Charging users to own the content isn't the only way producers of the content have to make money. There is also advertising and even donation models that do work for some. A good analogy is the advent of commercial radio or television. The creators of radio or television content didn't start demanding that users pay for their product. Rather they developed an advertising sponsorship model to fund their work.
A pay-to-own model can still work for providers of media content. But it will only work if the price to own that content is low enough to make it worthwhile for the consumer to buy it from a legitimate source. The reality is that any digital content can be reproduced and spread at virtually no cost. It simply isn't the equivalent of stealing a bunch of CDs or DVDs. On top of that, you can't regulate your way to a monopoly on the internet; digital information is too easily manipulated and spread.
Many will probably dispute this and point to the emerging monopoly on MP3s that Apple iTunes has. Sure a company like Apple has a growing monopoly on MP3 devices, offering the possibility of a monopoly on the distribution MP3s. This has definitely bolstered the pay-to-own model through iTunes. Eventually, I'm sure as the pay-to-own internet distribution models mature there will be a push to eliminate CDs to tighten up their monopoly on distribution. But inevitably there will be someone out there that will find a way to get past the barriers they put up, and much of that protected content will find it's way on the internet and will be distributed for free.
There is now a strong hacking/cracking culture committed to keeping as much content as possible free on the internet. Free content has its advantages, it more readily allows for the free flow of information and ideas. Take public libraries as an example. It can be argued that libraries deprive many authors of a great deal of revenue. But fortunately there is a strong culture of promoting the free flow of ideas amongst authors and in the publishing industry - there has to be free access to books since everyone should have access to the ideas they promote. This idea of knowledge being accessible by all was not always promoted. In various stages knowledge and writing was monopolized by a priestly, scribal, or bureaucratic class, much like trade guilds monopolized the trade and know-how of a specific craft. One of the main things that brought about a literate culture with a free flow of ideas in Europe was the printing press which made producing books much less expensive.
Article comments
— go to most recent comments1 - Deano
Canada has the highest per capita rate of illegal MP3 downloads in the world
It should be noted that legal online music downloads were utterly unavailable in Canada prior to aabout two or three years ago. You couldn't purchase off of iTunes in the US at all (the system wouldn't allow it), so for an appreciably lengthy period of time, anyone interested in buying and downloading legal music...just couldn't do it.
Throw in the fact that Canada is one of the most wired countries in the world, with a much higher % of households having high-speed Internet connections, and its is unsurprising that illegal downloads were fairly high.
2 - Mike Z.
"Canada's failure to modernize its copyright laws "
WRONG! it is the world's failure to modernize its copyright laws.. Canada as usual is ahead of the pack!
3 - Ryan
It might interest you to know that a study that just recently concluded found that the heavyest downloaders also are the biggest buyers of said music.
It might also interest you to know the USA is following the same path germany did so many years ago... "Peoples Republic Of Bush"
4 - Mack Collier
Nettwerk takes on the RIAA
5 - Amanda
As a Canadian, I have not bought a CD since I was 15, I also did not get the internet until I was 20. The sells of CDs are down because the prices are to much, when you can listen to the same music on the radio for free....
6 - Riz-Man
I guess after a while you get tired of paying $20 for a CD that has only one good song on it.
7 - Wes
Why would I buy a CD when I don't listen to CDs? I listen to MP3s.
On the flipside, in the 90s why on earth would I have bought vinyl when I enjoyed listening to CDs better?
If there's a loss in revenue it's in good part due to the recording industry not getting with the times.
8 - R
One thing to mention, that the Canadian Government charges us over 50 cents per blank CD as a "levy" to help "canadian artists". This levt, collected by the government make our blank CD's (even those used for Data) twice the price they are anywhere else AND all the monies collected (for over 5 years now) have NEVER made it to any artists!!!
Who's the pirate eh?
9 - James
These people don't realize that even those who illegally download end up spending $100's of dollars on computer related products just to keep up with technology.... this year i've spend alone $1600 CAN on computer hardware and peripherals (lcd monitor, graphics card, sound card, many harddrives, blank dvd's, etc), talk about a spinoff industry.
Oh yeah, Canada is a great place, you can smoke pot freely, download without being afraid of a lawsuite or something and if your gay you can even get married, HAH
ITS GREAT!!!
