Recording Industry’s Next Target: iPod
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If anyone thought recording companies couldn’t do anything as dubious as filing lawsuits against their own customers, they are officially wrong. The Dutch have proposed a tax on all mp3 players to offset the losses from music piracy, which they will redirect primarily to the recording industry. At first glance, you might think the 3.28 EUR ($4.21) levy doesn’t sound too harsh, but that’s actually the going rate
per gigabyte.
Let’s see what this does to device prices. Flash based players won’t be hit too hard since most are below 1GB. But a typical 20GB iPod costs $299; after $84 in new taxes, the iPod is 22% more expensive. Or try one of the new iPod Photos at $449 for 60GB; after a mere $253 in new taxes, it is 36% more expensive. Although Apple doesn’t have them yet, 100GB players are just arriving on the market for about $450. It doesn’t take a genius to see the new tax will just about double the cost. As the price of these devices decreases and storage increases, this tax could easily cost customers more than the player itself.
Unless the European Commission intervenes soon—as in the next few months—the new law will be passed. And the recording companies will be really excited.
Until neighboring countries follow suit (if they do), citizens of the Netherlands will still be able to take a road trip and buy a cheaper iPod elsewhere, given that they sneak it past customs. Besides giving shoppers a warm feeling of vindication, the trip even ought to be cheaper than paying a ridiculous tax. Of course, this has the electronics companies of the Netherlands worried. With this sort of burden placed on Dutch mobile music, consumers won’t be so hot to check out new devices, at least in their own country. It’s possible that related companies won’t be in any hurry to ship players or other electronics there. Experts are afraid that the Netherlands may lose considerable IT business.
Needless to say, people who aren’t even in the Netherlands are disgusted. Most seem to agree that the tax is ridiculous. It’s hard to tell what the tax is even compensating for. Is it a tax for loss that has already occurred since the days of Napster (or since the time of audio cassettes or bootleg vinyl)? In this case, everyone who is in the market for an mp3 player is responsible for helping recording companies to recoup estimated losses, whether they downloaded a terabyte of songs or didn’t even own a computer.
Or is this tax for loss that they predict will occur? Assuming that all people buying mp3 toys are music pirates could be insulting to the many who only use their gadgets to hold iTunes or other songs they bought online, rips of the CDs they own, and other legal things like their own recordings and files they are transferring.
Naturally, consumers won’t care where the tax is going. What seems extraordinarily foolish about this idea is that after owners of mp3 players pay an exorbitant surcharge for every gigabyte of storage in the name of music piracy, they will feel completely entitled to pirate music. And what’s to stop them from thinking they just bought a lifetime pass to share and download all they want from Kazaa or mIRC? Why should they buy from iTunes and give the industry a second serving of royalties?
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