Outdated European Copyright Levy System Descends Further Into Disarray

A couple of months ago, Ben Zevenbergen explained how the Dutch Supreme Court was finding it difficult to reconcile different aspects of Europe's copyright rules. At the heart of the problem is the copyright levy system, effectively a tax on blank media that is supposed to compensate copyright holders for a supposed "loss" from copies made for personal use. 

On Techdirt.

Germany Increases 'You Are All Pirates' Tax On Solid State Media By 2000%

Techflaws alerts us to an announcement by ZPÜ, the organization responsible for setting the levy on storage media in Germany, that fees will rise rather significantly (German original). For a USB stick with a capacity greater than 4 Gbytes, the tax would increase from 8 eurocents (about 10 cents) to 1.56 euros (about $1.93), a rise of 1850%; for a memory card bigger than 4 Gbytes, the fee would go up from 8 eurocents to 1.95 euros (about $2.42), an increase of 2338%. 

On Techdirt.

Cents of Entitlement

The "copyright levy" - typically a charge levied on blank recording media such as audio tapes, CDs and DVDs - is a total anachronism. If it ever had a justification - and I don't believe it did - it was that once upon a time the only content that existed came from "professionals"; if you were making a copy of a song or a video, it was, almost by definition, made by somebody else, and so, the argument went, you "ought" to be paying for something for it, since it might be an "unauthorised" copy.

Of course, the big flaw in this approach was that by demanding (and often obtaining) such a levy, the copyright industries lost their right to complain about those "unauthorised" copies. After all, they were being paid for them, just not through the traditional outlets.

But of course, greedy little things that they are, the copyright companies wanted their proverbial cake and to eat it; and so it has arrived at the ridiculous situation that in many countries they get the levy and still have the cheek to push for ever-more punitive action against that "unauthorised" sharing.

Today, of course, even that supposed logic about paying for unauthorised copies through a levy on recorded media doesn't really hold. We have entered an era of democratised creation, where most people in the West, and many elsewhere, have started taking photos and making videos. This means that an increasingly large proportion of the digital files stored on those blank media are probably yours, and have nothing to do with "professionals". So at the very least that copyright levy, where it exists, should be progressively reduced to reflect that new situation.

But that's not what's happening. Indeed, some not only expect to receive those old levies as a right, but want more:

The copyright industry never seems to have had enough. Starting today in Sweden, they demand a private tax for external hard drives and USB memory sticks.

The tax they demand is about 9 euros for an external hard drive, or 10 eurocents per gigabyte for USB memory sticks. They have previously demanded a tax for cassette tapes, which was how this private taxation right started, and gradually expanded it to blank CDs and DVDs, as well as media players with built-in hard drives. Yes, that includes the latest game consoles — Swedish kids pay about 15% tax to the copyright industry on a Playstation 3.

This is entitlement at its most blatant, and it's time to put a stop to it. Assuming that doesn't happen (after all, if the copyright industries lose this source of income, how will theypay for all the fat cats' salaries?), the quid pro quo should obviously be for those industries not only to drop their calls for punitive copyright enforcement, but to accept, publicly, that these levies actually give the public a right to make copies and to share them.

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Is Format Shifting a Big Giveaway?

Yesterday I wrote about the BPI's reaction to the UK Government's response to the Hargreaves Report. Not surprisingly, the Musicians' Union (MU) also has a view here, specifically about proposals to allow format shifting:

In response to today’s government announcement of a consultation on a new exception to UK copyright law which would legalise the act of making a private copy of a CD, the MU has called for a fair compensation scheme to be introduced.

So why might that be? The MU has an interesting analogy:

“The device manufacturers readily pay for patents and the like on each device sold and yet the act of copying onto these devices the very content that the consumer is most concerned with – music, is not currently generating any income for the creative individuals who compose and perform and entertain the public.”

It's fascinating to see one intellectual monopoly being used to justify another. But what this overlooks is that manufacturers do not "readily" pay for patents: they are forced to do so by the government - which, of course, is precisely what the MU wants for its "fair compensation scheme".

Except that it's not fair. The MU says the music-playing device "is not currently generating any income for the creative individuals who compose and perform and entertain the public": why on earth should it? The musicians had nothing whatsoever to do with that device; they didn't design it and they didn't make it. It might never play any music, but be used for playing back recordings made in the home or outdoors, for example.

And if it does play back format-shifted music, the point is that by definition it will come from another a medium like a CD that the customers have already paid for - that's why it's called "format shifting". That means that the musicians will also have already been paid. So why should they be paid again for doing precisely nothing?

The MU's statement here is a real giveaway in the sense that it reveals the abiding and ingrained sense of entitlement that pervades all the creative industries. They are not content to be paid once like most people, but want to be paid again and again.

That is also evident in the concluding paragraph:

The Union has been robust in its opposition to this proposal and UK Music has adopted the MU position and is making the case for fair compensation to be made in return for the introduction of an exception. As part of this UK Music is examining the economic tool of ‘choice modelling’ to determine the value that the ability of being able to store music adds to devices such as the iPhone in order to present a robust argument to Government.

Again, even assuming that such a value exists, there is no reason that musicians should receive any more payments for it. That value has already been factored into the price of the music when it was bought, in whatever form, and into the compensation paid to the musicians who made it - that's how markets work.

Arguing the contrary makes as much sense as arguing that the existence of devices like music players and smartphones increases the value of the music played on them, because people are willing to pay more to have this useful extra capability. By the MU's logic, musicians should therefore pay a levy to device manufacturers for this added value the latter create for artists.

Of course that's absurd - as absurd as the MU's proposals that musicians should be paid again for the fact that you might actually play digital music on a digital device. The point is that all these kinds of "value" are already factored into the prices we pay.

Trying to argue that musicians deserves a cut of some of this nominal value is yet another example of the fantasy-based economics the creative industries regularly apply to the digital world. Maybe it's time they "shifted" away....

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I Love Smell of Private Copying Levies in the Morning

If the media industry wants to make sure that everyone will start copying content and generally handing it around to all their mates, this is by far the best way to do it:

Hardware makers meet politicians and copyright societies in Brussels today to discuss introducing a Europe-wide levy on media devices, offsetting revenue apparently lost from personal copying. Since 2001, 22 of Europe’s 27 countries have made technology manufacturers pay the surcharge on products that allow music, books, movies and other copyrighted content to be copied. Despite the companies having fought the obligation for years, the levy reaped €568 million for rightsholders in 2004.

The thing is, if *everyone* is paying a levy purportedly to cover revenue "lost" from personal copying, then surely that means that *everyone* can merrily copy away, morally secure in the knowledge that they have already paid for the pleasure. And even if it doesn't, guess what? That's nonetheless how every Thomas, Richard and Harold is going to interpret it.

Go ahead, chaps, make our day.