Hey Trent — a music tax is a dumb idea

by Mathew on January 10, 2008 · 34 comments

There’s a great interview with Trent Reznor of Nine Inch Nails up at CNET, in which he talks about his experience with the Saul Williams album he recently released as a “pay what you want” download (which I wrote about here). He says if he did it again — and he’s thinking of doing so for the next NIN album — he would offer a physical product as well as the download, and he talks about how music is essentially free now.

I say it’s a great interview, and it is — but Trent also says something that I think is pretty dumb: he says that he’s in favour of an Internet tax, in which everyone would pay their service provider $5 extra and that money would then be distributed to artists to compensate them for downloading. He’s not the only one who thinks this would be a good way to solve the problem, either; the Songwriters Association of Canada recently came out in favour of the exact same thing: i.e, a tax on ISPs.

This idea is appealing primarily because it seems so simple. In reality, however, it would be horrendously complicated to administer, on top of being wrong. Why is it wrong? Because imposing a tax on a broad range of people for the behaviour of a small percentage isn’t just unfair, it’s bad policy and in most cases doesn’t work (and please don’t compare this to the taxes I pay to provide medical care to smokers or whatever; that’s life and death, and this isn’t).

Why should everyone who uses the Internet — even those who just use it to get their email once a week, or to send a web link to their bridge club, or better yet to legally download songs from iTunes — have to pay a fee to compensate artists for the fact that less than 10 per cent of Internet users commit copyright infringement on a semi-regular basis? It makes no sense at all, despite how appealing it seems at first glance.

I sympathize with Trent, and with other artists who are struggling to find a way to adapt as traditional business models fall apart around them, but coming up with new taxes is the wrong solution. As Mike Arrington points out at TechCrunch, it is a both a dumb and dangerous idea for the industry.

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  • http://nineinchnails.com Year Zero

    Trent Reznor and Nine Inch Nails is the only genius and significance left in the music, the whole world is constantly intrigued and watching what he is doing and is going to do next. The STRUGGLING corporations are faceless, no-substance giants very much like processed cardboard cheese who resort to taking away the freedom to choose and other basic rights to control the masses, very scary to the general population. Trent Reznor and NIN is liberating us from all this. We all look forward to what he is going to do next and his upcoming projects for they are the only real thing left. Trent is Light in a world full of nothing-cs

  • http://www.mathewingram.com/work mathewi

    Er, thanks for the comment, Year Zero. I’m not sure it’s really
    relevant to what my post is about, but I appreciate your enthusiasm –
    and I’m sure Trent does too.

  • http://www.allaboutnortel.com Mark Evans

    Totally agree – and how would that money be split between content producers in the music, movie, television, magazine and newspaper markets. It would be admin hell!

  • http://blurringborders.com Kevin Donovan

    The “tax” you address need not be a blanket fee. It could easily be opt-in for music fans who want to get their music from anywhere (BitTorrent, iTunes or their friends).

    The EFF has advocated this for some time: http://www.eff.org/wp/better-way-forward-voluntary-collective-licensing-music-file-sharing

  • http://blurringborders.com Kevin Donovan

    As you can see from my link below, a precedent for this “admin hell” exists: broadcast radio.

  • http://www.mathewingram.com/work mathewi

    I think a voluntary collective licensing system is a great idea, since it wouldn’t be a blanket tax. But would the music industry support such a system? I think that’s extremely unlikely. I think we’d be better off making it easier for music fans to compensate the artists they like directly, instead of creating another gigantic, unwieldy regulatory structure.

    And I’m not sure the radio licensing system is such a great model, regardless of how much it helped the industry early on in its evolution. Do we really want to base a new-media strategy on something created half a century ago for what is now a dying medium?

  • Stephen

    A tax is a great idea! Just remember we’re licensing ALL music under copyright whether it’s downloaded or not and not matter how much it’s downloaded. We’re talking millions of songs. How much do you think Trent would get then, 1 cent per album?

  • Stephen

    Oh, you mean a subscription service like Rhapsody or Napster?

  • http://www.mathewingram.com/work mathewi

    I don’t think that’s really how it would work, Stephen, but it’s a nice idea.

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  • http://www.changemod.com robojiannis

    I wouldn’t call it a dumb idea. Reznor also talks about the physical product.
    I don’t know about you, but I would gladly pay a 5$ tax to get original cds, instead of just the digital versions.
    I agree though, that not everyone should pay this fee – online people who download.
    In such a napster, count me in!

  • http://larryborsato.com Larry Borsato

    And why should I pay a tax on blank CDs to compensate artists in case I copy music – which I do not. And I believe that the tax now works out to about 100% since the price of blank CDs has dropped.

  • http://www.mathewingram.com/work mathewi

    That’s a good point, Larry — the private copying levy in Canada is a
    similar kind of tax, applied to a large group when only a small
    portion of that group engages in the behaviour that is supposedly
    being taxed.

  • http://www.changemod.com robojiannis

    I don’t see original cds as blank cds with music on them.
    Original cds are for me irreplaceable: the procedure of listening to the cd, while having the box in your hand, reading the leaflet, looking at the artwork. I like that…

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  • http://www.mathewingram.com/work mathewi

    I remember the good old days when people said the same thing about
    newspapers — and eight-track tapes :-)

  • HeavyLight

    I think Reznor is still sulking that his radical download plan to garner (more) fame and riches with Saul’s less than wonderful album didn’t go quite to plan. (Although he admits that there actually wasn’t much of one.)

