Canada Increases ‘Music Industry Subsidy’ on Blank CDs
Written by Ben Jones on December 13, 2008Canadian users again face an increase in the cost of blank CDs, as the Copyright Board has increased levies on them by 38%. The raise was authorized in response to rises in music compression and increases in songwriter royalties. With this rise, the Copyright Board is simply ignoring all technological advances since 1999, while the music industry enriches itself.
Levies, like them or loathe them, in some countries it’s the law. In Canada they were introduced in 1999, to help offset the alleged losses due to music copying. The theory goes, that as people are copying music tracks onto blank media, then what they are not doing is paying for another copy of that music. That Nirvana track you put onto a compilation CD for your drive to and from work, is another copy that you would otherwise have bought (apparently). So, that loss must be compensated.
For every blank CD sold in Canada, 21¢ used to go to the music industry, to compensate Canadian artists. This has now gone up to 29¢. However, the levy was introduced before the first iPod was sold, and this immediately brings up one of the key problems. The question is: How many of the blank CDs that are sold are used to copy Canadian music onto it? Furthermore, is it fair to ‘tax’ all the other people who buy those CDs for other means?
It seems that the levy is outdated by technology since most private copies are made on MP3 players, not on CDs. With the rise of MP3 players, and the ways to get them connected to audio equipment, blank CDs are becoming less relevant in the audio world. Further, as most computers now come with DVD burners, CDs may be following the floppy as an outdated storage medium. This raised levy might be the beginning of the end for CDs, at least in Canada.
Of course, the advances in technology were totally ignored by the Copyright Board. The only technology mention dealt with compression. Two reasons were given for the raise by the Secretary General of the Copyright Board of Canada, Claude Majeau.
“Two main factors led the Board to raise the CD levy rate to 29¢. First, the mechanical royalties that record labels pay to record a song onto a prerecorded CD have increased. Second, because consumers now use compression technology when they record music, the average number of music tracks copied onto a CD went from 15 to more than 18.”
Unfortunately for Mr. Majeau, the second point is greatly undermined by the fact that, according to the audio CD standard (commonly known as Red Book), CDs shouldn’t be compressed at all. If he was referring to mp3’s, then reducing the average size from 43Mb to 36 (assuming a 650Mb CD) is also unusual.
How fair the levies are is debatable. First, while it claims to be for compensating artists, the Canadian Private Copying Collective (CPCC) FAQ makes it clear that only Canadian performers and record companies qualify for payment. This is a significant blow against non-Canadian artists that don’t have a Canadian representative – the small artist. Worse, the payout of the collected levies is based on radio airplay and retail sales (physical and download). So, a starting Canadian artist that decides to burn 1000 CDs of his demo, he or she is actually paying $290 to established musicians and record labels.
There is also the question of payment. By their own figures, the CPCC had collected almost $242M between 1999 and 2007, of which just under $207M was available for payouts, but only $148.8M had been distributed, leaving $58M or so sitting around, roughly equivalent to the levies collected in 2006 and 2007.
Perhaps most unusually of all though, is that some consumers may be entirely unaware of the levies, let alone their rise. Despite the rise from 21¢ to 29¢ per disc, newegg.ca is selling spindles of 100 for under $20. Considering the levy cost on them is now $29, that’s quite a financial hit. The price of blank CDs may rise soon to compensate, putting them at similar prices to blank DVDs which have no levies. Fortunately for consumers, most DVD players can handle MP3s now. Another great example how technology has advanced since 1999, and also ignored by the Copyright Board.
Previously: OiNK Admin and Uploaders Appear in Court
Next: BBC Relies on ‘Pirate’ Audio To Bring Back Lost TV Show
61 Responses
Since my last ‘first’ got scrubbed, I gotta pop up again :-)
Tax,Tax,Tax, gotta love Governments everywhere.
