Copying collective pays its dues

The first cheques to pay recording industry professionals $28 million in royalties from a controversial media levy will be sent out in seven to 10 days, according to the organization that collects the money.

A spokesperson for the Canadian

Private Copying Collective (CPCC) Thursday said 50,000 people, including musicians, songwriters and music publishers, will be paid from the levy, which the CCPC is seeking to extend to internal memory in MP3 players. The Toronto-based group took part in a three-week hearing on the subject before the Copyright Board of Canada.

Currently, a pack of 100 blank CDs includes a levy of $21 on a retail price that averages $50. IT industry groups have suggested that if the CPCC proposal is approved, the levy could average $59 per pack at an average retail price of $88 plus tax. Industry Canada and Heritage Canada have each asked Parliament to review the private copying provisions of the Copyright Act. A coalition of vendors including HP, Apple and Creative labs recently warned that if the proposed levy is approved, retailers and vendors will be forced to reconsider offering products that the levy affects.

Those opposing the levy pointed to the fact that the CPCC had yet to pay any of the money collected from the levy. David Basskin, a CPCC spokesman who testified at the hearing this week, said they’re not the only ones who have been asking about the money.

“”However much pressure you think you might be able to bring on us is nothing to the pressure that’s being brought by our boards of directors,”” he said. “”We have been just about as focused as can be.””

The challenge, Basskin said, is that without knowing exactly what kind of music is being copied, the CPCC has to use a proxy system that analyzes airplay and sales data. There are then lengthy negotiations to acquire the right data and how best to allocate it, he said, adding that once distribution of the royalties is complete, the CPCC will have moved faster than any other blank media collective in the world for its first distributions.

“”We’re very proud that we have been moving as fast as we have been. We have nothing whatsoever to be ashamed or defensive about,”” he said.

Rob Black, president of the Canadian Information Processing Society’s (CIPS) Toronto chapter, said his members have been incensed about the proposed extension to the levy, which would also include recordable DVDs, flash memory and removable micro-hard drives capable of being used in MP3 players.

“”The changes that they’ve proposed are horrendous!”” he said. “”We’re not just talking about just read/write CDs anymore. We’re talking about memory sticks, we’re talking about portable hard drives. So if it’s not a fixed hard drive, they want to put a levy on it.

“”Can you imagine you couldn’t take pen and paper into meeting unless you paid a special levy that was twice the cost of the basics?”” he added. “”This is what’s been happening to us for a long, long time.””

Having already gone through two other hearings on the subject, Basskin said he was familiar with the dissenting arguments. “”We recognize that those who pay a levy would rather not pay a levy. They would rather have something for nothing. It’s human nature,”” he said. “”We’re responding to a situation in which people are buying products for the purpose of copying music, and the music doesn’t write itself.””

When a consumer buys an Apple iPod, for example, retailers, distributors and Apple get paid, Basskin said, but the device only becomes valuable once personal music choices have been downloaded to the device. “”If everybody else is getting paid, what argument can you make to say that those who make the music — which is the only reason you buy an iPod in the first place — shouldn’t get paid?””

Black contends that some of the recordable media in question are not used to capture music at all, but pictures and video. The levy, he argues, will drive consumers south of the border.

“”Recordable media is now like gas: you pay more in taxes than you do for everything else with it,”” he said. “”Lots of guys buy their CDs online or other recordable media. So it comes up from the States. Why wouldn’t you? It’s not a level playing field anymore.””

Basskin argued that a tax is only payable to government. He also took issue with the suggestion from HP Canada president Paul Tsaparis’ contention that the CPCC lacks public accountability. Going through the Copyright Board hearing in a public venue where its business practices were questioned is as open as you can get, Basskin said.

“”We’re no more accountable to the public than the management of Hewlett-Packard is accountable to the public for its profits,”” he said. “”Hewlett-Packard is accountable to its shareholders. We are accountable only to our members.””

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