First off, you’re wrong. Music labels are far from extinct. Millions vie to be on a label. ex.: american idol, the grand prize is a record label, and look how many people try to get it. It’s a neccessity if you want to succeed in the business.

Majors labels have the money to market someone, somehting individual labels do not have.

Next, im going to critisize how misinformed you are arrington. there are thousands of employees in the process of making music. it isnt just 1 artist at a mic, there are marketing teams, finance teams, A&R, etc. that need to get paid, and the money must come from somewhere. there will never be free music.

Wow… just when you thought major labels couldn’t get any more slimy.
I guess it doesn’t surprise me. Like the post suggests.. they are facing their imminent extinction… why not swing for the fence.

The sad thing is that this is actually a very convincing argument to anyone who doesn’t know much about how the Internet works (e.g. members of Congress). It could, sadly, gain some traction. However, I believe it is inevitable that it will eventually fail.

This is a case where big business uses its influence and all its power to prevent its own demise. Who — besides these music labels — benefits from this? The already filthy rich executives and artists?

If they force this on people at all, it is a horrible thing. But I love the fact that I pay $5 / month to Yahoo and I can listen to whatever I want.

…
There are thieves in the temple tonight

They don’t care where they kick
Just as long as they hurt u
There are thieves in the temple tonight
…

Ahh…the sweet smell of desperation.

And to throw out some raw meat to the “thousands of music industry employees” argument crowd. Are you needed in 2008?

Does a band need A&R and 25 managers to make a living today?

This isn’t the Casey Kasem era anymore.

Is the success bar for a band being able to do what they enjoy and get paid, maybe make $250,000 year (random number), or is to gross $50 million and pay for a bunch of executive’s trips to Vegas?

wait, Wait, WAIT. i don’t download music. when i want to try new music i borrow a cd from the library. usually that’s when Joshua Bell has a new recording. i don’t even *like* the noise the kids are calling music these days. i don’t think anyone should be allowed to ask for a protection fee unless they’re cool. it doesn’t *have* to be pulp fiction cool, but it probably should. and someone has to be named Muggsy. if there’s no Muggsy, i’m not paying.

This is so disgusting I cannot even write in prose…

Labels need to realize their future will be solely as marketing partners to artists. Labels like Nettwerk get it: they get paid to promote, help record, etc… but the artists keep their rights.

The Internet is water and will always bypass any attempts to dam it up. ISPs are not liable for what happens through their pipes. The precedent here would be staggering - AT&T would be liable for kids calling in threats to their high school because they don’t want to take a test that day.

Socialistic remedies are not the answer… the labels need to innovate, not litigate. (OK - so I got one rhyme in )

@1
thank you.

maybe the old model of charging people for content is not compatible with today’s technology. any industry will fight to keep their lifelines alive, and there is no reason to deny them the opportunity to do so.

in the end, they will adapt. it is not an overnight thing for a label to completely switch over to a viable business model that relies on a relatively new medium of transaction. many labels have contracts with distribution companies that have deals with brick and mortar stores that cannot simply be cut off at the whim of wanting to adapt to new technology.

but it will happen, and there will be different ways to make money off of the content, and people will still pay for it. i’m sure we and your parents are proud that you have a degree in economics, but that does not mean you all of a sudden know how to tell another industry you have no experience in what they are doing wrong and why they need to be like your industry, when the web 2.0 empire has enough problems of it’s own trying to make their VCs money (but apparently not accepting VC money)

Ah America land of the free…

All is always better in the US. No regulations and thus no taxes…

Why are you against this Michael, it wasn’t the socialist governments of Europe that try to impose this, but your darling industry. So it must be good.

They would not get through with in Europe with their socialist rules, where all customers have to be treated equally, and if a company breaks the rule of law, they are actually held to account.

Rhapsody/iTunes/every online company that has built a business around selling music online (and giving a nice cut to the music industry) will be pissed when everyone realizes it’s ‘legal’ to download all the music they want off of file sharing programs. This ‘tax’ will further enforce this mass exodus from paying music services because the consumer will figure they are already paying for a music service that they might as well use (any file sharing program).