Considering that you fit about 15 songs on a CD I therefor suggest that we put the same fee on mp3-players. Say the IPod with 120GB. An mp3 file is ~4MB. That makes 30,000 files. On a CD there’s 29c/15 songs, that means about 2c per song. Thus.. what about 600$ on an Ipod?
Wait.. does that sound ridiculous?
Levies on digital music players have been considered there, and rejected. The same for flash media (Xd, SD, Memstick, CF etc).
“Second, because consumers now use compression technology when they record music”
Even if this was true, the tracks are going to be the same length, no matter what compression is used. The only way the number of tracks per CD will increase, is if people record more tracks.
Hard disks are cheaper as disks atm, so I buy them for a while now. Only the are all external, so people visiting always ask where all those black things (maxtor) are for… ;)
The levies are what make P2P downloading in Canada LEGAL according to the Supreme Court. So levy away, I don’t use CDs anymore anyway.
So this is like a effing WELFARE system for Artists, lawyers and music corporations?
If I became an artist and released a bit of dung every now and then, could I get a dip of this money every time someone buys a cd?
I have to agree with “cheeseeater”, this keeps the record labels off our asses and the RCMP from knocking on our doors. To some degree, I wouldn’t mind all too much if that levy was placed on flash media eventually for that same reason. Keeps the big labels from bitching and griping, despite their need for change.
And for the “up and coming artist burning demos” conundrum, I feel it is being resolved but is worth a note: Host the music on a web site and just hand out links to prospects. True, the CD is better for instant listening, but this would allows for the receiver to easily put in a format they prefer. It already seems to be a tradition with up-and-coming visual artists to have some kind of portfolio page, this should work the same for audio or motion picture arts.
Great, so the RIAA (CRIA?)-backed labels will get paid for every CDR whether or not the people are actually copying music, while non-RIAA artists get nothing and the Canadian fans will download their work for free using the CDR-tax as a justification.
I can’t remember the last time I’ve used a CD-R, as all I ever use are DVD’s when I need to burn data or home videos for family.
Oh yeah, a month ago when I had to burn a Linux distro to take into the server room, as most of my client’s servers are old and only have CDROM drives in them.
I think that an important point to consider is “who is getting the payment”? After all, there are many small not-well-known artists who distribute their work (possibly on P2P networks themselves), but this scheme seems to favor only the big and established “artists” and thus perpetuate the dominance of industry over culture. In order to fairly pay them, every single artist must be paid - which is surely an impossible task, consider how many there are that are unknown.
In any case, although it is a pretty ridiculous system, it is good as long as it keeps P2P legal (of course). If anything it is more foolish than harmful.
Roze
cheeseeater, you might want to correct the CPCC then, as that contradicts the information int he FAQ (the link’s in the article) with questions 10 and 11 (page 3)
I don’t know Canadian law myself, but I’ll make some enquiries, since there appears to be some confusion on the topic.
Perhaps the biggest problem with these industry-lobbied royalty-taxes is that they never go away, even long after the situation they were designed to address has ceased to exist.
A good example of this (as noted in the title article) is the declining use of CDs for copying music as computers and MP3 players have become the dominant audio-playing devices — yet the levy requirements ignore this.
Another example of this phenomenon might be the blank cassette tax. It’s still 29¢ on blank cassette tapes sold in Canada - even though most cassettes are now used for non-RIAA-infringing purposes such as recording concerts (at least until someone invents and markets inexpensive portable CD-recorders)
A comprehensive chart on all the Canadian music tax levies can be found on http://neil.eton.ca/copylevy.shtml
Blank CD`s??? WTF are those?
coasters for coffee mugs?
kids frisbee`s?
for making lamps out of??
I STREAM EVERYTHING BABY!!! ITS THE WAVE OF THE FUTURE!!
http://WWW.NINJAVIDEO.NET
INTERNETJUKEBOX.COM PUT IN YOUR REQUEST AND THEN HEAR YOUR SONG!!
