James Delahunty
11 Oct 2005 16:04
Japanese record labels are repeating what music labels have tried in several places around the world; pushing for a tax on iPod music players. A similar request in Canada for example, was shot down by an appeals court. Basically the tax is imposed on the sale of MP3 players to compensate rights holders for "possible piracy". It is very similar to the blank media levy paid in many countries like Finland. However, asking for a tax on iPod sales is a way for music labels to try forcefully receive revenue from the sale of iPods.
If you have been keeping up to date with news on the music industry, you will know that there has been a war of words between Apple CEO Steve Jobs and several major record labels. Jobs accuses them of being greedy for demanding a price hike of music downloads provided by iTunes. The labels are pushing for variable pricing methods, whereas Apple simply prefers its 99c (79p) policy on all tracks available.
Warner Music Group CEO Edgar Bronfman Jr. hit back at Steve Jobs' comments and also said it was unfair that music labels didn't get a share of profits from iPod sales. Bronfman believes the labels have a right to a cut because the label's music "promotes the iPod". Apple doesn't make significant profit from music downloads, yet artists' managers recently complained about the royalties that artists receive from music download sales.
However, the amount of money that artists receives from music downloads has nothing to do with Apple, it's between the artist and the label. The labels justify paying the artists only a few cents by saying they've had to "invest in anti-piracy initiatives". Now record labels in Japan are seeking about 2-5% of the retail price of iPods. Whatever way you look at it, Apple still holds the advantage.
The labels already agreed to Apple's proposals and thanked the company for providing a legitimate store that could compete with online piracy. iTunes holds the majority of the music download market, having sold hundreds of millions of downloads around the world.
Source:
Macworld