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Is the Music Tax Inevitable?

April 10th, 2008 · No Comments · Music

US music market shares, according to Nielsen SoundScan (2005)Image via Wikipedia

As I predicted last year, the RIAA, lead by Warner Music Group, continues to resist changing market places. They are now lobbying Congress heavily for a new Internet Tax, just like they did a few decades ago to place an additional tax on blank video tapes followed a decade later by pushing for a tax on blank CDs. These bohemian music companies are avoiding the inevitable demise of their current business model every way they can.

What does this mean? Expect a strong pitch for a $5 per user tax on all Internet access. The big boys are going to stay alive by taxing your Internet use and will be giving you unlimited rights
to share music online.

Where will this new tax money go? Looks like it will help to defray the drop in their revenues $5 billion, or some 33%, in less than 10 years. Ok, maybe defray is a bit of an understatement.

According to Jim Griffin, a music industry veteran, the net result to the big music companies will be a pool as large as $20 billion annually, which will be distributed to artists and copyright holders.

Hmm, let’s see. They’ll double their revenue, they’ll be bigger than ever before, and they’ll share the money. According to musicians who have contracts with these same self-serving recording companies, the only way the musians make any real money is by performing at concerts. I guess they haven’t been sharing a whole lot of the $10 billion annual revenue they’ve currently got.

And how about the little guys? The musicians we see on American Idol, or the band in the garage next door? They find it almost impossible to brake into the music ‘biz thanks to these same self-serving huge music companies. They don’t stand a chance to share in any of this revenue.

It looks like their stranglehold on the entire music business will be continued, maybe even strengthened. Not sure there’s a better solution on the horizon. Scary.

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