So, if levies goes to other medias, 29c/700MB => ~$1,6 for DVD5 => ~$3,2 for DVD9 => ~$1630 for DVD-RW (you can rewrite about 1000 times) => ~$625 for my 1.5TB hard disk (if it was write once) => ~$625M for a normal HDD usage… Damn, I owe them a hell of a lot of money…
SOLUTION!
Implement this everywhere, make torrent sites completely legal to download anything.
I’m happy (or would be)
Omg I have a revoloutionary idea. Canadians should use DVDs as they do not have a leavy. Lol that way they are copying like 50 cds worth of music onto a dvd :D
Hey next they will be puting these leavys on Hard drives as they can copy stuff to. LOl the leavy will be $25 per GB probably lmfao. :D
OH and @ 14 I stream alot of stuff. I mainly listen to music on a single internet radio channel. It is even better than buying music cause you could never afford that much music, that many games etc. And I am constantly hearing new music I have never heard before. And since I like the types of music they play on the radio channel it is good. And im listening to new and difrent music because all of the djs listen to slightly diffrent music of the same style :D. Heaps of reagaee :D. Well im horrible with genres and stuff so they do it for me. Looks like the RIAA and MPAA automaticly fail even when I don’t pirate stuff. Sigh… when will the riaa and mpaa learn that they fail no matter what and that no one likes them :/
Gladly pay me taxes arrrrgghhh!
So the tax is distributed amongst the artist’s. How do they know who to pay it to? Is it a case of who is at No1 in the charts gets a bigger bit of the pie or what? It all sounds insane. But I think the tax for all this nonsense is worst in Finland. Those fins might be good at driving, but, they are gettin well shafted from these silly buggers.
@13 : “(at least until someone invents and markets inexpensive portable CD-recorders).”
Where the fuck have you been for the last 10 years? Outer space? Inexpensive CD recorders, ROFL,…
Optical media are dead. Haven’t recorded a CD in a long time, haven’t owned a DVD in my whole life, laughing about Blu-Ray ever since it won over HD DVD just to become Sony latest epic FAIL.
Charge 100 Euro for a CD or DVD. Nobody with a brain is going to care.
Their is a solution. Buy your optical discs where the tax doesn’t apply.
Here in France there is that tax too (making a spindle of 25 cds around 20€ in the supermarkets). Guess what… A lot of companies in Germany, where there’s no such iniquitous tax, are making huge amounts of income thanks to the french tax.
So it’s just a matter of retailers. Soon half criminal organisations will sell blank cds in Canada, and sales in supermarkets will drop. Transfering another part of the economy to “illegal users” (mafias and tax evaders) instead of “fair users” (supermarkets and specialized shops).
Well done governments, you are the most idiotic people who can be found in every country.
so what if i’m buying blank cd’s for something other than music????
i’m still screwed, awesome!
what a stupid way to get money from people, but at least it gets the CRIA off everyone else for the time being.
to all these cria supporters above that claim they buy blank cdrs for what ? linux isos damn you have a lot a linux isoz.
pictures ya say
DO YOU KNOW HOW MANY PICS CAN FIT ON ONE CDR
let alone 100?
These lying sacks a crap want the levy removed so they can sue us.
So they can ruin life they do to americans.
Its actors and msucians fault and until they get pressured more NONE of us will get left alone.
SCREW ACTORS AND MUSCIANS.
and to the above people with a cdr player in there car or at he cottage HOW is it exactly do you listen to music ?
oh i see its an mp3 player well tons a people dont have those
and heres a wild idea all that throttling has decreased sales because we cant put as much on the cdrs
increasing proces on blnaks will not help it will work opposite and soon there cost is too much.
Americans buy medicine from Canada… so can’t Canadians buy CDs from America? Are they stopped at the border?
The same has been applied in Spain for a few years, the cost of CDs and DVDs has been DUPLICATED, and it’s now being applied to “all digital supports where music can be stored”.
Is the artists ever going to see ANY of this money?