The music industry should give paying music services a chance. Unless of course they really are that desperate in which case it would only be natural to see some cannibalism…

Does this include audiobooks? What’ll the audiobook tax cost?…

Does this include movies? What’ll the movie tax cost?…

Does this include tv? What’ll the internet tv tax run?…

PeWi - as long as that company is microsoft, at least.

http://www.tech-exposed.com

Now Major labels want to create a ficticious tax to generate revenue because they’re wanting to squeeze money out of internet users. I dont download music at all. Why should I have to pay something like this if I dont use it????

Congrats Michael: You made Simon Napier-Bell Blog! The oracle of Music!!!

for the record i think the tax is ridiculous.

but @6, yes, they are needed in 2008 as they were in 1998.

no, a band does not need a manager nor a label to play a local coffeeshop nor VFW hall. sometimes, they may even be able to organize a small tour for themselves.

if they are content with that, fine. more power to them.

but the majority of artists themselves are not, and there are only 24 hours in a day, so it is much more efficient if a band can hire someone to route touring, get them P.R., reviews, solicit labels or investors, etc., so the band can find time to write songs and record them.

a couple can do it, like Ani DiFranco, but they are overwhelmingly teh excpetion, not the rule.

and the manager needs to be paid (i dont know where you get the 25 manager thing from, bands only have 1), as does the booking agent, the recording engineer, the producer, the artist who designed the cover artwork, the web designer, their rent, their bills, etc. etc.

and that’s if they distribute everything themselves.

a music label can help a great deal with that, just like a VC helps a great deal in getting a startup off the ground. it’s not hard to understand that.

I pay for my music legally via iTunes. So if the record industry pushed my ISP to tax me, I will then sue them.

Let’s turn the table. This tax has to be as illegal as the people downloading music for free.

Is the movie industry going to do the same when they are losing money? So my tax will then go up to $10. This is all just so ludicrous. Then $5 for any content that people start swapping. I own content sites, do I get a cut of this tax?

Looks like an attempt to get a government bail out to me. I vote we stick with the current strategy — bankrupt the major music labels, then work on a pricing model that is based on market demand, not monopolies.

#1 (bs): Its not like we don’t understand that these are large companies; we simply expect these companies to adapt to technology and compete like everyone else.

This is silly - if this goes through, what stops the movie industry, software industry, etc from going the same route. Eventually every customer is going to be hit with a $50 a month increase. If that is the case, everything should be free for all.

How ridiculous! The music industry really will do anything to try and survive. When they stop trying to fight new technology and start working on a way to collaborate and come up with some new, fresh ideas … oh who am I kidding.

Can someone please stand up to these bozos? ISPs? Artists? Consumers? Anyone?

Sounds like they are trying to take a page out of Canada’s cd tax law. I’d rather have it go to gov’t than some extortion compan.. I mean private enterprise.

I may be in the minority, but I don’t listen to music at all. So I shouldn’t have to pay.

5 bucks a month and I can download as much music as i want and not get sued?

How will itunes stay in the music business?

Sounds good to me.

Whilst I would agree that a music tax as described in this post might be flawed on several levels, I’m not sure that it could be claimed that “the effects on innovation in music would be disastrous if such a scheme were ever to become reality.”

Wouldn’t the fact that music was being paid for in such away pave the way for all sorts of awesome legal music services who then wouldn’t have to rely on cramming as much advertising onto their sites as possible to in order to monetize them, or try to take on iTunes in the paid download market.

@bs

More than anything I believe the American Idol contestants just want fame and money, which for them it could come from labels, fans, etc. as long as it comes to them. As for the need for thousands of employees to make music, that’s true for established artists, but nearly every popular band has started by themselves to create that trademark sound without a label’s help. Looking at Jonathan Coulton and other indie bands out there you can definitely make a very nice living without a label. Many bands sell more copies of their first album than any other of their subsequent albums. For a great discussion about this with the drummer of Weezer check out the latest episode of Mac Break Weekly at: http://twit.tv/mbw

Ignoring all the legal jargon, what you’re saying is if I pay $5 bucks a month I can download anything I want. And this is a bad thing? Sign me up.

Mike, you have 0 knowledge of the music industry … how this would be disastrous for innovation is an ignorant comment.

