iPod tax supported by groups that would receive money

Copyright holders’ groups have been quick to support extension of a levy that would raise the price of mp3 players sold in Canada and see more money flow into their coffers.

The Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), the American Federation of Musicians in Canada (AFM Canada), the Society of Composers, Authors and Music Publishers of Canada (SOCAN), and the Canadian Independent Music Association (CIMA) all confirmed their support in interviews with ITBusiness.ca.

Each group represents music copyright holders in Canada, and each has some stake in funds collected by the Canadian Private Copying Collective (CPCC).

The call for an “iPod tax” came from two different places in the federal government last week.

NDP digital affairs critic Charlie Angus introduced a private member’s bill, C-499, asking for the current levy — currently applied to blank CD-Rs and audiocassettes — to also include digital audio recording devices. Also, Bloc Quebecois MP Carole Lavallée put forward a similar motion at a committee meeting, where it was passed.

Copyright holders groups described the levy as a way to compensate musicians for the copies made of their songs when consumers load a CD they purchased onto an iPod.

“The money has been a critical source of revenue to our artists since it was instated,” says Stephen Waddell, national executive director of ACTRA. “It will continue to benefit musicians for use of their work copied onto mp3 players.”

ACTRA represents 21,000 artists across Canada and receives money from the CPCC for distribution among copyright holders.

The levy has been in place since 1998 and has enabled CPCC to distribute $180 million to more than 97,000 artists, according to the Collective – an average of about $180 per artist per year. The amount given to each artist is based on record sales and radio air time.

“It could be a significant sum of money to an individual artist who otherwise wouldn’t see money for the use of their product,” Waddell says.

But Mike Smith, bass player with Canadian rock group The Organ Thieves has never seen one red cent of levy money. His previous band, Summer Hero, sold an album in Canadian record stores in 2006 with independent label Black Box Recordings.

“It sounds like it will benefit bands that are selling tons of albums anyway,” he says. “The people who aren’t making tons of money are probably getting nothing or very little.”

Smith also takes issue with the premise of the levy, that artists should be compensated for fans who are copying music from a CD to an iPod.

“If you bought the album, you can copy it as many times as you want,” he says. “You own the album. It shouldn’t cost more because you might put it on a mp3 player.”

Both ACTRA and CIMA told ITBusiness.ca the act of copying music from a CD to an iPod is currently illegal in Canada and that a levy could make it legal. The levy doesn’t give consumers permission to download songs from the Internet for free, the groups say.

“Just because you buy a building permit doesn’t mean you can steal cars from the garage,” says Duncan McKie, president and CEO of CIMA. The group represents independent recording companies in Canada, such as Arts & Crafts Productions. McKie has a chair on the Neighbouring Rights Collective of Canada board, which also plays a part in distributing CPCC money to artists.

But Alan Willaert, international representative at AFM Canada seemed less clear about the premise of the levy in an interview. Consumers shouldn’t have to pay a fee for copying a CD to an iPod, he said.

“I personally don’t think for your own consumption that’s any problem,” he says. “The problem comes in when it’s shared with friends.”

When told about the position of CPCC on why the levy is collected, Willaert proferred a different view.

“Once you’ve moved it from a CD and put it on a computer, it’s now in a position where you can send it to someone else,” he said. “So I understand that you have to tax to compensate for the possibility of folks doing it.”

AFM Canada has 17,000 Canadian members and also claims to represent non-member Canadian musicians. It receives money from CPCC for distribution among its members.

The levy collected in 2008-2009 by CPCC was distributed between three groups of copyright holders. Authors and publishers got the lion’s share with 60.1 per cent of the money, performers received 22.6 per cent, and record companies, 17.3 per cent. Record companies and performers have received a progressively greater share of the money since 2000.

Extracting money from album sales is yesterday’s business model for the music industry, Canadian rock musician Smith says. He has handed out his own albums and encouraged fans to make copies and share them with others.

“Any right-minded musician knows that selling albums in just a numbers game,” he says. “Just so they can tour and actually make money.”

ACTRA has several artists that are in favour of the levy and publicize their support on savethelevy.ca. The Web site is a campaign that asks visitors to contact their MP in favour of the levy. Artists cited as being in support of the levy include Choclair, Molly Johnson and Snow.

But some artists quoted on the Web site also appear to think the levy is compensation for downloading music from the Internet. These quotes appear on savethelevy.ca:

  • “With the onset of illegal downloading and file sharing capabilities, being a creator of music has become much more difficult,” says Chris Cummings. “As an independent artist, it is disheartening to put so much time, effort, and money into producing a CD only to find your hard work on file sharing web sites.”
  • “The levy is vital to so many creators and publishers,” says Bryan Potvin. “In the age of instant file sharing, the survival and modernization of levy is of paramount importance.”

But the levy isn’t intended to compensate for file sharing, Waddell says.

“We don’t believe it’s right to download music for free,” he says. “I hope people aren’t going to get that perception, because that’s not what’s intended.”

SOCAN declined to comment on the story, directing to the CPCC instead.

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