The music industry's extortion scheme.

Arts, entertainment, and more.
April 25 2008 7:03 AM

The Music Industry's Extortion Scheme

The record labels want you to pay a tax on music. It's not as horrible as it sounds.

Illustration by Rob Donnelly. Click image to expand.

What would you do if a bully—let's call him "Joey Giggles"—kept snatching your ice-cream cone? OK, now what if Joey Giggles then told you, "If you pay me five bucks a month, I'll stop snatching your ice cream." Depending on how much you hate getting beaten up, and how much you love ice-cream cones, you might decide that caving in is the way to go. This is what's called a protection racket. It's also potentially the new model for how we'll buy and listen to music.

Let's back up for a second. Four companies (Universal Music Group, Warner Music Group, Sony BMG, and EMI) control a staggering 90 percent of all record sales in the United States, and they're hopping mad. CD sales are in free fall, and the recording industry's revenues have shrunk from $15 billion to $10 billion in less than a decade. Instead of blaming themselves for failing to embrace the Internet soon enough, Big Music has pointed the finger at piracy, shaking down scofflaw MP3 downloaders with capricious, multimillion-dollar lawsuits. This has not strengthened the record companies' position—at this point, they're losing money and everybody hates them.

Advertisement

Now Big Music is mulling the Joey Giggles approach. Warner Music Group is trying to rally the rest of the industry behind a plan to charge Internet service providers $5 per customer per month, an amount that would be added to your Internet bill. In exchange, music lovers would get all the online tunes they want, meaning that anyone who spends more than $60 a year on music will come out way ahead. Download whatever you want and pay nothing! No more DRM! Swap files to your heart's content—we promise, we won't sue you (or snatch your ice-cream cone)!

Michael Arrington of TechCrunch has condemned this idea as a "music tax" and "the music industry's extortion scheme." Though the proposal is not technically a tax—rather, it's a call for "voluntary blanket licensing agreements"—it will certainly feel like one. And instead of paying for roads, schools, and bombs, you would be helping to keep record executives in cigars and the finest silks. As Arrington argues, there is good reason to believe that this huge pot of money will turn the music industry into a lazy near-monopoly that lives off of fat royalty checks. Once the majors get this guaranteed revenue stream, won't they just spend all their time scheming to increase the fee from $5 per customer per month to $7.50? There's also the small matter that not all Internet users listen to or download popular music. If this plan somehow goes through, millions of moms and dads who pay for Net access so junior can browse Britannica Online will find that they are subsidizing the hedonistic lifestyles of America's most-tattooed singing sensations.

Despite all the downsides, something like the music tax simply has to happen. Most of us don't want to steal music. But it takes a saintly person (like me) to jump through hoops to pay for something you can get for free. I use eMusic and Amazon.com, which both offer DRM-free MP3 downloads. Yet cheapskates galore still have their Limewire and BitTorrent and whatever future file-sharing tools savvy Web guerrillas haven't even dreamed up yet.

That's why piracy can't be stopped. Meanwhile, artists aren't being compensated in a sensible way. Sure, some musicians will make a living by playing live shows and selling T-shirts. A massively popular band like Radiohead can give away its music and still make millions. But plenty of other artists will no longer be able to make a living in the music business as royalties dry up, which will leave our culture a little less vital and a little less fun. What we need is a reward system, one that could eliminate middlemen and encourage a massive upsurge in creativity.

TODAY IN SLATE

Justice Ginsburg’s Crucial Dissent in the Texas Voter ID Case

The Jarring Experience of Watching White Americans Speak Frankly About Race

Here’s Just How Far a Southern Woman May Have to Drive to Get an Abortion

The Most Ingenious Teaching Device Ever Invented

Marvel’s Civil War Is a Far-Right Paranoid Fantasy

It’s also a mess. Can the movies do better?

Behold

Sprawl, Decadence, and Environmental Ruin in Nevada

Space: The Next Generation

An All-Female Mission to Mars

As a NASA guinea pig, I verified that women would be cheaper to launch than men.

Watching Netflix in Bed. Hanging Bananas. Is There Anything These Hooks Can’t Solve?

The 2014 Kansas City Royals Show the Value of Building a Mediocre Baseball Team

  News & Politics
The World
Oct. 20 2014 1:50 PM Why We Shouldn’t be Too Sure About the Supposed Deal to Return the Abducted Nigerian Schoolgirls
  Business
Moneybox
Oct. 20 2014 2:16 PM Even When They Go to College, The Poor Sometimes Stay Poor
  Life
Outward
Oct. 20 2014 2:19 PM A Procedural Rule Could Keep Gay Marriage From Ever Reaching SCOTUS Again
  Double X
The XX Factor
Oct. 20 2014 1:10 PM Women Are Still Losing Jobs for Getting Pregnant
  Slate Plus
Tv Club
Oct. 20 2014 7:15 AM The Slate Doctor Who Podcast: Episode 9 A spoiler-filled discussion of "Flatline."
  Arts
Brow Beat
Oct. 20 2014 2:39 PM Gwen Stefani Does Her Best Rihanna Impression on New Song
  Technology
Future Tense
Oct. 20 2014 1:51 PM Will Amazon Lead Us to the Golden Age of Books? A Future Tense Event.
  Health & Science
Medical Examiner
Oct. 20 2014 11:46 AM Is Anybody Watching My Do-Gooding? The difference between being a hero and being an altruist.
  Sports
Sports Nut
Oct. 20 2014 10:23 AM Where I Was Wrong About the Royals I underestimated the value of building a team that’s just barely better than mediocre.