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!"

MP3 Tax Back in Play

The Canadian Private Copying Collective (CPCC) is trying, once again, to impose a levy on the sale of "MP3" players for 2008-2009. That includes the popular iPod, and other portable audio players with built-in memory that the CPCC says can be considered a "recording medium".

The way I see it, if I buy it, I own it. Let’s use the real-world, every day example of clothing. If I buy a pair of jeans, then lend said jeans to my girlfriend for a night out on the town, is this unauthorized use of the legwear? After all, I bought them for me to wear, not to share with anyone else. From the manufacturer/retailer’s perspective, my friend was a potential customer that could very well have forked over the dough to buy those jeans herself, right? Should I then have to pay a “lending” levy on the jeans that cover how many friends I might lend them to once I’ve purchased them?

The same goes for music, except replace the jeans with the MP3 player, or rather the memory within the player that holds the tunes. I can transfer music from my MP3 player to my friend’s device, and therefore, she won’t have to purchase the tracks herself. But who’s to say she would have purchased them at all? What’s more, now she’s actively listening to these tunes, and may wish to purchase a future album now that she's gotten into the groove of their music. And perhaps she's even exposed others to the tunes who in turn decide to purchase the CD or download the tracks. Are you following me?

If the argument is based on the fact that I can copy tunes back and forth amongst my own devices, what’s your point? If I buy a nice designer top, can I alter this top, wear it underneath a vest, maybe sweater, layer it with other tops, and so on to create several different outfits? Sure I can. It’s mine!

Bottom line: artists should be compensated for their music via the sale of CDs, and even digital tracks: it would be ridiculous to think otherwise. But once purchased, the owner of these tunes should have the right to burn them to a CD, transfer to an MP3 player, or stream them throughout his home in any way he pleases. Each device that facilitates these tunes are that person's business.

Of course there will always be cases of counterfeiting, or unauthorized sales: this happens in any industry (think "designer" handbags, DVDs, or "prescription" pills, for example). These individuals should be prosecuted. But the rest of us folk are just trying to enjoy our music and technology any way we can. And so we should.

I’d love to hear your views on this topic.

Background: In a 2003-04 decision, the Copyright Board approved the CPCC’s request for a levy on the hard disk or flash memory embedded in iPods and other MP3 players. The Federal Court of Appeal later threw out this decision, stating that the CPCC had no jurisdiction to impose such a levy. Subsequent to the decision, several digital audio player manufacturers reduced the price of their players. The private copying levy rates have remained unchanged since 2001; and they expire on December 31, 2007.