Michael Geist
April 2005

Appeared in the Toronto Star, April 18, 2005

THE REAL THREAT TO THE MUSIC DOWNLOAD MARKET

The Canadian Recording Industry Association's (CRIA) legal campaign 
against music file sharing heads back to court later this week.  A 
three judge panel will hear an appeal of last spring's decision that 
denied a request for identifying information on 29 alleged file 
sharers due to insufficient evidence, privacy concerns, and doubts 
about proof of infringement under Canadian copyright law.  CRIA is 
likely to use the hearing to again argue that peer-to-peer file 
sharing is hurting Canadian artists and the industry, which at long 
last is seeking to develop fee-based alternatives such as Apple 
iTunes, Napster, and Puretracks.

Despite all the rhetoric, there remains much doubt about whether 
peer-to-peer is really responsible for declining sales.  The 
industry's own numbers suggest otherwise since the popularity of 
DVDs, changes in the retail distribution of music, and reduced retail 
pricing on CDs have all played significant roles in the industry's 
self-proclaimed woes (which themselves are not so woeful with sales 
increasing by more than 10 percent in the six months following the 
federal court decision last year).

Moreover, there is little doubt that Canadian artists' royalty losses 
have been offset by the private copying levy system.  The Canadian 
Private Copying Collective has collected approximately $120 million 
over the past five years with much of that revenue earmarked for 
Canadian artists.

While CRIA has argued that the private copying levy was not intended 
to cover music downloading those claims ring hollow in light of 
recent statements and collection practices.  Last month, the industry 
acknowledged to the U.S. Supreme Court that users have the right to 
copy their CDs in order to listen to the same songs on devices such 
as the Apple iPod.  Given that $30 million was collected from 
Canadians last year, it must surely have been paid for something 
other than activities already permitted under the law.

In fact, the real threat to fee-based alternatives in Canada does not 
come from the peer-to-peer systems.  Rather, Canada's copyright 
collectives are poised to kill the nascent industry by demanding the 
creation of a new iTunes tariff that would require music download 
services to surrender at least 40 percent of their revenues to the 
collectives.

...

http://www.michaelgeist.ca/resc/html_bkup/april182005.html



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