Musing # 1: Copyrights in the Age of the Internet - From the courtroom to Congress.
How many media execs does it take to figure out that music piracy is here to stay?
To date, media companies have waged courtroom battles against Napster-like services, against ISPs, and even against individuals who make files available over file-sharing services. But piracy continues, stronger than ever. The Kazaa Network routinely has 4.5 Million simultaneous users at any point during the day, a figure that approximates the number of viewers of popular cable TV channels. And Kazaa’s user-base will easily double over the next year.
The piracy battle simply cannot be won. Copyright protections will always be subverted. And large quantities of people will never pay for digital music. Even if media companies sell high-quality versions of music for $0.99, once this file is purchased, what prevents the buyer from posting the high-quality file onto Kazaa for everybody else to download for free?
As it stands now, media companies are losing billions of dollars on lost CD sales and spending millions more on litigation and on technology to subvert piracy.
This dilemma seems similar to illegal drugs. For years we’ve enacted laws to prevent illegal drug use. Despite this, illegal drugs continue to be used, dealers continue to make millions, and the government continues to waste billions of dollars each year attempting to capture and incarcerate drug-dealers and drug-users.
Instead of continuing a losing courtroom battle, why not initiate a political battle? Why not simply levy a tax on ISP service?
If an ISP tax were enacted, everyone would implicitly pay for piracy. If an AOL subscription currently costs $19.99, the new monthly price would be $22.99, with $3.00 being a “media”/”piracy” tax. $3 per month x 12 months x 50 Million Internet users comes out to $1.8 Billion in annual revenue for the media industry.
It would be much less expensive to grease a few politicians than it would be to continue to wage losing courtroom battles. And I think that the political approach would be more successful.
How to implement such a tax? Well, there are a few issues. First, how do you measure lost revenues? Second, how do you allocate the tax among media labels.
Regarding lost revenues, revenues from CD sales are probably highly correlated with concert ticket sales. Not knowing anything about current levels of ticket sales, perhaps the “target” tax revenue would be something like 10 times ticket sales for a given year.
Regarding allocation of revenues, which bands are bringing in the most revenue from concert ticket sales? Which labels are these bands affiliated with? Once we know which bands bring in the ticket revenues, allocation to labels will be fairly straightforward.
Not sure why this political approach hasn’t received more attention, as the media companies will surely continue to lose piracy/courtroom battles. |
