Debunking The Idea Of A Music Tax For The Creation Of New Music

from the just-slightly-better,-but-not-much dept

Thu, Oct 29th 2009 2:10pm — Mike Masnick

SteelWolf writes in to let us know about a blog post rehashing the idea of setting up a "music tax" to support musicians through a flat fee charged to everyone's ISP account:

Music is important. It is ubiquitous today with good reason: we just can't get enough of it, and its life-enhancing effect is ever-changing and ongoing.

If it had been possible for the past ten years to download nails, most of us would long ago have acquired all the nails we could possibly need, nail factories would have closed down, their workers and bosses found new jobs for themselves, and it would be a dead issue. But music-making is such an important act that millions do it even though they receive nothing for it. They always have done, even back in the heyday of the recorded music industry, when students bankrupted themselves to get it (I know I did) and bands scrambled to play gigs for next to nothing (guilty, again). So in the scheme of things music is at least as worthy of state subsidy than, say, the automobile industry. Music isn't any less precious than it used to be, it's just that its commodity status has eroded: unlike car workers the customary method of getting (some) artists paid is failing.

I am in favour of a flat fee on each internet connection, collected by ISPs, to encourage musicians to keep producing new work.

Now, I've gone into great detail on why a music tax is a terrible idea in the past -- but that was addressing ideas like Jim Griffin's Choruss plan (which, by the way, we're still waiting to find out who the tens of thousands of students who are supposedly already using it are, but we'll leave that aside for now). This idea, from Chris Ovenden, is slightly different. It is not a "download license" or a "download tax" as it's really a fund to pay for the creation of new music:

I would use such a fund to commission new works directly from up-and-coming and established artists. I certainly wouldn't try to monitor all downloads or anything hyper-impossible like that. If the problem of trying to monetize or prevent private copying goes away, so does the threat of monitoring all communications which is being suggested as a "solution" to the "problem" of filesharing... Keep the amount each person has to pay low, and spread the collected funds widely and evenly among as many working artists as is feasible. The more successful acts will most likely have other income streams and won't need a massive top-up; smaller artists will be grateful to have their next recording project funded. And everyone will benefit from an influx of lots of new work (released under CC license or similar).

This is, obviously a bit different than the usual suggestions for a music tax, but that doesn't make it much better. First as is noted in the comments on his post, if you open the door (even slightly) for this to happen in music, then you have to do it in pretty much every other content industry as well: movies will want their own tax, as will software, photography, newspapers, quilt making, painting, blogging and so forth. Where do you draw the line?

Second, this will still leave people who file share open to lawsuits. While he claims that the "threat" goes away, there's no way that the record labels say that they'll allow all past infringement in hopes of getting a few dimes sent its way from some bureaucracy.

Which, of course, brings up the third problem: you still have a bureaucracy, and how does it determine who to distribute the funds to? How is it possibly fair for someone -- rather than the fans themselves -- to determine who gets the money.

And that brings up the biggest point of all: this isn't needed. At all. There are plenty of ways for artists to set up a smart business model that allows fans to support them directly and to fund their future works. Why make it more inefficient by adding unnecessary and market-distorting middlemen? The only situation where this makes some sense is if there weren't ways for artists to go direct to fans with their own models. But there are -- and it's getting easier every day. So, instead of a "tax" give fans a "reason to buy" and it becomes a better situation for everyone involved.

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Filed Under: business models, file sharing, funding new music, music, music tax

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Pwdrskir (profile), 29 Oct 2009 @ 2:22pm

Tax for the inept
Why should soda pop and music have special taxes? Yea, I know, booze and smokes do so its got to be the way, right? Creating a tax for what personally ails you is the mark of an unskilled mind.
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Chuck Norris' Enemy (deceased) (profile), 29 Oct 2009 @ 2:23pm

Buy my music
Umm...I am a musician...yeah...can I have some money?

If it had been possible for the past ten years to download nails, most of us would long ago have acquired all the nails we could possibly need, nail factories would have closed down, their workers and bosses found new jobs for themselves, and it would be a dead issue.