10 - John
to quote James yes it is great... for the pot smokeing and downloading... if i remember the downloading law of canada or at least Ontario it states your legaly aloud to download *anything* music or software as long as you do not upload... *send it to others* if i remember correctly it's only ilegal to send not recive wtf!? hail canada lol!and yes i to spend $100's of dollars on computer parts ie harddrives jsut to make it so i have enough space for all this hmm "pirated" software music?and as for blank cd's? yes they cost to much i can get a spindel of blank dvds for almsot the same price as cd's and dvds hold alot more wtf. as for music pirateing what about movies :P did u know that working for blockbuster u get 10 free movie OR game rentals A WEEK! not a month a WEEK! HMM i wonder where the dvd quality movies on said bit torrent websites come from hahahaha....
11 - RedTard
If the distributed system is so great then why don't you quit downloading Britney Spears and download those local artists you all brag about so much. You could run a free music and software system that is so much better than the current one you could put them out of business. Oh wait, you can't you're just making excuses for theft.
If you can't expect to make money off of intellectual property then you will need to compete 12 year olds in third world countries for manual labor jobs. It funny when you steal a song, not so funny when they steal your idea and your job, put your company out of business, and produce the product at 10% of the price overseas. Heres to sweating away for 12 hours a day sowing shoes together (but at least you have free music!)
12 - Steve
The great thing about the Internet is, I can hear clips of all the songs on most albums first before I buy the album, to see just how many good songs there are on it. And if there are only one or two, I can buy those tracks legally on the Net for a buck or two. With savings like that, who needs to steal anything???
13 - Wolfgar
"One thing to mention, that the Canadian Government charges us over 50 cents per blank CD as a "levy" to help "canadian artists"."
OK, I know there's a levy here in Canada, but 50 cents per CD? Is that on top of the cost of the CD (as in 30 for CD + 50 for levy + 80 total)? Or is it 50 cents total, including the levy. Oh wait, I'll answer. Neither. You're just buying from the wrong place. I pay 20 cents per CD here in Canada($10 for a 50 CD spindle), which includes the small levy (not sure the percentage, but certainly not 50 cents). You might wanna shop around for a better price per disc.
14 - Turbo_Glide
I agree totally with original statement :)
In addition: Internet initially was handed over to Educational Institutions [universities, schools, private learning centers, etc.] by U.S. DOD “Department of Defense” due to lack of any real security for their desired use. In turn it became open media to expand learning for everyone. Yes, the whole planet!
No matter how much you try to patch the Internet the core code doesn’t provide for any real security. Every node [PC, server, database, computer] is responsible for “their own” add-on security and content that they wish to “share” with the rest of the world. Inherently this idea has sparked a supposed war on this free flow of information and mostly since AOL and Microcrap [Microsoft] came on the scene. To intrude or damage anyone’s node is to be disrespectful and can be cause for getting nuked, as the recording industry and big business has done on continuous basis to regular Internet users.
Big business seems to think they can control people’s thinking and ideas just by trying to force rules. Wrong! Such Archaic thinking is becoming obsolete and is detrimental to survival of all humans if not this whole planet. Worst offender for such primitive thinking in patents, copyrights, laws, policies and predatory tactics is the USA and anyone under their wing. Big business has no problems stealing ideas from people, why should they get respect?
History tells us people were ruled [in order] by: nature, greed, warlords, religion and lastly big business. Big business control will come to an end. Hello time of cooperation, sharing, advancement and ergonomic living ;-)
Final answer: If it’s available on the Internet it’s free, if it can be copied it will be. If recording industry wants to make more money then let ‘em get off their asses and do more concerts.
How do you like them apples, eh?
coder / fishnet (1981) / PHD, MD, QC
Proud to be Canadian
15 - Zcold
I buy everything I like. I download it first.If its good I get the money and buy, if not, I trash it. Im not made of money, cant buy everything..so I buy what I really like..
Internet is the future, why not subscribe to simpsons instead of watching it on tv with lousy adds.. : and after...transfer it to your ipod or psp.etc..
