The MP3 tax

The Yomiuri Shimbun reports on efforts by a Japanese copyright owners' group to impose extra fees on sales of MP3 players — to make up for profits supposedly lost to online file-sharing:

With the growing popularity of portable digital music players, such as the Apple iPod, copyright owners groups are urging private copying royalties on the items be included in the retail price of the players, as is done with minidisc recorders and similar devices.

The system of adding royalty fees to the price of certain products was introduced in 1993 with the enforcement of amendments to the Copyright Law.

...However, the current system does not include portable digital music players — commonly called MP3 players — on its list.

The Japanese Society for Rights of Authors, Composers and Publishers (JASRAC) claims that, like users of MD recorders and other devices, users of portable digital music players should pay royalty fees.

The JASRAC royalty fee plan is severely flawed, and it's surprising that it's been in effect for so long on other types of music players and recordable media. First, it charges all users of these devices, even those who only use them to listen to legitimately-purchased or uncopyrighted recordings. Second, it is applied not as a replacement for copyright restrictions, but on top of them. You're still not allowed to copy music... but you're also being charged a fee on the assumption you're going to do it anyway.

But the scheme in Japan, with a miniscule charge of 400 yen (about $4) on each player, seems positively idyllic compared to what's going on in the Netherlands. As the Register reported in April:

A Netherlands proposed tax on MP3 players could devastate sales of hard disk players, and set up international waves over copyright legislation.

...If this legislation comes into play, the surcharge will be as much as €3.28 ($4.3) per gigabyte. This might put €180 ($235) to the price of a top end iPod.

I'm no economist, but I've got to think that slapping an extra tax of about 50% on something can't be good for demand. And in the end, that may be the worst part of these MP3 tax proposals: Instead of promoting the development of a legal, affordable market for downloadable music, they're propping up an outdated business model based on obsolete technology.