Yeah, they got new jobs and moved on. Recording industry...please do that! We don't need your services anymore. It is a dead issue.
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Anonymous Coward, 29 Oct 2009 @ 2:32pm

"I am in favour of a flat fee on each internet connection, collected by ISPs, to encourage musicians to keep producing new work. "

I am against the idea, as creativecommons.org proves musicians are perfectly capable of creating works without any tax. There is no reason to unnecessarily subsidize musicians and take give them incentive to not do something more relevant to what the free market demands, the argument that we need to create a tax to encourage new music to exist is nonsense.
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Grey Ferret, 29 Oct 2009 @ 2:36pm

Internet = Music Downloads (what else could it possibly be used for?)
This makes perfect sense. After all, EVERYONE who uses the internet downloads music right? So no one would be paying a tax on something they don't use. Right??

And this makes even more sense for businesses out there. Because the only reason they even have internet access is for their employees to download music.

This is just another example of someone who doesn't have a clue about what the internet is.
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Anonymous Coward, 29 Oct 2009 @ 2:36pm

Re:
Seriously, out of all the things to subsidize music is NOT one of them. It's not a priority. Sure it's important but not subsidizing it does not mean there will be no new music. Many people are willing to release their music under creative commons licenses which are designed to restrict the effects of copyright. Heck, I would rather them subsidize health care with that money than music. Music is not something that needs to be subsidized. What about using that money to help solve world hunger instead? There are more songs out there than you can listen to in your entire life time so it's not like we need to encourage new music to be created being that people are perfectly capable of creating new music without subsidies.
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Grammah Nazi, 29 Oct 2009 @ 2:50pm

Your first sentence is a run-on.
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Anonymous Coward, 29 Oct 2009 @ 2:55pm

Would deaf internet users have to pay the Music Tax?
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Grey Ferret, 29 Oct 2009 @ 3:06pm

Re:
Of course they would, since Windows Media Player provides visualizations for music media.
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Anonymous Coward, 29 Oct 2009 @ 3:07pm

This one time at band camp...
We should just tax everyone who can't play a musical instrument because those people are bad news.
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Brooks (profile), 29 Oct 2009 @ 3:11pm

I'm for it
Hey, I am going to create some truly amazing works in the next few years. In fact, not only am I going to write music that will put Bach to shame, I'm also going to reinvent the novel, combine the best parts of Fellini, Spielsberg, and Welles into an entirely new type of film experience, and maybe cure cancer while I'm at it.

For those reasons, I'd like to propose a modest tax of, oh, $1 per connection per month on all Internet connections, payable directly to me. Oh, you folks are going to be so thrilled with the work I'll do!
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Anonymous Coward, 29 Oct 2009 @ 3:13pm

A "tax" that isn't redistributed evenly is a very unfair of trying to advance an agenda or a movement. Getting the masses to pay for musicians and acts they might not give a crap about isn't exactly a fair trade.

Even Canada's blank media tax is a crock, as the money doesn't appear to go to artists from outside of Canada who are victims of copyright violation, just to Canadian artists and companies. So it's a tax on outside artists more than anything.

It must work though, otherwise we wouldn't have Nettwerk.
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Shaun Wilson (profile), 29 Oct 2009 @ 3:16pm

No encouragement necessary
This sort of thing keeps on showing that people consistently fail to recognize: 1 - that capitalism does work and extremely well at that, and 2 - why it works. Pure capitalism works because if there is a desire that is partially or wholly going unfulfilled - say the production of recorded music - then there is an opportunity for people to make large sums of money by fulfilling that desire.

It's econ 101, supply and demand. First low supply + high demand = high prices (and profits). Secondly high prices (and profits) = more production, leading to lowering prices and increasing supply until an equilibrium is reached (though the equilibrium fluctuates over time).

If the government interferes with this tax (even more so than it already does with copyright) then they are funding music at the expense of things the tax payer desires more. This can even be broken down to the level of whether and to what extent rap should be funded as opposed to classical music.

