah, this is a good idea.
The music industry is failing in the current setup, and everyone and their grandmother seems to know it, and most people are willing to DL something to avoid the costs.
There is also the whole "how much does the artist get anyway?"
The internet brings up so much that wasn't around with books- (which was probably the original model music industry was based on) and it seems the question of libraries, fair use, and copyright definitions have been trampled on in so many ways.
Artists are disgruntled with contracts, people are disgruntled with costs, and the business is disgruntled with selling losses.
But, there is no reason for a lax to be leved based on a unpredicted media distrubution system. Buisnesses need to adapt, learn and create to survive. And, instead of learning how to deal with what listeners want today: signle songs, low cost, instant availability... they've attacked their consumer base, and are forcing them to pay.
All in all, there is no reason to support this industry. It needs to be revamped into a new successful business model, that takes into account its listening base, and doesn't disrespect, sue and tax them when they are not paying attention.
Normally I'm not a fan of rap, but I came across a guy by the name of Immortal Technique a few weeks ago that impressed me quite a bit. Not only are his lyrics actually about important things rather than bling, hos and poppin caps, but he seems to get the new way music distribution works.
He's been on an independent label since 2000 (he's co-owner of it now I think) and in that time he's sold maybe 300,000 units total. Is that a lot compared to artists on major labels? No, but he makes $7 per CD sold and lots more money doing live shows. He said in an interview that he was offered $150,000 to make an album for a major label and he turned them down.
He's not making nearly as much money as Jay Z or some other big name rapper, but he has full control over his production and full control over his music, something he says is more important than money. I'll leave you with a piece from an interview:
Lots of people, not just the record labels, told me that this wasn't going to be lucrative or that no one was going to care, but I was fortunate enough to believe in myself and say, listen, I'm going to do whatever I want, with or without the express permission of other people. There's no gatekeeper for me. I don't need somebody to co-sign me to put me on.
Anyone who has supported me has never been because I twisted their arm, it's been out of the goodness of their own heart because they felt the truth in the music. So I think in terms of marketing myself, I don't need to create a rap persona, or a different personality in order to sell records. For me, it's just as simple as getting the word out and getting the music to people. The music sells itself, and the message sells itself.
...
I definitely would like people to purchase The 3rd World in stores and purchase it online, but I think it was more of a way for me to express my frustration with the music industry. I can't believe they have the audacity to call anybody else a thief. As much money as they steal from artists, as much as they don't have a health care program for any of their artists, and I look at stuff like that and I'm disgusted. They go to these conferences and tell kids, "How can you steal a record?" I'm like really?
Full interview
Murphey's fighting Occam, and we're in the stands.
The Boston Tea Party happened because the government lowered taxes, so that the smugglers could make less money. They were protesting against cheap legal tea, not against taxes on tea. Seems like the record company proposal is totally in the spirit of the Boston Tea Party.
Squirrel!
So the music industry is trying to sell a blanket license, so that it can monetize its assets without suing customers. Isn't this a step in the right direction? Calling it a tax instead of a blanket license is just inflammatory, IMHO. Some of these companies were built in good faith, relying on property rights as they currently exist, they paid money to own licenses which gave them the right to make profits. That doesn't guarantee profits, of course, but if they paid someone to 'own' the music, what's ethically wrong with pursuing those profits?
Don't get me wrong, I disagree with many of the fundamental ideas on which the industry relies. I think it's bad business to sue their customers, but the original mistake that they made was failing to keep up. They've invested so much in their current business infrastructure that they can't bear to part with the concept of owning songs in the traditional way.
No, they were protesting against a tea monopoly run by the East India Company that the British Government was trying to force on them. They only lowered taxes to force their competition out of business so they could raise them again later.
This music tax is remarkably similar to what the Boston Tea Party was in protest against.
There is no -1 Disagree mod. Slashdot.org/faq defines mod options. USE IT.
This is just a fancy way of the music industry trying to hook up an IV drip tube to everybody's credit card account. It is like Netflix, but with music.
My first problem with this is that the music industry is only interested in promoting big-hit mass-market stuff that applies to the lowest common denominator. Excuse me, but I don't want to give my money to Britney Spears.
My second problem is that I want to be able to opt out of paying for more than I use.
My third problem is that a structure like this gives the music industry too much leverage in the internet world, and I prefer a free internet.
Never, I say!
Everyone seems to assume the money would go to the record companies. How about we establish a music tax and allow musicians to register their copyrights with the Library of Congress to get a cut of it? We could completely remove the music industry and its associated overhead from the equation. Musicians wouldn't have to worry about marketing anymore, everyone would get a share and we could remove the drag on society that the RIAA has become.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Canada has a levy on blank media (currently just CDRs and tapes, not DVDs), and a right to make copies for personal use. (There's some question about whether allowed copies must be onto levied media, or whether they can be made copy: but it is not a copyright violation to make the private copies.)