I agree with Bernie Lomax’s comment above. If it means that I can download any music I want for just $5 a month, then I’m willing to pay for it. Especially if we consider that universities will include this in the tuition cost… What is $5 on top of several hundred dollars? Almost nothing!

The basic concept behind this music tax is eerily reminiscent of The Stamp Act of 1765. That act precipitated the Boston Tea Party … can you all imagine the field day social networks like FaceBook & MySpace will have galvanizing against something like this? Suggesting a tax like this is simply ridiculous. I agree w/you guys @ 14, 17, 18, 19 … and how else can this be interpreted other than an act of pure desperation?

It’s amazing how people survived pre-20th century when there was *no music* to enjoy since we didn’t have the industry to capture what would have been music on some kind of medium and sell the captured version to lots of people.

Oh wait, there *was* music before then? And much of it will continue to be listened to and enjoyed far longer than the last living person to remember our first American Idol winner? Huh, amazing.

When technology means the costs of producing something or performing a service drop to near-zero, the affected industry just needs to *deal* with it. I mean how much support would the postal service have for this kind of arrangement? You know, we can make sure you continue your paper letters get delivered and we promise not to sue you for anything so long as you pay our tax on all the emails you send. Or maybe Xerox could collect a tax on all the people who scan documents electronically instead of photo-copying them.

I realize it must be hard to give up on a nice fat source of revenue after a solid 80 or 90 year run, but many other industries have been dragged kicking and screaming into similar situations over the years. Seems like it’s going to keep on happening. To all the folks working in the record industry, yeah sorry “progress sucks”. Just ask all the folks who used to work in the US electronics manufacturing industry.

haha, that tax will never work.

The chances of getting sued are so tiny, its not worth $5 per month.

$1 per month, maybe.

This is last ditch effort to save a dead business model.

What many people fail to realize is that a very tiny percentage of artists make any money at all from their CDs it is those who least need the RIAA and coporate music that benefit from it.

Artists large or small on a major label get very little from CD sales most profits go to distribution arm, not A&R, not even to sending the execs to tradeshows and price fixing meetings.

While working for a music distribution company that distributed a poplular group’s label’s non-major releases, those releases yielded the artists $2.00 but when the parent of the label decided they wanted to distro the album (they had a contract option) the artist would be lucky to get $0.25/unit but the distributor did no more marketing, got into the same number of stores so they basically just took $1.75 from every album sold. Glad to see the industry cares about their artists.

In addition most companies don’t pay for recording, pressing and printing–they often take it out of the projected sales of the album/piece.

In my opinion it is time for the artists to band together and knock down the distribution model and create marketing co-op and distribute in a way thay consumers are willing to pay for. Otherwise why not give the music away and then tour or charge for other merchandise or ask for donations.

Cheers,

Jay

No matter how you spin it, i would be happy to pay 5 a month to download all the music i want.

Classic music industry bullsh-t. Undercut and kill all the companies who have been trying to work with you in good faith for the last 10 years. Validate all the stealing behavior that has been going on by making it ok as long as you pay the racketeers. Jim Griffin should be ashamed. I remember when he was an advocate of digital music companies…

Is “pay me so I don’t sue you” even legal? I don’t know the relevant law on this issue, but something is definately fishy about it.

If they’re providing a service, than I can understand why they would want to charge. But it sounds like they’re just allowing people to share their own files and the fee allows them to avoid being sued.

That’s like a bootlegger in the 20s paying off a cop to look the other way when the new shipment comes to town.

It will be fitting when these “Labels” cry themselves completely into “Crack Ho” socio-economic status… and then the next “Labels” begin to emerge from within the new organizational model incubating now around them.

Here is a tip for any label-folk who come here for a clue as to what the future thinks about:

The tighter you hold on, the less you will hold on to. Plus, take a look at those leaches you call friends hanging around your own life… what would they do if you stopped feeding them “free music” opportunities?

Open your doors. Dont guard the vault, give it away… the right way.

You have been receiving proposals since 1992 to my knowledge. Napster was the height of your present insanity. Since then you have been drueling on yourselves, hitting your peers, and making a general mess of the apple sauce you are fed by people who love you… for some reason!!!…!!!…

Just free the music already.