The best situation that can be hoped for with interference like this is that more is produced than is wanted, at worst it limits the ability of the market to produce, actually reducing the overall supply.
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Richard (profile), 29 Oct 2009 @ 3:16pm

Re: This one time at band camp...
Well in the UK we have already done something a bit like this. we have a tax on everyone who can't do statistics and - yes we use it to fund music. (it's called the National Lottery).
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reechard (profile), 29 Oct 2009 @ 3:28pm

they missed the boat
Labels (+ the RIAA) have their heads so far their arses they couldn't imagine letting lo-fi mp3s go. One thing you could have had is 2 simple (ISP-based?) music subscriptions, limited hi-fi and all-you-can-eat. Here is my vaguely related post about copyright and takedowns. Instead of course we are through the looking glass, and they want performance royalties for ring tones. iTunes laughs all the way to the bank... The big 5 labels and the RIAA should consider seppuku - it's the only honorable thing left.
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Ryan, 29 Oct 2009 @ 3:34pm

Re: No encouragement necessary
Not to mention that it creates tremendous overhead in constructing yet another new bureaucracy to collect and distribute, then mangles flexibility and progress by making everyone play by its predefined rules(see: Medicare).

Not to mention that it seems like this would do nothing for innovation or quality--artists would have no incentive to make good music under this plan, and anybody that wanted some extra cash on the taxpayer dime could suddenly release a crap album(I'm thinking of William Hung) and get paid for it. Good music would still be produced out of the incentive to get extra funds beyond the tax, such as from concerts, and from good artists' desire to produce work they're proud of independent of its financial rewards.

People need to get over this idea that taxes designed to benefit a subset of citizens can help them without hurting another group, or without skewing incentives, or without harming the efficiency of the economy by constructing additional bureaucratic black holes.
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Anonymous Coward, 29 Oct 2009 @ 3:35pm

Just another way
to make sure that they *IAA Nazi's get to rob you more than they already do. And this time you can't say no or (like me) just not buy.. I have to have my interweb which means I'd HAVE to be paying for music which I don't really listen to anyways.
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tracker1 (profile), 29 Oct 2009 @ 4:09pm

Hmmm..
So, if there's a music tax, and I create a little diddy, and release it out there, I'll get a royalty check each month without doing anything else? Sounds like welfare to me.
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Anonymous Coward, 29 Oct 2009 @ 5:07pm

There are only so many ways to play 12 notes to a rock beat. When music is created that I haven't already heard over the last 40 years, I'll think about paying for it.
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Anonymous Coward, 29 Oct 2009 @ 5:51pm

Re: Tax for the inept
You don't seem to understand. The taxes on soda pop, booze, and smokes go to the government, and they do not support pop, booze or smokes. The "music tax" is paid to ISPs and goes to support music.
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Scott, 29 Oct 2009 @ 6:52pm

Taxes
What about artist who paint. Are we going to start taxing cars to support starving artist? Maybe the RIAA should start taxing everyone for breathing, whoops, sorry AIR.
If I get taxed from my ISP to support musician that, in my opinion should put out of their misery because I think they suck or if I like the song then am I entitled to d/l the music since I am being charge monthly. What if the music I like is not a supporter of the "RIAA = crooks" am I still going to get charge by the crooks?
What gives the crooks the right to insist I help support someone who thinks they are creative? They are becoming like the mafia, Pay up or we will hurt you, and next month your safety will cost you more $$$.
Give me a break PLEASE. When will common sense prevail?
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Anonymous Coward, 29 Oct 2009 @ 7:02pm

We really need a new form of government. This one is falling apart.
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Pwdrskir (profile), 29 Oct 2009 @ 7:12pm

Re: Re: Tax for the inept
Weird Al has something to say about this:
http://amzn.com/B002T1AHFQ
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Anonymous Coward, 29 Oct 2009 @ 8:11pm

Ive been working on my bureaucrat networking. In case this happens, itll be my band that gets the money. They say music is all about self promotion anyway. Whats the difference between a successfull musician and a starving one? Their temerity and biz savvy, not the pattern of chords they jangle.
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Anonymous Coward, 29 Oct 2009 @ 8:15pm

Re: Re: Re: Tax for the inept
"Tax for the inept"

I suppose if you put it that way it makes me more sympathetic to them. It's a tax for those who can't compete in the free market because they're either too lazy or they have nothing to offer and hence we should give them welfare.