There are lots of reasons to dislike this: you have to pay it even if you use the CDRs for data or your own music, the rules for distributing the money don't bear a close connection to what actually got copied, payments are only made to Canadian collectives, it doesn't apply to copies made on the more common media people use nowadays, etc.
The CRIA (the Canadian subsidiary of the RIAA) lobbied to have this put in place because it looked like a cash cow, but lately they've been lobbying to get rid of both it and the personal copying right. This is likely because they don't get a large share of the levy, which goes to copyright collectives first, and is distributed to their members (artists) as well as the recording companies.
It's probably not possible to fix most of the problems with the levy, but it is nice to know that I have the legal right to make copies of music, and don't have to worry about being sued over it. The Conservatives introduced legislation that kept the levy but did away with the private copying right (and promised to deal with the levy this fall, but things didn't work out for either the legislation or the promise). I think the Liberals are also in the pocket of the big media companies, so they will probably support that legislation if it ever comes to a vote.
So you should demand a blanket license to copy for personal use, not just a promise not to sue, and then this "tax" might not be such a bad thing.
No one wants an American car. Few people are willing to pay plastics discs of music. Why are we wasting our time trying to save these failed business plans. The executives are clearly not able to turn a profit. Why do we think the are entitled to their income.
I know that everyone says they are too big fail, and what about the jobs. Well, I still believe in America. I believe that they failure represents an opportunity, not a termination. If these companies are no longer wasting resources, well those resources will be available to other more innovative firms.
As far as the job losses, and 'main street' argument. How many houses have been saved since the bankers stole $400 billion from the american taxpayer. And how many jobs did Chrysler say there were going to cut as soon as their handout is given? Here is a thing to think about. One trillion dollars pays for almost 150,000 so-called welfare recipients. People who have and raise families, pay rent, spend all the benefits at the grocery store for food and necessities. they don't buy jets, figure how to screw a person coming in for a loan, or go crying to washington for a bailout. Here is one thing I think we can all agree on. A person pulling in $7000 a year is much more likely to go out and look for a job, or create a job, than a person pulling in 40K a year making cars no one wants.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
There's something about art that doesn't readily lend itself to business. Actually, there are a lot of somethings about art that doesn't lend itself well to business.
1. Art is often temporal even though some is timeless. And you just never know when it may become interesting again. But instead of letting the people have their art after a specified time has passed, the business people have bribed legislators to push the expiration date on are back "forever" denying the public their side of the bargain... the side of the bargain that says "we will respect your copyright for a while and then you let us have it."
2. Art is a matter of taste and opinion and therefore has different value to different people. Business puts it all in the same sized and shaped box and puts it all on a shelf with similar prices with no refund if you don't happen to like it or think it is worth it. There is no standard measure for quality, and it is quite difficult to quantify or appraise.
3. Art cannot be duplicated effectively. When art is duplicated and copied, all copies and sometimes even the original loses its value. The industrialization of art demeans the art and the artists. There is nothing wrong with one-hit-wonders -- they are sometimes the best songs ever and if that's all that ever comes out, then that should be just fine and we should appreciate it. Trying to duplicate artists is even worse... how many boy-bands were there before they eventually got so tiresome that people couldn't stand any of them any longer? The same goes for movies... how many "Rocky" movies? How many Star Treks, Star Wars, Indiana Jones or Lethal Weapons will the market bear? There is some value in fandom and unquestionably some movies demand sequels, but how much is too much? And worse, how many of the "same movie" will they make because they thought a "formula" was successful and worth repeating? Will we run out of comic book heroes before they move on the nursery rhymes and classic children's stories?
People are tired of it and getting moreso. I believe we are getting to a point at which civil disobedience is most certainly in order. Copyright law has forgotten its half of the bargain and so I feel the bargain is null-an-void. Screw the copyright industrialists. They aren't the creators. They are just the people abusing and exploiting the creativity of others. Many artists are demonstrably showing their own disobedience to the masters of media by publishing in their own ways. It is for that reason alone that "music taxes" should never be allowed to exist. There is more than one path for money to flow and more than one medium for art to exist, reside or be recorded upon. Bittorrent isn't used exclusively for sharing illegal media and MP3 format isn't used exlusively by copyright infringers. These copyright industrialists no longer and arguably never have controlled the entire marketplace and therefore have no claim to tax the entirety of music or any other art form.
Because it's easier to sit around on your ass and complain and mutter ominously about job losses while holding out your hand than it is to get up, lose some metaphorical weight and breathe some new life into the industry by - GASP - doing something different. Especially when your lobby group is intimately acquainted with the government.