16 - Russell McOrmond
There is a lot of misinformation about the situation in Canada. First, unauthorized sharing is not legal in Canada. CRIA member BMG lost their case because they did not provide enough evidence to get a court order to disclose the names of the people aleged to be sharing files without authorization. It is our stronger privacy laws than other countries, not anything in our copyright laws, which made the largest difference.
Most countries have an exception to copyright for radio which says that communicating music to the public doesn't require permission, it only requires a flat fee payment at a rate set by the government. Canada has this as well, but also a flat fee for "private copying" of music which makes some of the unauthorized downloading non-infringing as long as the music isn't further shared.
CRIA's statistics are largely bogus, and their false claims that Canada is a "Safe Harbour" for unlawful activity is entirely a lobbying strategy -- not something based on reality.
To find out more, and to get involved in opposing the attacks on our rights in Canada, please go to http://digital-copyright.ca/
17 - Ole_Curmudgeon
The music industries claims are false:
1. I would not buy 90% of the music [on vinal] I downl....Hhmm backup, if it was not aval via p2p;
2. I certainly will not pay the same price [more or less] for an electronic [more profit given the cheaper distribiton media] than I would a vinal disk.
It's like when MS Word was $500.00 a copy in the late 80's.....at that price I could not afford to pay for it, hence no profit loss; as well, by copying it, I was not buying the competions products....Hence no profit loss to MS and no profit to thier competitors.
The electronic industries claims of profit losses are extremely overstated and largely smok-n-mirrors.
Like GDubya, full of bull shite...
Adopt a pricing scheme in the .10 cents per song realm, you'll sell lots, and still make a tidy profit.
18 - D/Ler
I'm just curious, if we download american movies does that kind of screw over the american economy and not the canadian economy? because if it does i wont feel guilty, not that i did in the first place.
19 - Spontaneous J
In Canada, SOME stores chose to charge the Levy (IE London Drugs) but it's optional for a store to do so. None of the little asian computer stores I purchase my CDs or computer parts from have ever charged me the levy. Ironically the same goes for the stores return policy on software. Staples will never give you a refund on opened software, claiming it's illegal, but Costco has always done it, and still does.
Finally I'd just like to mention if anyone (in Canada) ever gives you flak for pirating music, just tell them that it's justifiable because that's what the Levy is supposed to cover.
God I love being Canadian.
20 - Ralphy
What I always find funny about the CRIA and their methods is calling the downloading illegal and those who do it pirates.
In the first link in this article it states:
"Last March, the Federal Court ruled music file-sharing on the Internet was legal and that neither downloading nor sharing digital music online infringes copyright."
If the courts find it legal than it must be legal and if they didn't have any evidence to prove it is illegal than it still is legal.
I think we should start spreading the truth about CRIA. If you look at their web site they state absolutely nothing about nude children or weapons of mass destruction. Because of this grievous error, by not stating the obvious, CRIA must be pedophiles and terrorists.
Start spreading the truth about these pedophilic terrorists. Tell everyone you see. Make signs. Phone your favourite radio shows. Help those loved ones that may work there without knowing their sick and twisted ways escape to a better life.
We must save the children from CRIA and we must save ourselves.
CRIA = pedophilic terrorists
We can't let them win.
21 - Blacksun
Look the industry is looking at this download thing all wrong... what they need to realize is downloading is exactly the same as the RADIO. (what is the difference as you can record off the radio too and HBO/SHOWTIME/STARS...etc... give you all the movies. The only diff is your getting them a little quicker) Come on... we pay for entertainment why don't they just say ok... We give in you can download but you must watch our advertisments while you download for FREE!!! Make the Advertisers pay for the stuff. Now everyone wins
22 - balticdave
As far as the levy goes...it is the responsibility of the manufacturer to charge it, not the store. If a store can find a supplier that doesn't want to charge the levy, fine, otherwise, like everyone else, they pass the tax along to the consumer.
Data CD's have a 21cent levy, audio CD's carry a 77cent levy! There is also a charge on MP3 players based on capacity, from $2 to $25 per unit. There currently is no levy on flash media or DVD's, the reason for that being the Copywrite Board's ruling that because of the levy, downloading was legal as the artist is already being compensated for the lost revenue.
