Music cartels propose piracy surcharge on ISPs

“Having failed to stop piracy by suing internet users, the music industry is for the first time seriously considering a file sharing surcharge that internet service providers would collect from users,” Frank Rose reports for Wired.

“In recent months, some of the major labels have warmed to a pitch by [consultant on digital strategy for three of the four major music labels] Jim Griffin, one of the idea’s chief proponents, to seek an extra fee on broadband connections and to use the money to compensate rights holders for music that’s shared online,” Rose reports. “‘It’s monetizing the anarchy,’ says Peter Jenner, head of the International Music Manager’s Forum, who plans to join Griffin on the panel.”

“Griffin’s idea is to collect a fee from internet service providers — something like $5 per user per month — and put it into a pool that would be used to compensate songwriters, performers, publishers and music labels. A collecting agency would divvy up the money according to artists’ popularity on P2P sites, just as ASCAP and BMI pay songwriters for broadcasts and live performances of their work,” Rose reports.

“In a 2004 white paper, the Electronic Frontier Foundation called for it to be applied to file sharing, but the Recording Industry Association of America immediately dismissed the proposal,” Rose reports.

“Things are different now. ‘The labels are beginning to like the idea of an access-to-music charge,’ says Jenner, who once managed Pink Floyd and the Clash, ‘because they’re increasingly aware that their current model is broken.’ U.S. music sales, which peaked in 1999 at nearly $15 billion, dropped to $11.5 billion in 2006. Last year’s figures are still being tallied, but with CD sales cratering and online sales overwhelmingly dominated by singles, the only question is how far they’ll fall.”

Full article here.

The music industry’s current model is not broken, it’s being fixed — by Apple. The old model was an illusion. The music cartels grew fat on artificially inflated profits from CDs because they overcharged for bundles (albums) for years.

Massive amounts of undeserved revenue is a broken, unsustainable model that the marketplace will eventually correct. Now that people can buy music a la carte and choose exactly what they want and not be forced to pay for music they don’t want, the music cartels think something is broken. The only thing broken is their stranglehold over consumers.

Now that they actually have to develop product that consumers want to buy, instead of forcing people to buy a load of stuff they don’t want in order to get a few good nuggets, they’re shocked. “Hey, where’d all of our free money go?!”

Well, too damn bad. That extra bundling cash is gone forever, boys. Now you have to work for your money. Imagine that.

Next up: The cable companies who massively overcharge consumers for bundles instead of allowing their customers buy only the channels they want. They’ll be shocked, too.

As for the main issue of this article: trying to correct the issue of the theft of music, should ISPs – meaning all of us – have to pay a surcharge for piracy?


  1. A surcharge would only encourage more piracy. If I’m being forced to pay for what other people are pirating, then I’m going to pirate my ass off to get my money’s worth. ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

  2. I think it is a great idea. I work with a few of the brutal Torrent abusers. They disgust me. Everything on TV, Every Movie, Every Video Game Every bit of Music is stolen everyday by them. I go about my normal routine of paying. The only reason these Bit Torrent **ckers get their crap for free is because there are schleps like me that legitimately pay. I say ISP measure their traffic. When you see they are loading 60 gig per month send them a bill for obvious illegal activity! They are a bain to society and they should be made to pay at least for their traffic jam they make on the net with their stolen material.

  3. So, If in exchange for being forced to pay a $5 a month “piracy surcharge” on my DSL connection, I will get free reign to pirate any/everything I want on the web?

    Am I alone in thinking this will make matters worse, not better for the rights holders. It would be giving pirates free reign.

    Another dumb idea from an industry that seems to have little left but dumb ideas.

    — Hano

  4. Worked well for Canada with the surcharge for blank CDs [/sarcasm].

    Actually, thanks to that we *do* have the legal right to copy music. But that’s only because the music industry here was (again) thinking old school when then won that judgement in the late 90’s, and didn’t consider the internet. They won’t make that mistake again.

    Of course, most of the money from the levy never makes it back to the artists that the levy was supposed to compensate in the first place! Lying scumbags…

  5. It’s extortion (the practice of obtaining something, esp. money, through force or threats) plain and simple. I do not listen to pop music, which constitutes most of the music being pirated, And I’m supposed to cross your greedy music industry hands with a $5.00 a month surcharge to compensate you for what you wrongly consider to e your just due? No way in hell. I’ll fight this by all means fair and foul and I’ll be happy to join with others who wish to do so.

  6. That ISP surcharge is a great idea. Then I will feel justified to download everything I have ever wanted and then some because I have already paid for it.

    I think Trent Reznor has the right idea in offering his latest music for a very reasonably priced high quality download and then offering some unique collectible packages. The ultra collectible autographed $300 package sold out in no time and in a limited release netted $750,000. Imagine if U2 offered an autographed release or the Stones. Reznor has always been a musical visionary, now he’s shown his marketing genius as well.

  7. ISPs won’t go for it as they are already under pressure from consumers for their charges. It can only happen if it is passed into law, which won’t happen either. The music industry is grasping at straws….

  8. This is such an insane article, I can’t even make a reasonable comment.

    I think the MDN take is right on.

    The industry has a legal option. Continue sueing the hell out of consumers. That will build a lot of good will with customers…NOT!

    The old model is dead. Better get with the new one fast!!!

  9. Quote: Next up: the cable companies who massive overcharge consumers for bundles instead of allowing their customers buy only the channels they want. They’ll be shocked, too.

    Wrong. Cable companies, satellite companies have to bundle because there are stations that noone will buy unless they are forced on you. They are made to bundle them by the channels themselves or they can’t carry them on there network then they get bitched at for not carrying it. TWC my former employer had an issue with NFL channel where NFL was trying to dictate which pay tier TWC could put NFL Channel. I don’t know the outcome but the channels have alot of power in this. Alot of the channels are owned by same company so they might have a very popular channel and a not so popular channel. They require the not so popular channel to be offered on a certain tier or they can deny you the popular channel. If the cable company could do as they please they would let customers have whatever channel they want. And the price is derived by many factors. The cost that the cable company pays to the channels themselves, operating cost and the fact that they ARE a business and have to earn a profit. And yes I used to work for cable company so I’ve seen the other side of things.

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