And as for the musicians who just dont get it… go easy on them for awhile folks. Artists are a unique breed. This issue should not be an issue that gets them riled up anyway. No fan of good music wants to see starving artists living in boxes on the streets. Fans bring the love… dependably. In mass quantities.

Its the executive minded mob that needs a reformatting.

#1 is right, there is no such thing as free music. You have to pay the piper.

Yes the labels are fat and greedy and deserve their come-uppance. I’m also not suggesting that a record label tax is the right way to go, but all those people who advocate free for all downloading, can they please suggest how artists will get promoted and paid?

some things to consider:

1 - Nearly all artists don’t want to starve for their art
2 - artists need to have a good financial incentive to give up their day-jobs
3 - artists need promotion to make it big

Simple. no rewards and no promotion for artists means a lot less artists.

my stomach queases as what I’m about to type could be misconstrued as an Aye in favor of this “tax” nonsense … however, I disagree with The Sky Is Falling tone of this and this other post.

As is echoed a few times above, if the (music-listening) consumer sees this as “5 bucks and I’ve a right to appropriate all the music I d*rn well please,” for whom is that a bad thing? (*More on that later)

To Michael’s point that this would spell the end of musical creativity - nonsense and shenanigans: there will always be artists compelled to make music. Punto, final. Someone, somewhere will make music and others, elsewhere will seek it out and enjoy it. Crap, plastic “music” created and foisted by the labels based on success algorithms are the likely candidates for extinction in this PayOnePrice scenario.

Michael’s point that the internet is a near-perfect platform for music - not just distribution, but marketing, creation and consumption - is spot-on. If this somehow is enacted, that’d provide more incentive for some artists to move away from the moneyCrack the big labels provide them. There’s tools enough for them to create art and audience on their own. They’ll still have to tour to make the bulk of their revenues.

It’s distasteful, to be sure, but what does it change and who does it harm? This is an actual question - I’m not positing this scenario harms no one as, *the people most likely to get “screwed” are … the artists who create music via the label regime.

Have any ISPs been successfully sued by the RIAA? Regardless, could resources on all sides be freed up if there was such a covenant?

And, if this plan did actually come to fruition, could we please talk the Alcohol, Tobacco and Firearms coalition into something similar? $10 / month for all the booze, smokes and guns I’d want?

“…how this would be disastrous for innovation is an ignorant comment.”

I’d say the ignorance is on your end, for not understanding the problem.

Let’s stretch it a bit, and say that it’s the RIAA labels, and not just Warner, that share in the $5/month tax/extortion fee. Now, take a small label like Cleopatra Records - how do they get a cut?

Figure it out yet? THEY DON’T!

So, the big labels get their $20 billion, and the small labels get nothing. The big labels pull in the revenue, and the small labels are left struggling even more, because it’s damn hard to compete when you have to charge and the BIG competitors are free - because that’s how it will be perceived: free music. And, of course, people WILL copy and share the small label music, all the while thinking it’s fine, because they’re paying their fee.

The big labels, who are definitely not innovators, would dominate even more than they do now, and the small labels - the innovators - would be forced out of business.

Yeah, that doesn’t hurt innovation one bit.

Racket (crime)
A racket is an illegal business, usually run as part of organized crime. Engaging in a racket is called racketeering.

Several forms of racket exist. The best-known is the protection racket, in which criminals demand money from businesses in exchange for the service of “protection” against crimes that the racketeers themselves instigate if unpaid. A second well known example is the numbers racket, a form of illegal lottery.

The term racket comes from the Italian word ricatto (blackmail) and is also used as a pejorative term for legitimate businesses. Typically, this usage is based on the example of the “protection racket” and indicates that the speaker believes that the business is making money by selling a solution to a problem that it created (or that it intentionally allows to continue to exist), specifically so that continuous purchases of the solution are always needed. Example: in a protection racket, a representative from the racket informs a storeowner that a fee of X dollars will be required every month for protection money, though the “protection” that is provided comes in the form of the racket itself not causing damage to the store or its employees.
http://en.wikipedia.org/wiki/Racket_%28crime%29

I can’t believe any of you actually believe that this might happen.