Reminds me of an old joke:
Q: Why do they bury prairie farmers only two feet underground?
A: So they can still get their hands out.
Substitute "entertainment industry executives" for "farmers" and the joke gets new life. See? Even I can do it!
Normally I look beyond the surface to see what is being discussed, but half way through I realized, "Music Tax"?? --And realized that after all the smoke and mirrors, switchbacks and rationalizations are summed up, the convoluted system whereby music has been harnessed by the wheels of industry, "Music Tax" describes it exactly.
Pay tax to listen to music. I'm certain given enough time and marketing, logical arguments could be made to stick for implementing a Sunshine Tax, and a Happiness Tax.
And it's why the Empire is falling.
-FL
So the bigger "why" is this: Why can't we just agree that taxes in general are a bad thing? It's not just the music tax that would be bad, it's almost all of them. Of course some very minimal taxes are necessary to build just enough government to protect our freedoms from anarchy and external threats, and to provide for a very few public goods like roads, but otherwise taxes are bad. Any time you take money in the form of taxes, you are taking money out of the economy that could have been used productively, and giving it to government which, without the pressure of market forces, is not going to have any incentive to use those resources in an optimal way.
And for those who are skeptical, I think I need to go no further for an example than to point to President Elect Obama's appointments for cabinet and agency heads. It's not the "who is appointed" that matters, it's the how freakin' many are appointed. Seriously, its like he's appointed three or four cabinet or agency heads a day for the past month! We started out this country with only three secretaries. Are all these cabinet positions actually providing a service? You've got the department of energy with nearly 30 billion dollars, a department that was created by Jimmy Carter to help us achieve energy security and independence. Obviously that didn't happen, and in fact we've gone the opposite direction, so what exactly are they doing over there with all those billions? Then you have the department of education (also created by da man Jimmy Carter) with what, 60 billion a year? They are supposed to ensure our children have a good education, yet we spend more money per capita on students than anywhere in the world and have some of the worst results of any industrialized nation. What in the world are they doing over there with all that money, besides handing large sums directly to the teachers unions?
I think you see my point. You can go right down the list... secretary of health and human services, secretary of housing and urban development (that's been a real bright spot of success, right?), secretary of agriculture, secretary of labor, secretary of veterans affairs (we need a whole cabinet branch for this?), etc. We've taken hundreds of billions, if not trillions, of dollars out of the economy annually through taxes and given it to these guys. Is that productive, especially in comparison to letting that money drive growth in our economy, which raises the prosperity of every single citizen?
Taxes are a bad thing... they simply allow the bureaucracy to expand to meet the needs of the expanding bureaucracy. I think Dave Ramsey said it best when he said that the economy is a wild, powerful dog, happy and free. And the government and its taxes are a tick on the backside of that dog. A tick that, in some of the more productive sectors of our economy, is easily 40% of the size of the dog!
Beware of bugs in the above code; I have only proved it correct, not tried it.
In the Netherlands we have a music tax. Downloading is legal here, but blank media and radios on the shop/work-floor are taxed by a private company that represents the recording industry. Rather like the RIAA proposes to do here. Up until now they have collected a total of 350.000.000 euros and they lost about 80.000.000 of it in the credit crunch. Not a penny of has been paid to musicians, but their giant office building is lined with marble columns and has golden doorknobs. The book publishers saw how amazingly profitable this corruption was and have started to send bills to people with scanners, photocopiers and printers. On behalf of "writers". Who, no doubt, will also never get a penny.
Because musicians will not get the money.
Trust me, musicians don't get the money now!!!
I hold very few opinions. I hold information based on observation and fact. If you wish to disagree, please use facts.
Funding artists through taxes isn't that crazy an idea. I'm sure the conservatives here will mod me down, but the creation of art and science bring about a positive externality; funding the arts and sciences is beneficial to the entire market. I think such public funding would be more beneficial than the monopolies on ideas that the RIAA and SCO would like to perpetuate.
The RIAA doesn't want their proposal to be called a tax, for good reason. If everyone called this a tax, then people would start asking why the RIAA is in charge of levying taxes. The taxpayers would demand a say in where the money goes; we'd want to eliminate the middleman or at least choose a non-profit organization as the middleman. In a world where ideas are distributed freely whether or not we want them to be, taxation is a whole lot more enforcable than intellectual property. The recording industry sees this, and they're trying to transition to the new system while keeping themselves in a position of power.
Call me a socialist if you'd like, or complain that you don't want to fund someone else's idea of art, but what we've got now and what the RIAA is trying to create are a hell of a lot worse than taxes. I believe the taxpayer will see a significant return on their investment in the form of technological and cultural progress.