Let me play devil's advocate for a moment. Suppose we were talking about new artists who didn't owe their souls to the record companies. I.e., no larger record company would get a cent relative to their sales. Each artist would have his or her own "label" as my friend Allen does.

Now suppose the money from the tariff was doled out to labels according to sales.

The end result is that small audience artists would be paid for their work according to how many they sell.

That's the solution we want, right? Overall, it should cost about the same as tipping would cost if people would tip appropriately, except it would come out of media costs. Since the evidence collected to date is that people probably don't tip appropriately, this would get the desired effect without depending on "the kindness of strangers," as Blanche DuBois would say. Note that it didn't work for poor ole Blanche.

As I said, I'm playing devil's advocate, and I do have hope for some kind of voluntary payment strategy, but I'm not sure the proposed tariff doesn't have some merit.

Update: Within about 10 minutes of my posting the above, Matt edited his own entry to reply:

The problem with this logic is that what if there's artists with a cult like following on the net whose fans listen to the band's music digitally but fail to buy the band's CDs? How would we compensate them? I believe that if you're going to try to distribute funds collected through tariffs or taxes you're going to have to sample what people are doing on the P2P networks, the streaming radio sites, and 'private' FTP sites. And accordingly the tariff/tax should be on residential bandwidth consumption *not* the medium because there is such a large number of non-infringing uses of blank medium.

That's a very good point. I think it's valid to look at taxing residential bandwidth; it appears to be just as valid as taxing media. However, I don't think taxing media is as inappropriate as Matt implies, because as Matt points out a large part of the tax would be directed at portable MP3 players and the like. In my case, it would be by far the largest tariff I'd pay.

I almost think it's a decent idea to have a tariff including residential bandwidth as well as media. Better than relying on tipping, and arguably better than relying on CD sales in an age when digital copying is argually eating more and more into those sales. Still thinking about it.

The thing we need to keep in mind is that artists must be paid for their work or there will be less art. That's not an outcome anyone wants. So, even though no payment scheme is perfect, we need to find (at least) one and use it, warts and all. Arguably, nothing could be worse than the traditional one which still dominates.

Another update: Matt asks by email:

I agree. Artists need to be paid. But do you think it's fair that you're going to be in effect double taxed for your music collection? (I'm assuming your collection was legally purchased).

I think it's arguable that there should be such a tariff and if there was one, I wouldn't pay for music any more. I'd get it off the Web, paying for it with by means tariffs of my broadband connection and MP3 players.

I suspect everyone else would do the same thing. Artists would be paid, people could use the best and most convenient technology to get their music, and it would be a good world. The main drawbacks I can see are:

a) People who didn't use their bandwidth for music would be paying a tax for no benefit. On the other hand, some people would get more benefit than they would be paying for. That's life. It wouldn't be completely equitable, but it would arguably be a workable solution -- and there isn't one now other than the traditional one that few are happy with. (Britney Spears, Madonna, um... er...)

b) Some way would have to be set up of monitoring file transfers and attributing them to the appropriate artists. But I think that may not be a problem at all. File sharing services would be motivated to participate so that they could say they were helping the artists whose files they were transferring. There's no obvious downside from a file sharing services' point of view that I can see immediately, and there is definate marketing upside in being a "good neighbor" by helping artists get appropriately paid.

I'm not entirely convinced by all the above, but so far I think the tariff idea appears to have possibilities.
2:14:37 PM