New Canadian Levy Doubles Prices of Blank Discs and Tapes

Imagine that you are a Canadian with a mid-sized accounting business. You have tons of data to keep track of, and have found the recordable CD to be an excellent form of storage: convenient, reliable, and cheap---until New Year's Day, when the cost of blank discs suddenly doubled. You may not have the slightest interest in music, but one of your basic costs of doing business has just skyrocketed because someone, somewhere, has allegedly made an illegal copy of a commercial music CD.

Canada's new levy on recordable media, including DATs and cassettes, is the result of persistent lobbying by the Canadian Musical Reproduction Rights Agency (CMRRA), a music-publishers trade organization, and four allied music-industry organizations. They successfully convinced legislators in Ottawa that piracy---as in "home recording"---is an epidemic in Canada, as the Recording Industry Association of America periodically claims is the case in the United States.

The extent of the epidemic is largely a matter of conjecture. No one has any reliable figures on how much money, if any, music publishers lose to private recording. The argument that music publishers lose large amounts of revenue to home recording has been presented often to legislative bodies around the world, with varying degrees of success. When the cassette tape gained popularity in the 1970s, the recording industry sought and obtained levies on blank tape, which went into funds from which they could draw to make up for income "lost" to home recordists.

The Home Recording Rights Coalition has fought the music industry on this every step of the way, also with varying degrees of success. One small triumph is the official recognition, both in the US and Canada, of home recordists' fundamental right to transfer music they already own to other media---provided the transfer is not for any commercial purpose. A CD copied onto a cassette tape for private enjoyment by the disc's owner falls within the "fair use" provision of copyright law.

The advent of high-resolution digital recording has upped the ante considerably. In the US today, "audio" CD-R discs cost six to ten times as much as "computer" CD-Rs---despite the fact that they are essentially identical---because the recording industry managed to leverage some lawmakers into adding a surcharge. The cheaper computer discs can be used in consumer-grade CD recorders, according to some audio hobbyists, who claim to have found various ways to work around the identifying "flag" embedded in audio CD-Rs that enables recorders to operate. Computer users don't have to try to fool their machines because duplicating a disc on a computer equipped with both CD-ROM and CD-recorder drives is almost as easy as making cassette copies on a dubbing deck. (This information, of course, is not to be taken as an endorsement of this practice.)

CD "burners," as they are called, have been common optional equipment in the computer world for years, and are now available for $200-$400 US, considerably less than a consumer-grade audio CD recorder such as the $649 Philips CDR880. Despite the computer's market penetration and the prevalence of a medium within it that could be used illegally, the recording industry didn't sit up and take notice until CD recorders and twin-transport CD dubbing machines came down in price and began to win acceptance with consumers. David Baskin, president of the CMRRA, put it this way: "The arrival of twin-bay audio-CD player/recorders is a serious concern. We expect to see the sales of blank CD-Rs explode with the availability of inexpensive recording equipment." Baskin's organization, like its US counterpart, expects people to "pay for the privilege" of copying CDs whether they do so or not.

The new levy---as much as $2.50 Canadian per disc and $1.50 per cassette--- is being imposed without regard for how the discs and tapes will be used. It is also being imposed without a plan to collect the fees or pay the beneficiaries. The Canadian Copyright Board won't take up those issues until sometime in May. Until then, and probably for a long time afterward, all users of blank discs and tapes will pay for the misbehavior of a few bad apples. The great irony in the new law is that it won't affect offshore pirates one bit. They will continue their tawdry mass-production business as usual. Resentful consumers, however, having "paid for the privilege," will be more likely than ever to violate copyrights. That's the recording industry's self-fulfilling prophecy.

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