Original URL: http://www.theregister.co.uk/2008/07/29/who_wants_a_music_tax/

Who wants a music tax?

This blanket is no comfort

By Andrew Orlowski

Posted in Media, 29th July 2008 11:02 GMT

In Pynchon's Gravity's Rainbow, set in WW2 London, a character called Slothrop begins to realize that everywhere he has sex, a V2 rocket subsequently lands on the same spot, obliterating the area. If you dig a little, you may notice something spookily similar with the idea of a Music Tax in the media.

Back in March, talk of a Music Tax suddenly exploded at the SxSW music conference in Austin. WiReD's blog ran a story by Frank Rose, entitled Music Industry Proposes a Piracy Surcharge on ISPs.

"[The] idea is to collect a fee from internet service providers - something like $5 per user per month - and put it into a pool that would be used to compensate songwriters, performers, publishers and music labels." Apparently this was the brainwave of Jim Griffin, a collective licensing advocate hired by Warners to think the unthinkable. Here's an interview with him from 2004, where he dismisses the idea that collective license should be compulsory, should penalise non-participants, or be imposed by the government. "Government has an after the fact role, as it does with Antitrust legislation. The arguments should be voluntary," he said then, and sources indicated he hadn't changed his mind.

A pool, yes, but not a tax.

Coincidentally, the International Music Managers' Forum happened to be meeting in Austin, and its former head (and now Emeritus President) Peter Jenner was quoted in the article.

Last week, another screaming came across the sky, and another Tax Bomb fell to earth, this time in London.

"Should the music industry tax you to use the Web?" asked CNET. "Leave it to our friends across the pond to come up with a creative, tax-heavy way of punishing music downloaders," wrote Brian Heater at PC Magazine, who continued - "Culture Secretary Andy Burnham is proposing yearly fees of £20 to £30, which would be imposed by ISPs."

Both drew on an article in the Independent. While the rest of the British media gorged on the Memorandum of Understanding between major ISPs and the music business, and the Business Department's proposals on file sharing, the Indie alone had an unusual bit of news everyone else had missed.

"Music industry to tax downloaders (£30 'licence fee' set to revolutionise illegal file-sharing)", the paper's Nigel Morris reported.

"Peter Jenner, a veteran music industry figure who now manages the singer Billy Bragg, who has championed the plan for an annual charge, said last night that the idea was attracting growing support," claimed Morris. "He said the cash raised by including the top-up in the fees paid to ISPs could match the current £1.2bn turnover of the British record industry. Mr Jenner said: 'If you get enough people paying a small enough amount of money you can turn around the wheels of the music industry.' "

So was Jenner our man? It looked like every time Peter talked to the media, a story about a Music Tax exploded a few days later. But it only seemed fair to ask the lad himself.

Bombshell

Jenner denied planting the story - the Indie had called him, he told us, not the other way around.

And so where did the reporter get the idea that the Music Tax would be £30 a year?

"That came from my calculations that if everybody paid £2 a month, then you get the size of the record business today."

Right. So it's a tax, then?

"It's a tax in the same sense that when you get on a bus, you pay a fare. If you don't, then tough shit, you get thrown off the bus."

That sounds like a tax - and compulsory. Is that fair if people don't want music, or want to acquire it by some other means?

"My taxes pay for the war in Iraq, I don't agree with that, but I pay my taxes."

Taxes were originally invented so states could go to war, it's true. Today taxes pay for health provision and infrastructure. But music isn't really the same as going to war, or paying for health is it, Pete?

"I disagree - listening to music has a very therapeutic value. If 90 per cent of people who have a broadband connection pay for access to music, why don't we assume 100 per cent do, and charge everyone a small fee?"

Er, because they don't want to?

Maybe I'd missed something. I decided to ask around to see whether anyone else in the British music business secretly wants a "100 per cent bus fare" on broadband, but is just too shy to say so.

Semantics are important here. In conversations about copyright reform, and new forms of licensing, you'll hear phrases such as "pool of money" or a "charge" to "access music". But neither - and this a crucial point - necessarily involves an annual blanket charge, like the BBC license fee, or Pete's Music Tax.

