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!"

"Ripping" Vs. "Sharing"

The debate about strict copyright laws, digital downloading, and the illegal "sharing" of music has gone on for some time. You shouldn't be able to make a back-up copy of a CD, say some, because that's copyright infringement. You shouldn't be able to download music from a legal Website and then burn it to more than one disc because, again, that's copyright infringement. Apparently digital downloading has caused this horror in the music industry. Yet today, I witnessed something that had me scratching my head. After lunch with a couple of colleagues, they wanted to pop into HMV to grab some "new" music for their iPods. Sick of the same old, same old, they decided to swap: you buy a few CDs you like, I'll buy some I like, and then we'll trade. Hmm...makes sense, right?

To the pro-copyright camp, they just violated the very sanctity of music. How dare you buy CDs and trade music like that? Essentially, that means you got every CD half-price, right? But from the pro-digital, evolution of music standpoint, what they've done is just opened each other's eyes to new music they may never have bothered to buy, in physical format or otherwise. Now not only is there a greater appreciation for different types of music, but there's also the increased chance that they'll like what they hear, and add a new artist to their radar for future purchases. What a concept!

On that note, I was pleasantly surprised to see that there were new CDs available for as little as $12.99, and even $10! The last time I recall, new releases were, at best, $13.99 or $15.99. There were even some pretty good CDs selling "two for $12" or $25. Not bad. Still, I hesitated to buy anything, thinking that I'd just download the specific tunes I want and make a "mixed" CD (only one, of course. God forbid I make one for a friend as well). But at the prices they're at, it's almost worth it to buy the media (especially for the potentially better quality) and save myself the time.

I can't believe I'm saying it, but maybe CDs will return to profitability as people decide that they can't be bothered, or don't have the time, to compile a list of tunes, download them, and burn them to a CD as normal practice. If it isn't a hobby, it can certainly get time-consuming. And iPod owners know how expensive it can also get buying tune after tune, not realizing how much they add up until you get the dreaded credit card bill!

I could be way off base here, but it's food for thought, nonetheless.

On another note, Happy Thanksgiving to all of our readers in the U.S. We wish you all the best on this wonderful holiday. Eat, play, and be merry!

Battle Heats Up Among Artists, Labels, & Digital Downloading

Musical artists have banded together to create the Featured Artists’ Coalition in order to demand greater control and ownership over music that’s distributed online and, more importantly, for a larger cut of the revenue pie. While it's easier to determine who gets what when a physical CD is sold through a retailer, things become stickier when you’re looking at individual tune downloads sold through various Websites. It’s like déjà vu with the Hollywood Writer’s Strike, which just took place late last year, and which centred around, among other issues, video content distribution online.

The organization is asking, among other things, that artists always retain ownership of their work, that all agreements are conducted in a “fair manner” (you mean this isn’t the case now?), and that artists must always be informed on how their work will be exploited. Recently, for example, artist Jack White wrote a song for the new James Bond flick, which was then reportedly unbeknownst to him released first in a Coca Cola commercial.

Artists are also asking that copyright be by license, not by assignment, and be limited to 35 years. When it comes to performers that don’t write their own work, these guys are asking that they receive the same rights as the authors themselves.

The artists involved in the Coalition already numbers more than 60, and include some really big name musical artists like Radiohead, The Verve, Craig David, Robbie Williams, and the Kaiser Chiefs.

It was only a matter of time. While we have seen a battle ensue within the music industry ever since digital music downloading has taken over, artists have never really taken a major, unified stand. Music labels have fought it out to create favourable deals with digital downloading companies, and have even taken legal action against illegal, peer-to-peer file sharing sites. But have any of these deals really worked in favour of the artists?

It seems that while everyone involved has slowly begun to warm to the reality that is digital music downloading rather than trying to stop it, another issue has been brewing: payment. A song sells for $0.99 on iTunes versus a full, $20 CD in the store. Who gets what out of this deal? Can we really divide profits from a buck 50 ways in a manner that looks out for the interests of all involved versus a full CD?

It sounds like whatever the current situation is, artists aren’t happy. And while the record labels or digital download sites could easily turn up their noses to the artists and say “too bad”, the reality is that these are the guys actually making the music. Back in the day, artists may have been at the mercy of the guys who could get their music sold, and get their name exposed to the public. It wasn’t so easy to record, create, and sell your own CD: what struggling artist had the means to do that? But today, it’s pretty easy to set up your own digital download Website, or to get your music out to millions with just one click (MySpace, anyone?) So it’ll be interesting to see how this drama unfolds.

HMV Drops CD Prices by as Much as 33%

Is the traditional music CD in that much trouble? As of today, HMV says it will sell the majority of its music CDs at a 20% lower price point. In some cases, we’ll see up to a 33% price cut. Is this a strategic move on HMV’s part to become the leader in the music CD arena; or a necessary step to keep that part of the business alive?

Music retailer Sam The Record Man just closed the doors to its iconic downtown location this summer, clearly as a result of stiff competition from the online digital music marketplace. It’s no secret that people are downloading music online, but this isn’t to say that there aren’t still people who prefer a store-bought CD so they can enjoy the high-quality sound, and pamphlet inserts. Nevertheless, the number of customers who fit this group have dwindled considerably over the past few years.

HMV has made some pretty smart moves in order to remain profitable in the wake of the changing music landscape. The company has historically been very big in the DVD retailing side, which adds another source of revenue in addition to CDs. Last summer, HMV also added video games and gaming systems to its product roster, recognizing the huge growth in this particular area. This bold, new price reduction strategy can only mean good news for HMV. It will be interesting to see if other music retailers follow suit.