Canada's labels slam proposed digital 'tax'

Fri Jan 4, 2008 8:16pm EST
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By Robert Thompson

TORONTO (Billboard) - A revolutionary plan that would effectively legitimize file-sharing here has been slammed as "a pipe dream" by Canadian labels.

The Songwriters Assn. of Canada proposes to allow domestic consumers access to all recorded music available online in return for adding a $5 Canadian ($4.96) monthly fee to every wireless and Internet account in the country.

The SAC claims that the proposal, which has been presented to labels' bodies the Canadian Record Industry Assn. (CRIA) and Canadian Independent Record Production Assn. as well as publishers' groups, would raise approximately $1 billion Canadian ($993 million) annually. Although the SAC does not detail how revenue would be collected and distributed, it says it would go to artists, labels and publishers.

The idea doesn't strike a chord with everyone. The SAC proposal "would signal the death of paid music services in Canada," said Alistair Mitchell, CEO of Canadian music service Puretracks. "It would be saying we're just giving up on developing new models. The concept is so flawed, I don't know where to start."

"This proposal is incredibly well thought out and well constructed," acting SAC president Eddie Schwartz said. Producer/songwriter Schwartz, whose songs have been performed by Joe Cocker, Pat Benatar and Donna Summer, says the scheme would "allow people to gain access to the entire repertoire of Western music" for only $60 Canadian per year.

That, he added, "amounts to $0.16 ($0.159) per day. (Which) seems like a pretty good deal." Schwartz said it's unlikely that users with both a wireless phone and an Internet account would have to pay twice for access.


The Canadian Wireless Telecommunications Assn. estimates that Canada had 18.5 million wireless phone users and 7 million residential Internet users at the end of 2006. In 2006, according to the International Federation of the Phonographic Industry, the trade value of recorded music fell 9.1 percent to $598.7 million Canadian ($529.8 million); CDs accounted for 85 percent of that total.   Continued...

<p>In this file photo Musician Avril Lavigne arrives at the 2007 American Music Awards in Los Angeles, California November 18, 2007. A revolutionary plan that would effectively legitimize file-sharing in Canada has been slammed as "a pipe dream" by Canadian labels. However, the proposal has received support from the Canadian Music Creators Coalition, a group of 187 acts, including the Barenaked Ladies and Avril Lavigne. REUTERS/Mario Anzuoni</p>