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Unbiased Digest about Music Industry

7 votes

1 December 2006, 02:31

Universal tries to negotiate an 'iPod tax'

Labels try new ways to get the money they believe are getting lost due to piracy and carelessness of consumers. New idea is that it might be easier to tax consumers when they buy an MP3 player rather then hope they will stay away from peering.

News leaked out this week that Universal Music Group tries to negotiate a royalty fee for every iPod sold.

Universal has already succeeded in doing so for Zune players produced by Microsoft. Assumingly the label will receive $1 for every $250 of Zune sales.

Consumers will pay even if they will never listen to Universal’s music on their players. Actually many developed countries do have some kind of copyright levy or a tax on blank media such as CDs or memory devices like MP3 players. Consumers have to pay it even if they are going to use a blank CD to record their own song or home video.


Read more:

Universal 'negotiating with Apple on iPod tax', Silicon.com
Universal Music may seek royalty deal with iPod, Reuters
Microsoft Universal deal sure to be challenged, The Register
Private copying levy (blank media tax or levy), Wikipedia
Spain Adds 'Copyright Tax' to Blank Media, Zeropaid

Comments 22

1. by TheAnt, 1 December 2006, 03:38

Personally, I think this is a good idea. I'd much rather pay a small one time fee on an MP3 player than be criminally charged for peering.

2. by Corey, 1 December 2006, 08:11

The "creative music industry" has run out of "creative ways" to generate revenue? Maybe they should reconsider the cost of buying a CD at a retail store? Make it more attractive to a customer to pay $18 US for a CD?

Just thinking outside the box..

And no, I won't like paying $1 for each iPod (or mp3 player) purchase. It's the principal.

3. by Lu, 1 December 2006, 16:40

I agree with TheAnt. A tax, provided it is reasonable, is definitely preferable to criminal charges and fines. That said, I think that downloadable music should be restricted to sites like AllofMP3 and similar, so that some form of quality control is ensured.

4. by anon, 1 December 2006, 17:18

Universal has precisely jack to do with my media content. I dont see how they can justify this

5. by Common Sense, 1 December 2006, 18:35

Anyone who accepts this tax has been brainwashed by the government or in this case a company ( Accepting it as right, cause I know theres really nothing anyone can do about it anyway ). All this is, is taxing tax itself and has nothing to do with their profit losses but rather taking every dime they possible can from willingful people. You pay taxes on ur blank discs ( the company who distributes the blank discs also pays tax for it as well as the companies that actually make the product ) What you have is by the time you recieve the product nearly 5 taxes have went to the government and that gets past on to the consumer. Of course The government will love such a tax from a company, They will tax tax!

6. by Gabriel, 2 December 2006, 06:49

I think I would like to levy a tax on media players as well, because I think I should have the money. Besides, perhaps one day I might record something that someone might decide to share on the internet. Sound absurd? Exactly. That is what is wrong with a media tax. It violates a natural human right, a valuable freedom. Yes it is below other natural rights, such as freedom to worship, but it violates freedom of speech, since small artists who burn their own cd's are encumbered by a tax which limits their ability to produce their work and gives money to their larger competitors. It also violates the principle that taxes are to serve the nation and the people. This tax is instead a mandatory subsidy to a large business. Imagine if the gas tax that we pay (I'm sure they have one in Europe too) went to the oil companies... People would scream bloody murder. Anyways, in the US, if such a tax were imposed on media and players, it would warrant protest and revolt (in the form of civil disobedience of course, bloodshed would be too extreme for human rights violations of this type). Don't think I am crazy, read the thoughts of the founding fathers of the US. (of course, here in the US, we have a Supreme Court that makes unconstitutional rulings (eminent domain for private interests and greed, completely against the constitution, even a fool would know that).

7. by Deuceduce, 3 December 2006, 12:02

The REAL issue here is that the prices of CD's are not competetive. In economics, the market price of goods are determined by supply and demand (am I taking you back to high school economics class yet?). Yet the record industry, instead of taking a proactive stance to help bolster demand by, gee, possibly lowering prices on CD's?! and increasing demand, has decided to bite the hand that feeds them, me, and shoot for a tax. They have decided that everyone feels $18, if you live in large city USA, is completely acceptable for a CD. In most industries, if the price is too high, competition weeds out the weeds. Not in the recording industry.

