Socialized Music

Many students of copyright law think that something like a compulsory license scheme is the only way to assure compensation for artists. I certainly think that’s the future of music. Now Nokia and Universal are bringing us a step closer: “some cellphones will be bundled with the right to download an unlimited number of songs [from Universal] for a year.” NYT blogger Saul Hansell does a nice job explaining the slippery public/private divide here:

I’ve always thought that the logical [way to assure compensation to artists in an age of downloading] is to create some sort of pooled fund of royalties. Those would come from various places including through ASCAP and BMI, which license public performances, through the compulsory license that pays songwriters for radio play, and the Audio Home Recording Act, which pays both music labels and composers from a tax on some home recording devices and blank media.

Getting all the various parties and Congress to agree on some sort of tax scheme may be downright impossible. So Universal is trying to build what amounts to a private sector tax into other products and services consumers buy. This might be easier than going to Washington, but I’m not sure how much easier.

He’s right to be skeptical. If, as some estimates state, about $45 in tax per taxpayer per year could pay for the entire music and movie industry’s output, why aren’t we going for this deal? Is the public sector that discredited?

Salil Mehra has offered (and analyzed) a Japanese perspective that perhaps it is. . . .


According to Mehra, “the Japanese government stopped their digital recording media tax from morphing into an iPod tax.” His paper provides a number of very interesting points of view on the topic. As I recall, one of the key worries in Japan was that the entertainment industry would lobby the government to keep hiking the levy. . . . just as industry lobbying in the U.S. has led to more and more protection for copyrightholders.

Perhaps that capture concern makes sense in Japanese political culture, but I don’t see it as a major worry in the U.S. Our anti-tax crusaders are ingenious at defeating levies. And isn’t one of the main concerns of the right that socialized medicine would starve pharmaceutical companies, doctors, and hospitals of funds? Why doesn’t that concern about the “excess bargaining power” of a monopsonistic government buyer translate into assurance that we will not be overcharged for “all-you-can-eat” entertainment options?

On the other hand, perhaps the worry is precisely that–that a single-payer music plan would keep reducing funding to music, movies, and the like. I guess I can see that worry, but we have to also acknowledge gains from underpayment that may not occur in the medical context. Would we really be impoverished as a nation if we had, say, 15 fewer car chase scenes last year? Does the pro-market side really think that the British TV culture largely funded by a license tax is demonstrably worse than that which is paid for by subscribers?

Finally, before anyone starts railing against the evils of cross-subsidization, I strongly urge you to read this Nocera column on a la carte cable. Nocera notes that while it seems consumer-friendly to let people pick and choose the channels they pay for, that freedom could undermine the diversity of cable offerings:

Unmoored from the cable bundle, individual networks would have to charge vastly more money per subscriber. Under the current system, in which cable companies like Comcast pay the networks for carriage — and then pass on the cost to their customers — networks get to charge on the basis of everyone who subscribes to cable television, whether they watch the network or not. The system has the effect of generating more money than a network “deserves” based purely on viewership.

[For example, if] every African- American family in the country subscribed to the Black Entertainment Network, it would still have to raise its fees by 588 percent. “If just half opted in — still a wildly optimistic scenario — the price would rise by 1,200 percent.”

Perhaps we can work back from the dysfunctionality of that unraveling scenario to see how truly bizarre our lack of an “all-you-can-eat” music payment scheme is.

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