    Maybe next time he’ll consider a lower quality version, free to download; a high-quality and/or lossless version for $5 and a special cd (or even better, vinyl) release, signed in the artist’s blood for $15?
    And then treat it like a software release and bribe loads of bloggers to write about it.

    These are early days for this new method of delivering paid-for music — Reznor and other musicians need to recognise that we’re all on a learning curve.

  • anonymous

    “Promises to Keep” by William Fisher (Harvard Law) proposed/evaluated a similar model in 2004.

    any comments on that model?

  • http://www.mathewingram.com/work mathewi

    It has all of the same flaws I mentioned in my post, anonymous — as
    Fisher himself admits in his book, what he proposes would create a
    giant bureaucracy as large or larger than the U.S. Patent Office
    (which is understaffed, underfunded and riddled with errors) which
    would determine what artists received and who was paid what based on
    some kind of ridiculously complicated Nielsen-style measurement
    formula.

    And all of it would be funded by a new tax on Internet access — which
    would have to keep increasing in order to replace the revenue that
    artists and rights holders would supposedly be “losing” as more and
    more people downloaded their music. It’s almost ridiculously complex,
    a kind of legal Rube Goldberg device designed to improve the lives of
    artists at the expense of everyone else. If I didn’t know better, I
    would think it was a long, elaborate satire, like Swift’s A Modest
    Proposal.

  • http://blogs.computerworld.com/a_new_business_model_for_the_music_industry Ian Lamont

    Trent for Congress!

    Seriously, though. This is my experience with the Radiohead and Trent Reznor album downloads: I am a fan of both, and paid for each album — $5 for the Trent Reznor/Saul Williams set, and over $9 for Radiohead’s In Rainbows. Both sucked. And that may partially explain why Trent is feeling frustrated now. Maybe if this was the best thing since Downward Spiral, word of mouth would have made more people willing to shell out cash for the download. But there wasn’t much of a buzz, and that’s why not as many fans downloaded or paid for it, IMHO.

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  • http://etherdust.com/ etherdust

    I think Reznor starts from a false premise, or is at least somewhat confused — very strange for him.

    It’s an album by an unknown artist. Really, who is Saul Williams? I’ve never heard of him before this story hit the news. So how many of those downloads were people grabbing the album to try it out, then coming back later and paying for it?

    Also, the album hasn’t been getting very good reviews, which likely only exacerbates the lack of paying customers. Given the chance, I’d download the album for free, then either pay something if I liked it or delete the files if I didn’t like it.

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  • http://www.mathewingram.com/work mathewi

    I would agree, Etherdust. I don’t know why he was expecting much more than about 20 per cent; I think for a virtually unknown commodity, that’s actually pretty good uptake.

  • Michelle

    ISP tax is an idea for music only. In which case only the people that want to download music through a service provider should be taxed. It should be an option that is offered to the consumer. This would help alleviate several problems; illegal downloading, eliminating the search for a viable music source, and payment options. Rather than entering your credit card information online, you will have the choice to add it to your current Internet Service Provider bill.

  • http://www.mathewingram.com/work mathewi

    Not a bad idea, Michelle. And those who pay are exempt from lawsuits
    over copyright infringement.

  • jake

    I think Trent used the word tax incorrectly and now you are imis-interpetering his idea. I don’t think he meant that people should buy it online and then also get “taxed”. I think that he meant you just never buy it in a traditional sense. If you download it then you pay for it eventually through your ISP.

    With all of that said. I think its still a dumb idea. Its just not that simple. If it was then ISP’s would already be blocking all of the illegal downloads in the first place.

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  • http://www.myspace.com/johnbarry John Barry

    trent should go and play music rather than sitting around trying to make money and his music might improve so he will create a larger audience!?

  • anon

    go back to city states, skip the middle men and deal direct…public to artist! i'd love to be selling my own cd's to my own fans at a huge gig and let the file sharing be a free way to promote shows, ep and labum launches ect. As a musician this model would suit me just fine, and with the internet being these days more popular than tv's, it is going to become increasingly easier to market your own music. This is what i would like to see, an increase in the music industry of creativity, especially big sellers, and a focus on the actual creation of the work of art and that includes cover, whether or not its vinyl or cd, merch, things like that. There needs to be a higher bar set in terms of musicianship, well especially in Australia…any large band out of there in a while has been very average…

  • http://www.myspace.com/johnbarry John Barry

    trent should go and play music rather than sitting around trying to make money and his music might improve so he will create a larger audience!?

  • anon

    go back to city states, skip the middle men and deal direct…public to artist! i'd love to be selling my own cd's to my own fans at a huge gig and let the file sharing be a free way to promote shows, ep and labum launches ect. As a musician this model would suit me just fine, and with the internet being these days more popular than tv's, it is going to become increasingly easier to market your own music. This is what i would like to see, an increase in the music industry of creativity, especially big sellers, and a focus on the actual creation of the work of art and that includes cover, whether or not its vinyl or cd, merch, things like that. There needs to be a higher bar set in terms of musicianship, well especially in Australia…any large band out of there in a while has been very average…

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