Where would it stop? The MPAA will want in and demand their tax for downloading movies. That’s when the whores move in. Every industry that offers a digital product will want their cut. If the ISPs open these floodgates they will never have control of their prices again.

@10 Pewi,
Actually, this happens a LOT in Europe. In france, flash, hard drives (and other stuff I’m sure) are already taxed “for artists”. Nobody know where the money really goes, the process in incredibly opaque.

the latest proposal is to tax all internet connection (sounds familiar?) and tech gadgetry. You buy a blackberry or a gps? Pay up for the poor music industry.

Don’t idealize Europe too much.

iTunes shows that people will pay when you give them a valuable product at a fair price and make it super-simple.

The industry is missing billions by not opening the doors further. Regarding what “bs” says in an earlier comment about A& R, marketing folks - all the individuals that need to get paid. This is mistaken.

Just as there was unneeded employment in the horse-shoeing and leathering industry when we transitioned to the automobile, there is immense waste in the industry. It is accurate to say that there is no use for a CEO in the current configuration and likely 75% of the workforce in that sector.

Alternatively, think of things is business terms: Labels provide financing to cover marketing & production expenses.

How many succesful businesses do you know that have never taken debt or capital injections? Very few.

(as a side note every second story on TC is about the latest startup raising debt or equity - the same sotry except swap “VC” for “label”)

Labels also have themselves to blame for declining year on year revenues wholly unrelated to piracy - eg CD replacement for vinyl won’t recur, golden oldies are getting old, etc. But they still do provide a necessary function….

$12,956,131,740 per year per U.S. internet usage stats (assuming all those Dec 2007 U.S. internet users had their own ISP accounts).

Too lazy to look up the “per year” take by the music industry.

Hmm.

Oh, and Google “RIAA” and the first entry (for riaa.com) gets you this description:

“Trade group that claims to represent the US recording industry. Details on services, members, executives profiles, statistics, and contact information.”

How did that “claims to represent” get in there!?

Double hmm.

Harry “yet to be sued by the RIAA” Wang

#17 - good point - who gets the money and how? Same as in the EU with the Microsoft ATM withdrawals.

I will not pay my ISP $5.00 to avoid liability if I am not pirating. This is BS, pure and simple. Not sure it they thought this through, but if people pay the ISP, who pays the label off for no liability (by default extending it to it’s customers), I have a strong feeling this will bit the music industry in the ass in terms of controlling piracy.

If they do this, they could very start the beginning of their end.

The label itself isn’t defunct, but suing your customers almost wholesale or extorting money from them regardless is just Not an effective business tactic. Eventually everyone wakes up and goes “What the Hell is this?”

@Sylvester
some things to consider:

1 - Nearly all artists don’t want to starve for their art
2 - artists need to have a good financial incentive to give up their day-jobs
3 - artists need promotion to make it big

Simple. no rewards and no promotion for artists means a lot less artists.

1. Most artists start making music to make music and the best artists can survive. I have known many musicians and have played in a band (that wasn’t very good so we gave up)
2. But how much money is that? I don’t imagine that 99% of musicians make more than 50, 000USD/year. If you are doing a gig a week at $2000/show that is pretty good.
3. Sure but big != talent. Ron Sexmith is not big but he is sure talented (yes he is on a major label) I also don’t think he is rich either.

To the last part “Simple. no rewards and no promotion for artists means a lot less artists.” On the contrary, just less record execs seeking a piece of he pie. See my point 1. Do you seriously think that people become musicians to make money? I certainly see corporate execs going to the music industry from others because the profits and perks are huge for them. (Can you say contract feudalism?).

Seriosly, I want artists to get paid but maybe the songs are not the profit centers of their business any more. Maybe performance, persona and product is where they can make their money.

The song/album disrtibution model doesn’t benefit the musicians as much as the rec cos who think to themselves how can we milk this one even more?

Wow. The part I still struggle with the most is that an ISP is responsible for what people do with their bandwith. That’s like me getting a speeding ticket and suing the government because they let me drive on their roads. Or the electric company being responsible for people using microwave ovens to cook crack since they are using “bandwith”. Geez….

