Tuesday, December 9, 2008

CD Levies Go Up for the First Time Since 2001

Just when I thought we were making progress in the music industry, with physical CDs coming down in price and more and more studios and digital download sites embracing DRM-free tunes, the Copyright Board of Canada decides to stick another thorn in our sides. The organization has just approved an increase of the levy placed on CDs by $0.08, from $0.21 to $0.29. This is the first levy increase since 2001.

"The mechanical royalties that record labels pay to record a song onto a pre-recorded CD have increased," claims Secretary General of the Board Claude Majeau. "Because consumers now use compression technology when they record music," she adds, "the average number of music tracks copied onto a CD went from 15 to more than 18."

Huh? I find it difficult to justify an almost 40% increase in levies because three more songs could fit on a disc even though they'd be of lesser quality. To me, it seems like a grasping-at-straws attempt to justify an unreasonable price hike. I won't even get into the arguments about people using recordable CDs to store other types of data, like personal JPEG images or documents.

The Canadian Private Copying Collective (CPCC) says that its royalties will remain "relatively stable at about $30 million/yr", while the rest of the funds will be distributed to authors, performers, and producers of recorded music.

"This is because the sales of both blank audiocassettes and CDs are expected to decline," adds the Collective. (The CPCC has already tried to levy digital media players like the iPod, but that was thrown out this past January when the courts ruled that the Copyright Board had no authority to do so).

Ahh. Now it makes sense. Grasping at straws, indeed, but the motive is now clear: the CPCC wants to ensure that, in addition to composers and producers being compensated accordingly, that its healthy royalties remain in tact. Should this be at the arguably unreasonable expense of the consumer? Absolutely not!

Nevertheless, at a time where pre-recorded CD sales are dropping, it doesn't surprise me that the industry will try to make up for the lost funds through whatever other means it can, including recordable media. But will this drive people further away from "burning" CDs altogether, and deep into the arms of digital files stored on the PC and transferred straight to the MP3 player, or streamed to the home theatre? This seems to be the most affordable method, not to mention the most tech-savvy.

In this sense, while the CPCC and Copyright Board think that the increased levy could offset a drop in sales, more and more consumers might just turn their noses and bark a snooty "so what? We don't want your physical media anyway!"

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Bill McMinn said...

The recording industry wants those who download songs without paying fined $500 per song, and then gets part of the cut from CD's burnt using songs downloaded both legally and illegally. Talk about a third world police state!

Michael said...

I've never seen any explanation of how they distribute the money from this levy. Does anyone know? What percentage actually goes to the artists and what goes to the lawyers and royalty management? How do they determine which artists gets paid?