I don’t think so…
Wouldn’t it be better to pay a modest levy such as that described here rather than fighting RIAA litigation?
Wow, you have to admit that is a pretty neat approach!
jess
http://www.anonymity.cz.tc
21¢ going to the music industry?
I live in Canada and I’ve never paid more than 25¢ per CD (I am nothing if not cheap). And that is purchased at retail prices (spindles of 50-100).
Maybe it is possible that some of these companies aren’t paying the levies. The number can’t be right otherwise.
As the manufacturer, wholesaler, & retailer are splitting less than 4¢. On occasion I’ve bought them at prices less than 21¢ so everyone would be taking a loss.
Best price I ever got (from a canadian retailer) was 12¢ per CD although the CDs themselves were horrible so it wasn’t much of a deal.
Here in Belgium I bought a spindle of 50 maxell 16x DVD5 discs, Ritek F16 dye for 52.80 euro. This isn’t exactly high quality at a price that is way to high. In Germany you can buy a 100x spindle of taiyo yuden discs at 38 euro. I found a store that delivers here, but most don’t. Stores in the netherlands and luxembourg are only allowed to send to Belgium after paying extra taxes, sometimes even a premium on top of that. So much for open borders in the EU. In the end we’re all getting screwed over because by now we should have already been able to buy HQ blanc DL disks at like 20 euro for a spindle of 100. And who says it’s copyrighted material that ends up on them? I really don’t see why record/movie companies need a piece of this pie as well.
For once, I have to disagree with a TF article. I live in Canada, and I think this is a great idea, and don’t mind paying it at all. Why? Because it makes downloading effectively legal for the foreseeable future here. In fact, one of the primary factors taken into account in court rules that make both downloading and uploading unpresecuted offensives pending copyright reform (which has not happened, and isn’t likely too for a while), was the CD tax. It’s not perfect, but it’s an effective answer to the problem. Consumers can get their music any way they want, and they pay pennies a song to burn it to a disc. Sounds good to me.
yay another reason to pirate more woot woot.
As a Canadian this news angers me.
I’m hereby saying that I’m not going to buy any more cds, inclusive of online music sales.
I use cds for variety of purposes mostly to backup my own work, but with added taxes on cds it makes no sense why I’m penalized.
I see no reason why I should continue to support them, when either way they’re going to get paid. If I choose not to listen or pirate any of their music, but buy cds to be used to backup my word documents or home videos - they still get paid even though they had no part in the content the cd was used for.
Why should I do the ‘right’ thing, the moral thing, when they’re already stealing from me? I say screw them, screw Universal, screw EMI, screw SOCAN.
I’m going to pirate everything now. And since I’ve started to use less and less cds, I’m just going to go buy portable harddrive from an American online retalier, then have it shipped to me and use that to backup everything + plus I’ll use it to pirate all the music, movies and software I want. And I’ll do it in a smart way so I don’t get caught using torrents or p2p - there’s nothing they can do to stop me.
“Despite the rise from 21¢ to 29¢ per disc, newegg.ca is selling spindles of 100 for under $20. Considering the levy cost on them is now $29, that’s quite a financial hit.”
They are not taking any hit.. they just don’t pay the levy. Lots of places sell levy free CDR’s. It is just the big guys (Like Maxell and Sony) that pay the levy… Ritek ain’t paying no stinking levy.
“So, a starting Canadian artist that decides to burn 1000 CDs of his demo, he or she is actually paying $290 to established musicians and record labels.”
Actually you can apply for an exemption to the levy…
“Under certain terms and conditions (known as the zero-rating program), the CPCC used to waive the levy on sales of some media to certain persons or organizations. These included
* religious organizations
* broadcasters
* law enforcement agencies
* courts
* tribunals
* court reporters
* provincial ministers of education
* members of the Association of Universities and Colleges of Canada
* music and advertising industries ”
http://neil.eton.ca/copylevy.shtml#anyone_exempt
So Joe Band could get levy free CDR’s.