Wait a minute, we already have a welfare system. I guess this music tax is just an addition to our welfare system. At least putting it that way seems to make me more sympathetic to the idea.
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Anonymous Coward, 29 Oct 2009 @ 8:17pm

Re: Re: Re: Re: Tax for the inept
So basically instead of thinking of it as a music tax just think of it as a welfare tax.
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Anonymous Coward, 29 Oct 2009 @ 8:20pm

Re: Re: Re: Re: Re: Tax for the inept
See, it's all just a matter of perspective. Now we can all feel better about paying this music ... err .... welfare tax.
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wheatus, 30 Oct 2009 @ 12:00am

NO TAXES PLEASE
Apologies for you cap haters but this really pisses me off. As a full time songwriter and musician I can assure you none of the revenue from any hideous taxation scheme will ever find it's way to artists pockets.

Downloadable Music = Software

Software must start out free and benefits from an enduring free option. Nails are things you need to keep your house together and the people who make them work a fuckload harder than I do, unless of course their life's purpose is the creation of nails.

I brendan b brown of the band wheatus do NOT support any kind of music tax. If you can't figure out how to make and offer valuable art to people who would be interested in buying it using only paypal then nature has selected you for deletion, or a cherry job at the RIAA.
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Pete Austin, 30 Oct 2009 @ 2:49am

To debunk the nails example
I have more nails than I can possible use, several tins full of them. And many of them came - free - from the previous owners of my house. Which I guess makes me a nail "pirate".

But I *still* buy new nails. One reason is, nails are all slightly different shapes and sizes and it's sometimes worth paying to get the perfect one for the job. Another is that I sometimes buy "compilation packs" of assorted tools, which include nails.

@Music industry: there's a lesson here.
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John Doe, 30 Oct 2009 @ 4:26am

I wish they would
I don't buy or pirate music or movies. I don't pirate anything. But, if they tax me a $1 for music and a $1 for video then I will start pirating. In fact, I will become the worlds greatest pirate and I am not even kidding. Do you know how many movies and songs I would like to have but don't because there is no way to buy them all?

But wait, it won't be pirating since I have paid the license fee, right? Dang, I was so looking forward to getting a Jolly Rodger tattoo.
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Anonymous Coward, 30 Oct 2009 @ 5:16am

This is a government take over of the music inductry and will not be tolerated. We will march on washington and teabag the nation. Oh - and no not forget your crazy signs.
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John Doe, 30 Oct 2009 @ 5:35am

Re:
I think you have it backwards. It is a take over of the government by the music and movie industry.
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Anonymous Coward, 30 Oct 2009 @ 5:56am

socialist tactics...
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Richard (profile), 30 Oct 2009 @ 5:58am

Re: No encouragement necessary
The free market works where you have "tractable scarcity" i.e. something which is currently scarce but where investment could reduce the scarcity. Unfortunately artificial scarcities (eg copyright monopoly) are generally not tractable - hence the free market will either fail - or more likely in practice attempt to route around them.

If you attempt to block those workarounds with laws then the market will be taken over by criminals.
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Hephaestus (profile), 30 Oct 2009 @ 6:11am

LOL .... would Yoko Ono get any funding? I think we can all agree that what she does isnt music ....
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Anonymous Coward, 30 Oct 2009 @ 7:29am

Re: I wish they would
"But, if they tax me a $1 for music and a $1 for video then I will start pirating."

That's a good idea. I don't pirate either but if they do start charging under the pretext that I pirate then why not?
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Anonymous Coward, 30 Oct 2009 @ 7:31am

Re:
"Oh - and no not forget your crazy signs."

But those signs are patent ... copyright, trademark, or somehow some kind of infringement.
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Trevlac, 30 Oct 2009 @ 7:53am

Re: NO TAXES PLEASE
And I, Trevlac Victor Ehrgeiz, of the band Mystic Slaughterbeast do NOT support music tax either.