First off, you’re wrong. Music labels are far from extinct. Millions vie to be on a label. ex.: american idol, the grand prize is a record label, and look how many people try to get it. It’s a neccessity if you want to succeed in the business.

*****

I disagree case in point how many of those idols have really been successful. It’s not about the recoding contract ut the exposure from the TV show. A record label is not the end all be all that it once use to be. Distribution models of music and marketing has changed A LOT! There are some artist who make $30K a year and have nothing to show for their careers nor do they own any of their music.

Well, first of all, I don’t think it’s right to force the cost on all consumers. The music labels definitely need to move into the future and find better distribution models in the age of the internet.

That said - I wholeheartedly disagree with the whole ‘protection racket’ comparison. A protection scheme is illegal because you’re forcing people to pay you so that you don’t do something illegal to them (like burn down their store, etc.)

In this case, like it or not, those downloading music for free are engaging in an illegal activity - and, in my opinion, showing a lack of respect for the artist and those involved in making the music they are enjoying.

From the music industry’s perspective, ISPs getting forced to pay like this would be more equivalent to bombing an entire country because they harbor terrorists. Whether it is right or wrong is something people will argue, but it isn’t a protection racket.

The music industry needs to get over the fact that they can’t have the full control and power they once did over distribution. Free downloaders need to acknowledge that it costs money to make records, and all those in the recording industry deserved to get paid for doing their jobs.

I’m sorry to say this is the music theft community reaping what they’ve sown. If you don’t believe that copyright enforcement of feasible and/or ethical, if you believe in the “marginal cost approaching zero” argument entitles you to free access, then this is going to be the end result. The idea that the media industry is just going to roll over and die isn’t just wishful thinking, it’s delusional. Every argument for why the RIAA is wrong or music labels are obsolete can be used by these entities to strengthen their cases for new laws in Congress, in individual lawsuits, and in proving their worth to their current and future artist clients, because all you’re doing is perpetuating the legitimate perception of the internet community as being hostile to the rights of artists and copyright holders. I fully expect to see an media industry lawyer citing posts like this in a testimony before Congress to prove that their point that the Internet community has no respect for copyright law and that extraordinary enforcement and taxation are necessary to protect American businesses.

How do we know we’re not paying those $5 already?
In any case, sure, it’s just $5, and download away, it will be total mayhem for themselves, they’ll make $20bn and recover and even earn more from their deficit, but the rise in piracy will be like no other if they say go… omg, so much music will be available.

If anything, I bet iTunes will oppose to this, but p2p companies will be super happy.

” If it means that I can download any music I want for just $5 a month, then I’m willing to pay for it. Especially if we consider that universities will include this in the tuition cost… What is $5 on top of several hundred dollars? Almost nothing!”

1. I don’t DL music, I either stream it or buy used CDs. So I don’t want to pay $60 a year for something I get no benefit from. Yet I am forced to go along. This is like the idea of adding a tax to iPods that Canada (I think) proposed at one time. It is extortion forced on those of us who don’t need the protection.

2. Oh you poor sucker. You buy into this and each media company will then want $5–to start. Then of course the price will go up. Look at the cable companies for an idea of how the subscription fees will rise.

I respect Jim Griffin and the work he’s done in the past. Hearing from him at this year’s Digital Music Conference gave me the impression that he’s looking out for the music industry overall. Yet, this tax is bogus and plain dumb. I’d be very interested to hear what his good friend Michael Robertson (of mp3.com fame) would say to all of this if true.

Michael, I believe your choice of words (”imminent extinction”) were a bit strong, but not unwarranted. The Big 4 have been struggling mightily over the last couple years. Until they finally come to grips with The Digital Age and how to monetize it, they will continue to suffer. As we discussed at the Digital Music Conference I attended last month, the major record labels will become more like major marketing labels if they want to stay afloat.

I haven’t read all the comments but the arguments made in #1 have many holes. Particularly, the record labels being “a neccessity if you want to succeed in the business.” I laughed out loud at that comment. First, define success. I know plenty of bands that are doing PLENTY fine without a major record deal. As I alluded to before, the major record labels are not nearly what they used to be and they will never be again. And that’s a beautiful thing..