This doesn’t bother me at all. Most people use CDs so rarely now that it should have such little effect.
I’ve had the same two packs of 100 CDs for nearly 2 years. I’ve only just begun on the second pack.
can’t you buy them online from somewhere else. buy a lot to offset the cost of shipping and your good for while. No?
Ask for a discount on shiping when buying im bulk .
Co. should offer this if they dont already
My PSP has about 5000 internet radio channels. :P
Who’s stealing that much music to where they need CDs? Aren’t they just using their computer or iPod (etc)?
BTW
we could pay for htis buy migrating one department OFF Microsoft ocmputers and the revenue saved just pay it on behlaf a all canucks, and give more power for us to control the price increase
welfare people get infaltion for costs
your pay check prolly went up by that same amount
so no more increases beyond inflation.
In case you didn’t know, there’s a levy in the United States too. But most blank CDs are exempt from the levy.
Have you ever noticed on the spindles of blank CDs in the stores, some are labeled specifically for music and some are labeled specifically for data? The music CD-Rs are priced higher, because they have the levy, and nobody buys these unless they must. The only time they must is if they are using a CD recording deck. Each music CD-R has an embedded code that identifies it as a music CD-R rather than a data CD-R, and when you insert a blank CD into a CD recording deck, it looks for the code and will refuse to burn the CD if it does not have the code. CD recording decks also have other encumbrances such as Serial Copy Management System (SCMS) as mandated by the Audio Home Recording Act (AHRA).
But if you are using a burner drive connected to a PC, you can burn music onto a data CD-R, and there is no levy. This is because the AHRA exempted recording devices and media which do not have digital audio as their primary purpose, such as CD burner drives and blank CDs specifically labeled as “for data”.
I don’t know the specifics about Canada. It could be the same as the United States, with the levy applying only to blank “audio” CD-Rs and not “data” CD-Rs. I wouldn’t be surprised if the Canadian music industry had flimflammed their way into collecting money from all blank CDs on the assumption that they are used for audio, and if that is the case then similar logic could be applied to create a copyright tax on your internet connection on the assumption that you’re downloading music and movies.
Mind you with the strength of the pound v’s the euro at the mo, its maybe better to only buy a 50 spindel:P
While the levy helps keep downloading music ‘legal’ as it makes it harder for the opponents to argue they are losing revenue, it isn’t the reason why the Supreme court ruled the way they did. To quote one of the judges:
“I cannot see a real difference between a library that places a photocopy machine in a room full of copyrighted material and a computer user that places a personal copy on a shared directory linked to a P2P service. The mere fact of placing a copy on a shared directory in a computer where that copy can be accessed via a P2P service does not amount to distribution. Before it constitutes distribution, there must be a positive act by the owner of the shared directory, such as sending out the copies or advertising that they are available for copying.”
Link to the ruling explanation on the lawyer’s website: http://www.robic.ca/publications/Pdf/274.16-BGA.pdf
Article on the topic: http://www.lces.ca/Backgrounder23/
Why would I put my music on a cd? Those tings barely hold 750M of music.. never mind the fact that they don’t fit in my pocket very well.
My 25$ mp3 player holds about 10 cd’s worth of music and takes up roughly the same space in my pocket as my zippo lighter :-)
Are hard disks under the levy?
It should be noted that NewEgg has no actual presence within the country, and ships over the border. While they do charge PST and GST correctly, they may not be subject to the levies.
This isn’t such a bad idea, but blank CDs are the wrong target.
1) Levy a flat fee on all ISPs.
2) Create a big pool of cash from those fees.
3) Bring torrents in from the cold and get users to register (probably linked through their ISP for security).
4) Let artists register their torrents.
5) Track what’s being downloaded and divvy up the pool of cash based on percentages.
Sure there will lots of probs and smart-arse posters will come up with all sorts of work-arounds like zombiebots stacking certain artist’s numbers, but we can fine tune it.
