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Downloading surcharge: The right answer for consumers?

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Sunday, Mar 30, 2008

The latest strategy by major labels to monetize downloads comes from one of their consultants, Jim Griffin, who’s proposed that the Internet providers add on a service charge to their customers. The money would then go to the labels and everyone will be happy, right? Not exactly.


The Tech Crunch site calls this plan ‘extortion’ on the part of the labels. A bit harsh but maybe not too far off the mark. Since they found that they’re not selling enough albums and singles online to make up for the overall loss of sales (especially of CDs) and obviously since the RIAA lawsuits are meant to be a symbolic deterrent, they need to come up with another scheme to make money.
  
A similar idea was floated with a $5 charge by the Songwriting Association of Canada earlier this year and met with a mixed response, just like the newest proposal is getting.


So is this the right idea of how to save a sinking industry and make music consumer-friendly too? Well…


PROS


  • The industry stands to draw in tons of money from this. Since they’ve acted like such a bunch of stupid, self-defeating villains for years now, that might not mean much to most people reading this but the plus that comes out of this is that they MIGHT give up really, really dumb hateful schemes. Again, it’s no guarantee but it might make them less likely to go these other routes if they’re raking in cash.
  • If that comes to pass, that means that DRM schemes to tie up music and RIAA lawsuits might go away if not disappear (hey, we can dream, can’t we)?

CONS


  • The above two items are wishful thinking at best.
  • Everyone with a Net connection pays for the new service charge even if they’re not downloading music, which means that support the big labels no matter what. Everyone loves a new tax, right?  Just ask a Republican…
  • We have to assume that the money gets fairly collected and distributed by SoundExchange, who are the greedy morons that are now helping to price out of existence most Net radio stations.
  • As the Tech Crunch article points out, what’s to stop the labels and Net providers from jacking up the prices whenever they like if it’s part of the standard service?  Zero. What’s worse, most of us won’t notice unless some watchdog points it out for us or if the increase is so much that many people start to wonder and search their bills to see what’s going on.
  • In the case of the RIAA lawsuits, there have been a number of complains that the money collected was not going to the artists. Can we assume that they’re be just as charitable with the service money they collect from Net providers?  Don’t bet on it.
  • The Tech Crunch article also makes a good case that such a windfall will make the labels get lazy and not try to innovate, keep up with technology and make a consumer-friendly experience, all of which got them into such trouble before.

Obviously, I’m pretty skeptical about this plan. The ISP’s are going to fight it no doubt as they don’t want to be the ones to pass additional cost onto the consumer. I also wonder if the labels have enough clout to put this through. Since they don’t have other ideas bearing enough fruit, desperation might force them to pursue this. If they get their way, get ready to pay up more for your Net access, even if you’re not one of those evil downloaders that the RIAA has been hunting down otherwise.


UPDATE: Griffin has now had to back-peddle and say that the ISP surcharge is just one of many ideas being floated around now.  Keep floatin’ ‘em…

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