#38: I understand your point, but the fact is people are downloading millions of copies of Flo-Rida not the fucking Spits. I’m surely not worried about the little guy (ignorance yes)…

Secondly, there are no details as to how they will distribute that $5 (between artists/labels) yet, the little guys may actually get a cut. Is that so wrong to assume?

As #40 says, never going to happen so whatever. I just hate the fact that Mike comments as if he knows what the fuck is going on in every industry.

What if you don’t pay the tax…Will they sue you for $60 dollars?

hehe

What incentive does the ISP have for agreeing to this model? Simply to avoid a large lawsuit for the illegal downloads of its subscribers? Are they even accountable for the actions of their subscribers?

What happens when other labels do the same. How about a tiny independent label demanding $10 a month? Where does it stop?

What can prevent the $5 from increasing? What rules will govern this?

At the end of the day, today, the source of most music still comes from the big record labels. Most music files that people download via bit torrent still comes from the studios at the major record labels. Also, if an artist is to become big, they will most likely need to be signed with the major labels and not just to put their video on you tube. You tube will get them started but the money will come in only after they sign.

No matter how we say that the record labels are gonna collapse, this is still the reality and will probably be like that for a while.

The RIAA may promise not to sue, but ASCAP (and everybody else) can still sue you!!

The record labels own the copyrights on the sound recordings but they often only license the rights to the composition and lyrics–so any promise by the RIAA not to sue doesn’t include ASCAP/BMI or anyone else who owns music copyrights, and even to the extent it did cover sound recordings it would only cover RIAA owned songs.

An RIAA music tax would just be the first step to every copyright holder–other music copyright owners, tv, film, print owners (the list is endless)–coming to demand a “copyright tax” for themselves. A private tax ain’t going to protect people and it ain’t going to work.

I always check for the articles you write, because you seem to have a nice way to put things in perspective. Although, you seem to be a little off when you write about musicians. We’re not at all happy with the schemes the industry creates. Take the US$5 music tax for example, do you really think that any artist will make any decent money off of it?
Everybody is quick to say that musicians are better off promoting their music on the internet, that we’re gonna make more money (to cover the costs of recording music independently) with licensing for movies and TV… Wait! Who controls the licensing biz and has ties with TV channels and studios? So you see, we’re far from making the kind of money you think we’re making. If you’re U2, then maybe you’re getting $1, 80 per unit sold… And every label is renegociating their contracts to make sure the artist gets even less per unit sold as of now. “Oh, we don’t recoup money on CDs anymore!”, yet we pay for partial costs, promotional CDs, only the big ones will acknowledge tour support, so I find it interesting that you see us as the crazy ones. You don’t write for free, do you Michael? This is something you love, right? Why should musicians not get paid for what they do?

I can see why they would propose such a tax, but it would have to mandatory or none at all. I can understand why they would try to get it done. Just think of how many people use limewire or a torrent program to download music. They are loosing money, but even so I don’t think its enough where they are going to fall.

The arguments that this fee stifles innovation or punishes independent artists couldn’t be more false.

First, the incentive to innovate is clearly there - the better you are, the bigger piece of the pie you get. Not only that, this is only one portion of overall music revenues - there is still a lot of money to be had by innovative artists through touring, merchandise, endorsements, lyrics, remnant music sales, etc. etc. etc. There’s a reason why most record deals are moving to the 360 style - there’s money to be had there, and it isn’t going to disappear because of a $5/month fee.

Second, indie artists should look at this as a HUGE boon to their wallets. Why? Because a) they’re going to get their share, b) They’re going to get paid the SAME amount as artists on major labels (in reality, they’ll actually get a lot MORE since they won’t have the overhead), and c) it will likely INCREASE the market size, making MORE money available to indies. How many people have heard a sob story about an indie artist whose track has been downloaded a million times through P2P but they’ve got nothing for it? With this structure, now they WILL, and it won’t be a meaningless sum, either.

Unfortunately, most people writing or commenting here don’t understand the details of the plan or the intricacies of the industry. This has nothing to do with the majors salvaging their business; this is a plan that does not favour major label content over any other content (unlike most (read: all) licensing deals today).

While there are a lot of potential issues with this plan (which can likely be overcome), the ones being argued about here are NOT ones to be concerned about.

