Michael Arrington blasts a “music tax” as an absolutely terrible idea that will kill innovation. He’s probably right.
But maybe he’s not. Arrington writes,
Good musicians will always find a way to make money. Others may have to follow their passion as a hobby and (shudder) get a day job to pay the bills. But if a music tax is put in place, that innovation will die, and with guaranteed revenues and profits, the need to innovate, market and compete will also die. A music tax is a sure fire way to destroy an industry that is just beginning to really blossom.
Yes, blossom. As terrifying as these days must be for music industry players, it’s clear that a golden age of creativity and innovation is ahead of us, all led by the Internet as a nearly perfect distribution mechanism for their product. Music labels must die. Hopefully, before they do any more damage.
Remember Tyler Cowen’s argument about the economics of arts funding?
Overturning the conventional wisdom of this question, Cowen argues that American art thrives through an ingenious combination of small direct subsidies and immense indirect subsidies such as copyright law and tax policies that encourage nonprofits and charitable giving. This decentralized and even somewhat accidental—but decidedly not laissez-faire—system results in arts that are arguably more creative, diverse, abundant, and politically unencumbered than that of Europe.
A creator who wished to collect revenue when his or her song or film was heard or watched would register it with the Copyright Office. With registration would come a unique file name, which would be used to track transmissions of digital copies of the work. The government would raise, through taxes, sufficient money to compensate registrants for making their works available to the public. Using techniques pioneered by American and European performing rights organizations and television rating services, a government agency would estimate the frequency with which each song and film was heard or watched by consumers. Each registrant would then periodically be paid by the agency a share of the tax revenues proportional to the relative popularity of his or her creation. Once this system were in place, we would modify copyright law to eliminate most of the current prohibitions on unauthorized reproduction, distribution, adaptation, and performance of audio and video recordings. Music and films would thus be readily available, legally, for free.
Painting with a very broad brush (details will come later), here would be the advantages of such a system. Consumers would pay less for more entertainment. Artists would be fairly compensated. The set of artists who made their creations available to the world at large—and consequently the range of entertainment products available to consumers—would increase.
This is obviously very different from the idea advanced by the recording industry, but think about it — a “music tax” could yield a far more flourishing cultural ecosystem. You’ll get paid provided you allow your creations to be freely shared and remixed.
Also, the British are having a renewed debate over the television license fee that goes towards funding the BBC. The Conservatives have advanced the idea that the subsidy should be distributed more broadly. For the nationalists in the house, we could use the “music tax” to, say, fund more ballet and more opera. I realize that this is profoundly distasteful to the libertarians, and I’m generally with them on this question. But I don’t know, I feel agnostic. I’d certainly like to see some money spent on arts education. (This could stem from my sadness over the fact that I can’t play an instrument. Yet.) There’s a real debate here — should government play a more significant role in “cultcha.” Even if the answer is no, Fisher’s scheme has considerable appeal as an engine of openness and creativity.
Obviously, I’d want to cut the music labels out entirely. Like the tobacco companies, they are quite content to become a regulated utility. They see the writing on the wall. And just like GM, Ford, and Chrysler, they are rushing to Washington to save their asses.