Everyone is trying to find a way of adapting to the new reality of the music industry -- the fact that CD sales are dropping, that songs can be downloaded and shared instantaneously, etc. But is an Internet "tax" the way to do it? Late last year, the Songwriters Association of Canada came out with an open letter promoting the idea as a solution to illegal downloading, which I wrote about in this blog post. And now Nine Inch Nails founder Trent Reznor has floated the same idea, in an interview with CNET.
In the interview, Reznor talks about his experience with the Saul Williams album, a disc he recently released as a "pay what you want" download, after seeing the British band Radiohead do the same with their new album. Reznor says he wasn't particularly satisfied with the response, and if he did it again (which he said he's thinking of doing for the next NIN album) he would offer a physical product as well as the download.
The singer also talks about how difficult it is to adapt to a world in which music is essentially free, and then says that he thinks maybe there should be an Internet tax, in which everyone would pay their service provider $5 extra a month, and that money would then be distributed to artists to compensate them for illegal downloading. In a sense, it would be the ISP equivalent of the Canadian private copying levy, which adds a fee to the price of a blank compact disc and uses that to compensate artists.
The Internet tax idea is appealing primarily because it seems so simple. In reality, however, it would be horrendously complicated to administer, on top of being wrong. Why is it wrong? Because imposing a tax on a broad range of people for the behaviour of a small percentage isn't just unfair, it's bad policy and in most cases doesn't work. Why should everyone who uses the Internet -- including those who download music legally -- have to pay a fee for the actions of a small minority?
Trent and the Songwriters Association have some good company in their suggestion, mind you. A Harvard professor named William Fisher III laid out a similar proposal in his book Promises to Keep, published in 2004 (the relevant chapter is available in the form of a PDF file). He suggested turning the Copyright Office into something similar to the Patent Office. While Fisher admitted this would effectively create a giant bureaucracy with all the dangers that involves, he said it was the best option available. Neil Netanel, a professor at the University of Texas, suggested something similar in 2002.
Several supporters of such a licensing system point out that a compulsory license was what helped the radio industry develop in the early days, when the music business wasn't in favour of letting people listen to music for nothing. The Electronic Frontier Foundation, meanwhile, has proposed a similar system, but one that would be voluntary. Under that model, anyone who wanted to download music without repercussions would pay a voluntary fee that could be added to their Internet bill. Anyone who didn't pay the fee would leave themselves open to lawsuits for illegal file-sharing.