There was a proposal to raise the levy thru the roof...over $2 a blank DVD, up to $1.23 a CD, 8 cents per MB on flash media and up to $225 on MP3 players...that currently sits in limbo while the lobyists push for crippling changes to Canada's copywrite laws...
23 - Blacksun
Look... if websites paid Royalties for each time a program... song or movie was downloaded and the Advertisements paid for the website. There would be enough profit for everyone. Radio Stations survive so why can't Websites giving away entertainment for FREE but in reality it wouldn't be free... it would just be free for the downloader. (Keep in mind the downloader would be hit with massive advertising which I don't think anyone downloading for free and legally would mind seeing advertising... would you?)
24 - Dan
Interesting blog so far, however lets clear up some simple facts.
FACT: Canada's economy has been third rate (to say the least), long before MP3's hit, even prior to the good old days when everyone was chatting it up on your local BBS.
FACT: People in Canada pirate music, games, movies, etc simply because we can't afford to beef up our PC's, and pay for all the crappy stuff thats out there. An example would be going to your local EB, purchasing the latest super-hyped game, and finding out Super Mario Bros 1 has better gameplay and graphics... yet you paid almost $100 bucks for that crap.
FACT: There is almost nothing in Canada that isn't taxed painfully. The claim this country is a "free" and "democratic" society is a fallacy. The people here are very docile and can not stand up to their government because "it won't make a difference", or "what can we do about it" lazy attitudes.
FACT: Canada is in a technological stone-age with techno-junkies who love to have the best, yet the equipment we get is second rate unless we import it paying heavy duties at the border. EG: DivX DVD Players are not even on the shelves, let alone mainstream. Instead we are being milked for crappy DVD players that [MIGHT if lucky] play DVD, MP3, and VCD for under a hundred bucks.
FACT: A little bit of math first. Minimum wage is $7.00 / hour. A full time week is 48 working hours. Lunch and breaks are not paid.
$7 x 48 hrs = $336.00 CAD
Now before you recieve the check, CPP, EI, and several other obscure fees are deducted leaving you with around $5 / hr (total is now $240). Under $1,000 / month.. ($960). A cheap 1 bedroom apartment is around $750 / month. Now you add on Internet at around ($65 / month - after %15 tax), Anyway, here is a rough break down of your average month in canada:
Income Earned (GROSS): $1344.00
Income Received (NET): $960.00
Rent 1bdrm Apt: $750.00
HighSpeed ISP: $65.00
---------------------------
For Food, clothes, entertainment (eg CD's, upgrades, movies, etc) : $145.00
The average CD costs between $20, and $40.
The avergae Game costs between $20, and $80.
A ticket for 1 admission at the AMC is $12.50
A loaf of Dempsters white bread is $3.00 (almost 30 minutes worth of labour)
And then, to top it all off, another 40% of our GROSS is deducted yet again at the end of the year, not to mention all the taxes on everything from cookies, to popcorn at the movies, to cd's, to games, to literally everything. So lets work with those numbers again. Remember the $145 left over after rent and ISP bills.
40% annual tax
---------------------
$960.00 x 12 months = $11,520.00 annual NET
$1344.00 x 12 months = $16,128.00 annual GROSS
from this, the government does this math:
$16,128.00 x 40% = $6541.20 (annual tax)
and they want to deduct that ?? from what ??
$145 x 12 months = $1,740.00 .. remember, the money after rent.
so..
annual tax - money after rent = -4801.20
---------------------------------------
And you wonder why we are piss broke. My question is, with this money, plus all the other taxes collected on purchase of food, etc, what on earth do they do with it ?? And how the hell can Canada be deficit. What a joke!!! And you expect us to buy cd's?, movies?, games?.... maybe... if i have tested and know its a good movie or game. Aside from that, We will continue to pirate and make copies for our busy police and lawyer friends for their iPod's while they are on break.
Lower prices.
More income.
Less tax.
More jobs.
Pretty simple, without a domineering and controlling government to leech all your hard labour... go after them if you want our money.
I AM CANADIAN!!! ugh!
25 - James
Yeah, your damn right Dan. I live in Toronto, and we pay for everything up the ass here. I dont need to be milked by corporate america for every damn thing, the internet should be left alone!!!
sweet