LOGICal eMOTIONs

$5, File Sharing Legalization, and You!

// February 24th, 2008 // Blog & Tech Items, Brain Dump

I’ve been working on a post in the background about how there are particular groups within the music industry who serve no benefit to the end user. How you’ve got entities like music labels who are pushing to get music out there yet at the same time are working with other groups to limit technology and essentially, limit quality and content. I’m not sure where this fit in with the other post so I figured I’d post it on it’s own..

The Songwriters Association of Canada recently came out with a ‘brilliant’ proposal to charge $5 to everyone who uses wireless or internet and make music file sharing legal.

Once I picked myself up off the floor from laughing so hard, I did some quick calculations and quickly realized that this may actually happen!

First we look at Canada – all ~34 million of us. For argument sake, lets say that 25% of Canadians have just a simple internet connection – all 8,500,000 of us. Let’s say you charge these 8.5 million $5 per month to try and legalize file sharing. Companies such as Rogers, Bell and Primus now share in a monthly revenue of $42.5 million dollars. Take this out over a full 12 months and we’re looking at $510 MILLION dollars per year collected for the songwriters of Canada. Now, what percentage does each company take as a collection fee for our poor songwriters, what does the number look like for anyone who has multiple internet connections and cell phones, and how do I get to be a songwriter?

Lets say that 20% of the $5 collected went to the company doing the collection, and we’ll say that there are 10 companies in Canada doing the collection. Can you honestly believe that Bell wouldn’t be pushing for this $5/mo from each of their subscribers when it could drop a cool $10,200,000 to the bank account (even based on my LOW estimations)?

Oh wait, got 2 cell phones that don’t even have music capabilities? Thanks for the $10. Having a hard time figuring out this ‘webmail’ thing let alone know what an MP3 even remotely is? Thanks for the $5 – the songwriters of Canada, and everyone else who has their sticky little fingers in it thank you.

Sure, at the outset, charging everyone $5 to legalize file sharing (wait – music only!) within Canada seems like a ludicrous idea, yet when you start throwing some $$ around, who wouldn’t want a cut of a $+510 million fee including songwriters, you, me, big business, and let’s not forget our friends in the government who will want their cut too..

this would present a major financial improvement for the music industry. Since the license fee would be paid by all internet and wireless accounts, the amount of income generated annually could adequately compensate the industry for years of declining sales and lost revenues, and would dramatically enhance current legal digital music income. Sales of physical product would continue to earn substantial amounts, albeit gradually decreasing.

Adequately compensate for years of declining sales? Wow. Next thing you know, GM will be looking to slap a $5 fee on your water bill when they realize that hybrids might be preferred over a gas-guzzling pig and it’s hurting their sales.

Wake up music industry. Perhaps the business model needs to be updated to meet the DEMANDS of the market, rather than trying to keep the market within your demands.

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