March 29, 2008
Musica Gratuitous

Photo by Fanch the System.
Illegal music downloading has been a hot topic for almost a decade now, and the conversation has moved at a glacial pace. In the States, the music recording industry has sued individual consumers, encrypted CDs to prevent burning, and passed overreaching copyright laws to halt the momentum of rabid file-swappers. None of it has stopped people from getting ripped music off the internet since the process is just too quick, easy, and convenient.
Canada now steps in with its own recommendations on how to handle the situation. The government has proposed its version of the DMCA, which has been panned so badly that it's now hiding in the recesses of the Conservative basement waiting for us to get distracted by something shiny before reappearing. Meanwhile, the Songwriters Association of Canada has proposed a monthly levy of $5 on using the internet that would give unlimited access to downloading, with the proceeds from the levy distributed to artists.
Of course, since you boys and girls have been so naughty, no one's really asking for your opinion. (Why open a dialogue when litigation and imposed levies work so much better?) If any changes stand a chance of making a lasting impact, the industry better understand what the consumers are thinking.
So: how do you want the future of music to be? (Our terms are defined after the fold, by the way.)
Mandatory Monthly Fee
The Deets: A monthly fee of $5 to legally download an unlimited amount of music costs the same as buying five CDs a year at a brick-and-mortar store, which isn't a bad deal.
The Damage: Of course, once sales drop to nothing (like Jesus, this levy would only need one CD to feed a nation of music listeners), the fee will rise until the music industry essentially becomes a public utility supported by you and me.
Example: Er, hospitals and libraries?
Pay What You Want
The Deets: Kinda self-explanatory, no?
The Damage: One problem with this option is that only accomplished bands and artists have a reasonable expectation that fans will pay. Will smaller bands find similar success without the big money push from the music labels? Also, what if people's idea of fair value starts to slide since there's no suggested price?
Example: Radiohead did this and netted an estimated $3 million for In Rainbows. Torontonian Jane Siberry also tried PWYW and apparently fans paid more than they would if the music had been on iTunes!
Sponsored Music
The Deets: This option is similar to Pay What You Want, except fans pay at the beginning of the process, which ensures that the artist is compensated. Fans would support an artist by paying for costs to develop the music and, then, the music would be released to be freely downloaded. As much as music lovers cringe at the idea, there could be corporate support as well. Corporations sponsor artists' tours, so why not their music as well?
The Damage: Sure, artists may not make as much if people are contributing towards only the production costs, but they could always list an asking price instead. We all know the pop acts already pimp themselves out for bar mitzvahs and birthday parties. Even better, maybe some artists will have an asking price to not release any new music. Will.I.Am, name your price!
Example: Jill Sobule did this with her latest album, grabbing the $80,000 required for start-up.
Free Low Quality, Pay High Quality
The Deets: The music in low quality is released free (kinda like, you know, the radio) and a separate higher quality version for music purists is released for not free.
The Damage: This option allows newcomers to sample an artist's music without hurting their wallets. At the same time, a higher quality edition will satisfy fans who are willing to pay stupendous amounts for the "whole experience": artwork, fancy collector's encasing, special features, snippets of the band's hair.
Example: Nine Inch Nails went this route and scored a whopping $2.6 million in sales through their website and Amazon, with $750,000 from their Mega Super Duper Awesome Edition alone.
Free Music, Period
The Deets: The thinking goes like this: who needs record labels anyway? Make the music free and then have artists make money on tour. It's how most artists make money anyhow. Besides, record labels suck! (As Amy Poehler as Avril Lavigne would say: "Bleh! Wah! I'm a punk!")
The Damage: Of course, when the carbon emissions from all the travelling artists on tour melt the ice caps, those record label execs will have the last laugh! Bah, progress!
Example: Uh, in the 1500s before the creation of copyright laws?


I found the Andrew Cash article in Now to be a fairly persuasive argument in favour of the Mandatory Monthly Fee. Of course, the government would have to take an active interest in regulating it so that, among other things, the price couldn't climb beyond the rate of inflation, but—if done properly—I think it's a good solution.
Jonathan, are you really endorsing the concept of allowing the private sector to levy taxes?
I'm actually planning to pitch NOW to let me write a counter-point article explaining why we should be passionately against any kind of mandatory fee. I think you're a really smart guy, Jonathan, and so your comment reinforces my belief that I need to stop procrastinating and get to work.
While linking to another post might be weak, Michael Arrington (who I frequently disagree with) has done an excellent job of summarizing why a mandatory tax is extortion. It is the dying gasp of an industry that is trying so hard to justify its continued existence, that they are hoping the governments will prop them up.
Like that article says, it is too late to start charging people for what they can get for free. That they have managed to confuse well intentioned and intelligent individuals into projecting their loyalty to the bands they love on to the very same corrupt labels that have oppressed them for decades in the first place is a travesty. We are being had.
If you love a band, copy their album for someone every day. Don't you get it? We are what comes next after the music industry dies, because music shouldn't even be an industry.
"Illegal music downloading has been a hot topic for almost a decade now...."
I assume you mean in the US; it's not illegal in Canada. Stop letting the RIAA and its Canadian sockpuppet (CRIA) phrase the debate here. It's not illegal, period.
Don't forget: "Home taping is killing music."
I wrote about this the other day. The main problem is that there's no ability to opt-out, that's a complete deal-breaker and that's what makes it a tax.
The other main problem that spins off that is the precedent. How many other private industries will want to levy taxes because of competition with the Internet? How many other taxes would we have to pay?
Plus, copyright wasn't designed to garner fees from everyone. It was designed for the age of the printing press, and adapted to the broadcast age. In both cases, there were few broadcasters and distributors and they were large. Now, anyone can be a broadcaster or distributor. It doesn't work anymore, and it won't.
I don't believe any system needs to be designed. People who recognize the digital nature of music (i.e. infinite supply) and leverage it as a promotional tool for scarce goods (their time, embodied recordings, concert tickets, etc) are still making money, as you noticed. What's required is a shift in business models, not a government subsidy.
You're right, Rek, in both that I was referring to the situation in the United States and that it is legal in Canada. Still, the situation of illegal music downloading in the States is what drives the discussion in Canada.
Good clarification though.
I would hope a manditory fee would be a non-starter, but then I realize we've already got a blank CD/DVD tax. Has any of that money ever gone to artists? Does anyone really think this $5/month fee will be any more fairly redistributed than profits are the industry now? Aren't most reasonable people going to be seriously pissed off about the manditory fee?
Ultimately I think we'll end up in a situation... pretty much exactly like we've got. Purchasing music will effectively be a voluntary act. "Features" like a lack of DRM will hopefully become the norm as the cost to develop & implement it outweighs any perceived benifits.
I would also expect to see more and more licensing options as the industry seeks out alternate revenue sources. Imagine budget licensing deals where you can acquire affordable rights to a song for a independent movie or videogame, or even for a video you want to use on the web. Give those would-be customers some more options. Make it really easy, and standardized - through iTunes or Amazon or wherever. Everyone's a content-creator these days, no?
Jonathan: Why should a private corporation be entitled to a guaranteed stream of revenue? You work on the assumption that the monthly would end up in the pockets of the artists.
How much of the CD levy has been paid out to artists? How much of the money the RIAA has won in the US has been paid out to artists?
And naturally, the fee would be accompanied by more government regulation. Yup the same type of government regulation that has created mess in the ISP sector with Bell and Rogers screwing over customers and other ISPs because of some outdated belief that Canadian ownership should trump competition.