Bottom line is that peering is really inconvenient for most people. Who has the time to sit and find real, high quality copy of a song online? There is an opportunity to really make some honest money on CD sales, but instead they're trying to resort to another great american pastime - TAX. Anyone with an ounce of business sense can see the opportunity they have, and they instead are tugging on mommies skirt for help.

8. by benaroia, 3 December 2006, 22:17

"In other news, Russia has agreed to close controversial Russian download service AllofMP3.com, which allowed users to buy full albums for around £1. It claimed it did not breach copyright legislation but had drawn fire from the UK music industry for not sharing its revenues with the artists whose music it sells."
This is found a little ways down on the silicon.com site mentioned above on this page. Is AllOfMp3 shutting down?

9. by Fred, 4 December 2006, 02:07

Why is the recording industry wanting to tax us.It is no money in their pockets It is my inderstanding a tax is paid to the government.Am I wrong, or are these guys going to pocket the money they collect?NOW that IS illegal.Or are they calling it a tax thinking we will exept it under the pretence we will just blame it on someone else.

10. by AJ, 4 December 2006, 07:04

When an artist signs a contract with a recording company, they basically sign over the rights to their music to that company. The recording company pays a fee, a very small fee, for each CD produced to the RIAA to be distributed to the artist. All other money (other than production costs & promotion) is profit for the record company, its distributors and sales outlets.

The RIAA is supposed to protect the artists' rights, but remember, they get a cut, too. Millions of dollars have gone into politicians' coffers so they pass laws protecting this income.

Is it any wonder they are using their greed to find more money? And the poor artists still get very little cash.

11. by jb, 4 December 2006, 23:41

Fine; whatever they want! But if we pay a "copy-fee" on an mp3-player we automatically assume that it is Ok to copy music illegally; we did pay for it! It is one thing or the other, but not both!

12. by Anonymous, 5 December 2006, 07:57

I Disagree with this tax for all the reason above, What next, Un-DRM-able players, )players that cost the same, but can only play music form a particular store and nothing else).

13. by Juan Zapatista, 5 December 2006, 12:18

extortion and theft, they are gangsters, no better than Al Capone.

14. by NAX, 6 December 2006, 00:37

"but can only play music form a particular store and nothing else)."

ZUNE/iPod any1?

15. by DrLex, 6 December 2006, 04:42

This tax is rubbish. In Belgium there are many taxes like this. We pay taxes on tapes, blank CDR's and other media, but it's still illegal to copy music. Paying this tax doesn't give you any rights to copy music, it's just an attempt to give the idiots from the music industry the money they think they lose to piracy. In some way it's just theft, because people who want to record their own music or speech or whatever, pay this tax to a record company which doesn't have anything to do with that recording.

16. by J, 7 December 2006, 10:53

@Nax

you got it backwards. you can import any non drm'ed music to play on ipod/zune. You just have to use their software to do it, But if you want to purchase from their store it will only work on that device. Seems fair to me. Allofmp3 is better anyway. I still use itunes to store it and put it on my ipod.

17. by tixe, 7 December 2006, 21:41

and the biggest winner is the one that already got the money not the small labels...

18. by Original Sin, 9 December 2006, 19:01

I have no qualms about piracy when the record labels try to pull of stunts like this. Imagine if Shell or BP decided to levy a car tax if the car runs on dual-fuel, because of lost revenue.

19. by tony, 10 December 2006, 22:56

...if the big music companies took a lesson from sites like allofmp3!!! i'm very happy to pay a reasonable ammount instead of downloading for free- but i wont be ripped-off, i'll simply not buy their music at all!

20. by sk8rpro, 13 December 2006, 06:20

What's with all the fuss over a $1 tax? Is all that is being done is having a whole bunch of energy stored up over something small? Yes it's the principle of the thing, but think about it, a dollar's not worth fussing over.

21. by j, 17 December 2006, 10:21

this is directed toward sk8rpro. A dollar may be that big of a deal, but that is what the companies count on. They say oh the consumer won't care about a dollar, but then once the tax is implemented, it is much easier for them to jack up the cost later.

22. by pradeep, 29 May 2007, 13:54

My friends iPod wasnt working and making that clicking sound. We wanted to go through the five Rs on the Apple website but the iPod wasnt even being recognised by the computer. I was considering replacing the hard drive for him, and then we figured on trying the spanking method. It worked! Thanks to everyone!

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