Just a creative attempt at a solution to this mess. We need more of those.
Im Canadian. I dont pay your shitty levy I buy wholesale from the US in mass. Just a fact for the canadian comment posters above.
1) The levy DOES NOT protect you from corporate extorionists. If you believe it does your sadly mistaken.
2) ISP Levy? ARE U KIDDING?
3) REAL artists DONT get paid a cent from the levy. Frankly I still cant find the dotted line. Wheres my CPCC cheque? Oh thats right im not a member of the “Big/criminal” 4.
My DATA is NOT a royalty for the Canadian recording industry.
“ISP Levy? ARE U KIDDING?”
I’m deadly serious.
Think it through before you knock it down.
You’re a musician, you release a song to the torrent pool. Depending on how popular it is (measured by downloads) you get remunerated. If it’s really popular, you’re rich.
Or, you’re a user. You pay a small flat fee. (I’d be happy for it to be double my current ISP bill.) For that fee you get all the content you want. Anything and everything. Totally legal.
Even the arsehole corporations will have a win. The old content they own can be remunerated as well.
It would streamline the delivery of content directly from producer to consumer and deliver an income based on popularity. Not worth even thinking about?
This rip-off tax is certainly unfair to people who use CD’s only for data backup/archiving. Ex: The only CD-R’s I’ve ever bought have been used primarily to back up .JPG’s from my digital camera. Why should I pay tax to subsidize ‘artists’ that produce a product I would never buy?
Cant believe how the government lets this happen like that, thank god im not canadian nor american
I’m a musician. I’m sure someone, somewhere in Canada has some of my music on it. Where the fuck is my cut?!
I notice many retail stores do not charge the levy probably because manufacturers outside of Canada are not required to charge it upfront. Places like London Drugs here in Victoria DO charge the levy and they have to have a little sign in the CDR/DVD section to explain why their prices are so much higher than elsewhere.
It doesn’t look as though future shop or any of the local computer stores bother with this extra levy.
I wrote to the minister of heritage back in 2000, but the reply was an idiotic form letter that basically said “Too bad”.
I run a recording studio, and realistically about 2 CDs of every hundred that I use might have copywrited material on it. All the rest are my own music, or new music created by my clients. The common battle cry is why the hell would I (or my customers) want Celine Dion to get any money from our efforts? (Since obviously it will mostly be the big-selling acts who get a lion-share of the proceeds)
Refuse to shop anywhere that carries this levy. Buy all your blanks on-line.
To those who were wondering about the iPods and MP3 player levies. You can expect that to happen sometime soon. It has already been seriously discussed among those who wrote this law. It will easily add a few hundred dollars to the price of such a device.
Arthursucks: If you happen to be a Socan member, you might be able to appeal to them, but if you do not show up on Soundscan or whatever method they are using to calculate air-play, it translates into nothing.
If you happen to be:
1. Physically disabled (an registered as such)
2. A court or tribunal
3. A police organization
or
4. A registered religious or charitable organization
Only the above are officially exempt from the Levy.
So, I propose we start a new religion.
If you are going to tax blank cd’s in case they are used to burn audio, then to be fair, you also need to tax dvd’s for video content, and finally, paper, just in case we might print a book. It goes on and on. It’s quite ridiculous; which is why few nations have implemented it.
Way to go Canada. Those record company execs need their private jets, hookers, and drugs paying for, don’t they? The fact that blank cd’s have many uses: vcd, data, etc doesn’t seem to factor into their warped sense of objectivity.
Ipods are not used for music at all and all black cds clearly are… And its only canadian music that is on them! So that means all money goes to nickleback…
Well that’s just Crazy. Just Nuts. No Freedom. No Love. Hey, to make some very good money online, check out
www dot thespidersystem dot ws
16 references to this post
Responses are closed
All remaining responses will continue to be archived. Use the TorrentFreak forums if you want to discuss something.