We make music for music's sake, not for money's. If any artist wants to make money from art, then go and market it yourself. I'll send any bullshit check received from this abhorrence of a tax back to the taxpayers immediately. Fuck this tax.
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Anonymous Coward, 30 Oct 2009 @ 8:18am

Re: NO TAXES PLEASE
So I suppose my attempt to make people think about it as welfare did not make people feel better about this. Ok, let me try again with from a different angle.

Think of it as a donation. Except, instead of going to poor people in Africa it's going to rich people who don't do any work. Thanks to you there are humans out there better off than you who don't have to suffer. This give you a sense of purpose. Now you have a purpose, thanks to you there is some segment of the human population that gets paid a lot of money without doing any work and they're exempt from suffering. This wouldn't be true if it weren't for your donation.

Also, when you donate to charity much of the money already goes into "administrative" fees and wind up in the hands of rich people. Only a portion of it winds up in the hands of the intended recipients. So this isn't much different than donating to charity.

Wait a minute ... most rich celebrities wind up on crack and end up having all sorts of weird drug addictions that just make them suffer more. In fact, many people who win the lottery wind up poor because they waste their money on junk and they end up miserable anyways. In fact, if these rich people get a lot of money and not have to earn it (by producing a product the free market wants) then it's less likely they will appreciate its value enough to spend it wisely and properly manage it.

I got a new plan. I want money for commenting on techdirt. We should have an Internet tax with the proceeds going to me for commenting on techdirt. I think Mike Masnick and I should start a lobby group to encourage such a thing. Dark Helmet are you in? Do you want to get paid for commenting on techdirt? Who else is in? We will begin lobbying congress tomorrow morning. Lets also lobby the FCC as well. Heck, lets lobby the FTC while we're at it. The more agencies we can bribe ... (clear throat) .... lobby the better the results.
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TesserId (profile), 30 Oct 2009 @ 9:26am

Re: Tax for the inept
Actually, it mike make sense to fund education with stupidity taxes. The dumber the music gets, the more money spent on education.
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TesserId (profile), 30 Oct 2009 @ 9:34am

A ISP Music Tax Assumes All ISP Users Are Pirates
Would our entire tax system work differently if we assumed that everyone was a criminal and all taxes were just the anticipation of a fine?
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TesserId (profile), 30 Oct 2009 @ 9:35am

... as lobbied by capitalists = traitors
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batch, 30 Oct 2009 @ 10:40am

Re: Re: Re: Re: Re: Re: Tax for the inept
If all I gotta do is write some garbage (art is subjective, after all) and call it a song and then I'll be given free money, the question is: Where do I sign up?!

This would be a major problem for any welfare/tax that paid the content industries. Won't someone think of the children, forming bands in their parents garages, and then receiving welfare for it? Or if they didn't, because, where do you draw the line on what defines the music that gets this welfare benefit? Only if you have a contract with a label? How is that fair, to make an exclusive club that receives money for nothing? There would be incentive to keep new members from joining the free booze money club because then everyone's free ride would be that much reduced.

The immediate problems with creating this welfare/free ride for anyone with some creativity cannot be solved in a way that would be fair and equitable to the artists, not to mention the people paying this tax. Those problems need to be solved before we can entertain the pipe dream of giving people money for nothing.
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jupiter (profile), 30 Oct 2009 @ 10:49am

No new taxes
It's not a far fetched idea, but it's a lousy way of implementing it.

Musicians and filmmakers around the world are supported by tax dollars from the government. Go to any symphony, and you'll see musicians playing music on your dime. Many foreign films (and some indie films) are funded with government support. It's only when you get to pop music and Hollywood studio product that government support stops, because those artists are expected to live and die in the free market just like they have been for years. Aren't we supposed to be looking for new business models?

Rock music is over 50 years old and has become a venerable, cultural institution. There's no reason a non-profit organization can't elicit government grants to support artists playing popular music, or operate venues where these artists can perform without charging $50+ for tickets just like they do for symphony orchestras.

