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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?
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Profit???
At the very least campaign contributions?
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.
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.
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.
Funny thing is in my neighborhood you can frequently hear some birds chirping like they're reciting car alarm tones and the most hilarious part is they memorized the entire alarm cycle and will do so in the exact order on common alarms.
I'm sure birds in other places have done the same thing, but in order to find out requires actually going outside. :)
This space is not for rent.
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.
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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!
Dear Sir,
Those alarm tones are copyrighted and these birds are in violation of royalty agreements. Due to their lack of financial mean, redress will be targeted at the neighborhood associations that let this blatant abuse of intellectual property rights occur unabated.
We will be in touch shortly!
Sincerely,
CAIAA - Car Alarm Industry Artists Associations
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?
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.