What Griffin calls an "actuarial model" for music simply involves people agreeing to paying into a pool - like the original Lloyds insurers. No compulsion to take part there, if you don't want to. And eMusic is an "access to music" charge - otherwise known as a subscription - which doesn't involve compulsion either.

So who wants a tax? Here's what I found.

Where did all the support go?

There are various degrees of support for Griffin's collective licensing principle, and for record companies to relax the exclusive right on copying in particular circumstances. This has already happened with the licensing of catalogs to QTrax, the ad-supported service which has a P2P element, and PlayLouder MSP. But I found no enthusiasm and in many places some very strong hostility to the idea of a Music Tax. I couldn't find anyone who didn't prefer voluntary arrangements. In most cases, vehemently so. And the rate at which punters may "access" music should be considerably higher than 50p week - particularly if they were getting something new, such as legal P2P.

Opposition to a Music Tax from the music business is grounded in different objections, I discovered.

The major record companies, represented in the UK by the BPI, neither support a music tax nor see it as feasible. They have historically objected to a tax because it fixes a price for music. So what about their historical antagonists - the publishers and songwriters?

They object for the same reason - as it sets the size of the market. Like the major labels, they prefer to let consumer demand sort it out, rather than backroom arm-wrestling with a quango. (Parts of the music industry here have spent millions on legal fights already with the UK Copyright Tribunal).

In an interview with Digital Music News, BMR's Feargal Sharkey explains why he thinks it's a terrible idea. (BMR represents publishers and songwriters.)

"There's not an awful lot of money, which then has to be divided up. And anytime you want to grow the industry, you have to lobby the government to increase the levies. It's a mind-boggling way to run an industry."

Publishers and composers have a specific reason to object, too. They're anxious that what they perceive as an unfair royalty split today would be set in stone. A piece of recorded music has two copyrights associated with it: The sound recording and the composition. Today, this still reflects the production costs of making, distributing and promoting physical recordings, and so it heavily favours the recording owner at the expense of the composer. At its most generous, the ratio is about 85:15. Many publishers can't see why it can't be 50:50. And with the traditional record label model dissolving, investment may in the future follow the creator (and his publisher), not the label.

I cast around further. How about the indies, then? The independent sector, as AIM's Alison Wenham explains, doesn't want a Music Tax either.

"I don't agree with Pete Jenner's view for a blanket license. You can't tax people for something they don't use, when it's a leisure activity," she told us earlier this year.

"And where will it stop – TV, film? Everybody would want some. So either that two Euros becomes horribly diluted, or it becomes 10 Euros and you've taxed everybody for stuff they don't use, and you've negated the purpose of the exercise."

(Ominously for some, the Hollywood's lobby group the Motion Picture Association of America was one of the signatories of last week's MoU.)

In fact, I couldn't find anyone apart from Pete Jenner to speak up for a blanket. And at various points, even Pete sounded like he didn't want a tax, either.

"No Government will bring in a tax. It's an Access to music charge and it has to be introduced on a voluntary negotiated basis," he said.

"We live in society; you don't choose anything and everything that happens. If you say to me it's likely there'll be a tax charged by the government that's compulsory, I'll say it seems unlikely."

Yet Jenner clearly favours a low rate "blanket", where if you don't pay it, you will be coerced into a severely limited broadband service - where "services are slow or blocked off and don't give you much more than email," in Pete's own words.

Tax or no tax? I felt as if Heiseinberg's uncertainty principle was at work. A tax was raised, but as soon as it was examined, it changed form - morphing, rhetorically, into a "voluntary" arrangement. Round, and round, and round we went.

Even after this year's Kristiansand Summit, where Informa's Music And Copyright newsletter erroneously reported that attendees expressed a "consensus" for a Jenner-style blanket, I still find support is scant to non-existent. And since everyone else favours a voluntary (and higher) subscription-style access charge for music, I still can't understand why this Tax Bomb keeps going off.

Some people like playing with explosives, I guess, even when it blows everybody up. ®