Sunday, May 15, 2011

Canada is Becoming a Police State for the Recording Industry

Here is a bit from an excellent post by Michael Geist:
Canadians currently pay levies on blank CDs (and cassettes) and now the Canadian Private Copying Collective (the front for the RIAA in Canada), which collects the private copying revenues, would like to establish a new levy on blank memory cards used in a wide range of devices such as smartphones and digital cameras.

As Howard Knopf notes, the CPCC has just filed for the following levy:

50¢ for each electronic memory card with 1 gigabyte of memory or less, $1.00 for each electronic memory card with more than one gigabyte of memory but less than 8 gigabytes of memory, and $3.00 for each electronic memory card with 8 gigabytes of memory or more

The financial impact of the levy would be significant. A 2GB SD card currently sells for about $6.00 and this would add an additional dollar or almost 15% to the cost. Given that the levy would remain static (or even increase) but the costs of SD cards are dropping by roughly 30% annually, the percentage of levy in the overall cost would likely gradually increase over time. Moreover, music plays a small role in the use of memory cards. A recent report indicates that digital cameras are the primary market for SD cards with smartphones the second biggest (and fastest growing) market. Music is a small part of the equation, yet the CPCC is demanding payment for every memory card sold in Canada regardless of its intended or actual use.
The Americans in 1776 had a revolution over "taxation without representation". But in 2011 we have "taxation on intention". This industry front, CPCC, somehow sniffs the air and "discovers" a consumer's intention and taxes that intention whether or not the consumer even had, has, or will ever have that intention. I might as well tax everybody in Ottawa $100/year because I "perceive" that they intend to camp in my front yard whether they know it or not.

What happened to the good old days when you were taxed to enforce "property rights" based on the actual use of the property. Since when have government become a police state to enforce "property rights" defined by industry and based on no actual use of real property just the supposition that there might be a use by someone, sometime, somewhere.

The problem in Canada is that the industry is more than eager to "collect royalties" and these "taxes" on behalf of the artists, but somehow this money never makes it to the artists' hands. From an article in the Toronto Star:
In 2008, the estate of American jazz great Chet Baker launched the suit claiming the labels — EMI Music Canada Inc., Sony Music Entertainment Canada Inc., Universal Music Canada Inc. and Warner Music Canada Co. — had not paid the proper royalties for music on the industry's so-called pending list.

The hundreds of thousands of works on that list were released before royalties were arranged, with the expectation that the paperwork and payments would eventually follow.

At the time the statement of claim was filed, the plaintiffs alleged more than 300,000 titles were on the pending list with $50 million in unpaid royalties outstanding.
From an article by Michael Oliveira of The Canadian Press:
As of March 31, 2010, Universal owed almost $16.4 million in outstanding payments for music recordings and $5.5 million in video royalties for releases prior to Dec. 31, 2009. Sony owed almost $13.6 million in music royalties and $3.7 million in video royalties; EMG owed almost $8.1 million in music royalties; and Warner owed almost $5.5 million for music royalties and $2.1 million for video royalties.
So... in Canada you have the best of all possible worlds. You get to turn the state into your own private Mafia extortioners, you get to collect monies for "intended use" or actual use, and then you never give the money to the people on whose behalf you supposedly collected the money!

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