Back in 1997, after the advent of the blank CD, the Canadian government, through the Copyright Board of Canada introduced a special levy (tax) that was charged to the importers and manufacturers of blank CDs. The money was collected, and supposedly disbursed, by the non-profit Canadian Private Copying Collective (CPCC).
The idea was based on the belief that these blank CDs were used to copy music to and that as a result the musicians were losing out on their share of sales and royalties. The blank CD levy was meant to alleviate that buy disbursing the collected tax via a methodology created by the Canadian Private Copying Collective.
While there have been accusations of the money being distributed to favored the bigger name artists the organization has, as of September 7, 2007, distributed over $100 million.
Then in 2005 the Copyright Board decided that what was good enough for blank CDs was also good enough for those new fangled iPods and other MP3 media player. The proposed levy broke down like this
- $2 for players with 1GB or less of space
- $15 for players with space of up to 15GB
- $25 for players with space of 15GB and over
The Canadian Federal Court of Appeal overruled this decision by the Copyright Board of Canada in 2005 but this didn’t stop them from trying again which they did in 2007 when the CPCC asked the Copyright Board of Canada to re-introduce the levy but this time on the memory used in the media players rather than the players themselves.
While this attempt also failed in late 2007 it seems that the CPCC is back at again but with an expanded target. Instead of going after just the memory inside of media players the CPCC wants a levy against all blank memory cards. These are the same cards that you not only find in media players but also smartphones and digital cameras.
Prof. Michael Geist shows how this would work and the financial impact such a levy would have:
50¢ for each electronic memory card with 1 gigabyte of memory or less, $1.00 for each electronic memory card with more than one gigabyte of memory but less than 8 gigabytes of memory, and $3.00 for each electronic memory card with 8 gigabytes of memory or more
The financial impact of the levy would be significant. A 2GB SD card currently sells for about $6.00 and this would add an additional dollar or almost 15% to the cost. Given that the levy would remain static (or even increase) but the costs of SD cards aredropping by roughly 30% annually, the percentage of levy in the overall cost would likely gradually increase over time. Moreover, music plays a small role in the use of memory cards. A recent report indicates that digital cameras are the primary market for SD cards with smartphones the second biggest (and fastest growing) market. Music is a small part of the equation, yet the CPCC is demanding payment for every memory card sold in Canada regardless of its intended or actual use.
Man, talk about doing anything to screw the consumer in order to get your pound of flesh.