We don't need new taxes for musicians and filmmakers. We just need to start funneling more government money into the arts, which currently receives a piddling of the national budget, and we need organizations that will support the artists in their communities. If we can have public television and public radio, we can have public music and public films too.
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wvhillbilly (profile), 30 Oct 2009 @ 11:40am

Music tax
The RIAA has whined and bellyached for years about filesharing on the Internet, saying it is stealing from artists and composers and what not, deliberately inflating figures about how much money filesharing steals from the above mentioned. A couple of things here.
#1, the RIAA and the record industry keeps the lion's share of whatever profits they make from record sales. The performers, composers, whatever maybe get a few pennies for the sale of each CD which probably costs less than a dollar to make, and typically brings close to $20 a pop retail.
#2, RIAA figures on losses from downloading are enormously inflated. Many of those who download music wouldn't buy the albums even if they couldn't download, so for those there's no real loss. And the RIAA assumption is that each song downloaded means an entire album sale lost. On the other hand, there are people who having downloaded a song to hear it, if they like it will go out and buy the album. So the gains probably offset the losses to where they pretty much balance out.
Further, the RIAA doesn't seem to consider that suing your customers is a good way to alienate them. So they sue the pants off of potential customers, and then wonder why record sales are tanking? Go figure.
I emailed RIAA some years ago suggesting they could make a mint licensing filesharing. Those who wanted to be able to share music with others or download such music could each pay a fee of a few dollars a month, be free to share all the music they wanted to, legally, free from the threat of lawsuits, and the RIAA could potentially bring in enough from filesharing royalties to more than make up for any losses in CD sales. There are millions, as I understand it, who are now illegally engaged in sharing copyrighted music who I believe would gladly pay a few dollars a month to be free of the threat of lawsuits, and the RIAA could be raking in maybe 10s $millions every month they could be distributing to those who make the music, if only they would, and not just stick it in their own pockets.
But I guess the RIAA is too set in its ways to recognize or implement the obvious. As for a music tax, no I don't think that's a good idea. Most of the money would probably end up lining some bureaucrats' pockets.
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Gene Cavanaugh, 30 Oct 2009 @ 1:56pm

Funding art (music, in this case)
If you don't know history, you are doomed to repeat it.

Australia tried funding art (including music) some time ago, and the freeloaders "worked" the system unmercifully, while the quality of art (and music) plummeted.

First, comparing music to automobiles is like comparing fluff to a stone wall. There IS no comparison; music is nice, and I like it, but it is NOT an essential.
Second, if an artist is truly and artist, they will find a way to produce their art. Funding the efforts artificially simply invite people with no talent (or real interest) to jump on the gravy train.
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Anonymous Coward, 30 Oct 2009 @ 2:19pm

Re: No new taxes
"We don't need new taxes for musicians and filmmakers. We just need to start funneling more government money into the arts"

Wow, I just don't see how you can not see the contradiction in your statement.
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Anonymous Coward, 30 Oct 2009 @ 2:27pm

Re: Re: Re: Re: Re: Re: Re: Tax for the inept
I suppose you missed the satire in my posts.
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Anonymous Coward, 30 Oct 2009 @ 4:55pm

Re: NO TAXES PLEASE
I brendan b brown of the band wheatus do NOT support any kind of music tax. If you can't figure out how to make and offer valuable art to people who would be interested in buying it using only paypal then nature has selected you for deletion

What does this mean? There's no future for artists unless they resort to paypal charity?

And I, Trevlac Victor Ehrgeiz, of the band Mystic Slaughterbeast do NOT support music tax either.

Namedropping your no-name garage band does not lend any credence to your view.

Second, if an artist is truly and artist, they will find a way to produce their art.

If an artist can't eat or support their family, they will obviously not have as much time to devote to art. Production, for many, will plummet. This is common sense.

And BTW, I am also not in favor of a music tax.
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chillienet (profile), 31 Oct 2009 @ 12:01am

Re: Buy my music
"Recording industry...please do that!"

Exactly what I thought when I read that.
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