Music industry seeks new levies

The music industry is using federal consultations on copyright reform to take another stab at winning an "iPod tax" to counteract lost revenue from downloading and file sharing.

The battle for levies on new digital music players, such as the popular Apple iPod, was fought and lost in 2007 and early 2008, when the Federal Court of Appeal blocked an attempt by the Canadian Copyright Board to impose a tariff of up to $75 on new iPods and similar devices. Levies on smaller devices in place in 2003 and 2004 were struck down by the court.

Now industry insiders have another avenue to pursue the levies: the federal government's eagerness to introduce new copyright legislation.

The Conservative government launched the public consultations late last month, hoping to avoid the same criticism that dogged the last attempt at copyright reform, Bill C-61, which was drafted without substantial input and died when a federal election was called last fall. A town hall meeting in Toronto on Thursday evening - dominated by music industry executives and intellectual property lawyers, and attended by Industry Minister Tony Clement - sparked a lively debate about the iPod tax.

When digital music downloading caught on in the late 1990s, the Canadian government established a levy on blank recording media, compensating artists for the copying of their music. The fee is now 24 cents per audio cassette and 29 cents per CD.

"The levy works so well, we don't even realize we're paying it," television writer Dennis McGrath said.

But the fee was already dated when it launched in 1999. The era of mass downloading - through sharing hard drives, flash memory, DVDs, music players, or online file-sharing networks - is here. Fewer people are buying blank CDs, and blank tapes are obsolete. So the money generated for artists fell to $32.5-million in 2007 from $39.4-million in 2004, a 17-per-cent decline.

A regular annual drop in music sales has spurred the industry to try again. With two million iPods and iPhones in Canada, according to the mobile advertising firm AdMetrics, the potential haul from Apple products alone could be substantial.

"Keep the playing field open and let the market decide," said Daniel Snider, a student at the University of Ontario Institute of Technology, who argued for open peer-to-peer file sharing in tandem with new compensation for artists through a new levy. "File sharing improves my life and it's going to continue."

But whether it's worth the price, be it an additional $75 or a more modest fee per music player, was hotly debated.

Some advocates think the levies unfair because they are paid by everyone, and fail to differentiate between those who copy music for private use and those who use media such as hard drives and iPods for other purposes, such as the illegal mass spreading of copyrighted material.

It's all part of a larger discussion about how broad or specific the legislation should be, and whether it should be "technology neutral" - in other words, written in blanket terms that give it the flexibility to encompass new technologies as they emerge.

Mr. Clement has set a target date of Dec. 11 for introducing new legislation, but added he is open to taking "an extra couple of weeks or an extra couple of months" if necessary, to get the bill right.