Second, indie artists should look at this as a HUGE boon to their wallets. Why? Because a) they’re going to get their share, b) They’re going to get paid the SAME amount as artists on major labels

The devil is in the details. And in this case, the devil is writing the details. Do you really think the RIAA will author a plan that gives indies a HUGE boon? Not on your life. This plan is the RIAA life support plan, not the RIAA gives away money to indies plan.

Here is a handful of Jungle / Drum & Bass Labels that won’t make squat from a tax like this. Mind you this is only a small list from one Genre…

The big labels can all die a slow painful death…

Virus
Valve
V Recordings
True Playaz
Suburban Base
Renegade
Ram
Moving Shadow
Movement
Metalheadz
Hospital
Good Looking
Ganja
Full Cycle
Frequency
Freak
Formation
Eastside
Dubwize
Dispatch
Creative Source
Commercial Suicide
Citrus
CIA
Breakbeat Kaos
Bingo
Barcode
Advanced
31 Records

Stan,

The RIAA is not authoring this plan.

I repeat: The RIAA is NOT authoring this plan. The intent is to form an independent entity to administer the pool that is not controlled by Warner, or other labels.

And if there’s one person you can count on to divide things up fairly and not shaft the indies, it’s Jim Griffin. (OK, and Derek Sivers. But he was busy.)

Jim has been arguing for this for a LONG time, often AGAINST the labels and RIAA. In a sense, you could say this his hiring signals that the labels (at least Warner, at this point) are bowing to JIM’S views, not the other way around.

After tax money to help Agriculture, Car Industry, Military Industry, Aircraft Industry, Finance Industry, now tax money to help the Music industry ?

Damn, I am still in the wrong business !

The good news though is that right after gov help one industry, it usually kills the innovation and make things even worse.

Another tax. What a punch of idiots to think like this!

Daryl,

The plan is being pushed by Warner Music, one of the four RIAA music cartel members. It is a Big Music Industry / RIAA plan. Warner has hired Jim Griffin to create a collection entity. If you think Warner is going to *pay* Jim Griffin to put together a plan that puts indies at an advantage over Warner and RIAA members you are incredibly naive.

Wow, the Recording Industry just performed public Seppuku with this. I as a long time hater of Big Media couldn’t have orchestrated their demise any better!

Goodbye you bunch of crooks, all the artists and all us Consumers you have exploited over the years will not miss you at all!

To Mark who mentioned CD tax in Canada.

That is VERY different from what WB is proposing. People who DON’T buy blank CD’s are NOT forced to pay an extra tax. That puts the choice in MY hands.
If I buy a blank CD or DVD an extra tax is imposed which goes to musicians directly NOT to Record companies,and thats okay. But I have no Choice when it comes to needing my local ISP services to access the net. I need to use the NET for work, so now I m going to be forced to pay an extra $5.00 A MONTH when I DIDN’T BREAK ANY LAWS, and when I don’t download music FULL STOP.

THIS IS EXTORTION and every ISP should stand up to these thugs and say NO, we will NOT tolerate extortion.

Daryl I don’t care that tthe RIAA is not authoring this extortion, they are still endorsing it - this is EXTORTION. I worked for years at Polygram Records, I know the intricacies of this extortion gambit, I know the biz very well.

Your biases are showing - you stand to gain from this - so either you work for Big Labels or your a musician who thinks he’s gonna make a bundle off extorting money from people who have done nothing wrong.

Let WB open a fee based website, and charge those who so choose to download the shit they pass off for music, a monthly $5.oo.

America is supposed to be the land of personal freedoms and rights..musicians lead the clarion call for individual rights, berating the admin for screwing around with our freedoms, but NOW THEY want to f**k individuals over, now they don’t care about individual freedoms and rights.

With ITUNES I get to chose the songs I want, and pay a fair price, that is the American way - its about CHOICE - not being forced to pay a tax for something I don’t buy and not being punished for criminal acts I took NO part in.

Stan,

The plan doesn’t give indies an advantage over majors. It makes them equal - a download is a download.

Make no mistake, in absolute dollars, the majors stand to gain much more since they have the largest market share. But the indies, at least on a per-share basis, will be on equal footing.

It’s also important to note