Friday, June 07, 2013

Audio Tax!

 This was a big hoopla back in 1986. It all started when the judiciary subcommittee on Patents, Copyrights and Trademarks adopted a plan called S.1739 the Home Audio Recording Act. It was to impose a 5% royalty tax on tape recorders and a 25% royalty tax on dual bay tape recorders. They money was to go to the record industry. It was introduced by Senator Charles Mathias [R] of Baltimore, MD. You can see immediately who that bill is directed at: bootleggers, tape dubbers, and commercial duplication services. It also would impose a $1 tax on each individual blank tape cassette. (That last provision was struck down but the RIAA wanted it back. Aggrieved parties immediately included OTR collectors, retailers, audio technicians, radio groups, and manufacturers.
It was opposed by the ARRC (Audio Recording Rights Coalition) [now HRRC] among many others including then President Regan. It's members included 3M, Tandy, Maxell, GE, Sony and many other companies that either made tape or tape decks. Nobody wants to see a tax levied on their goods. Back then the record industry was claiming that they were losing 1.5 Billion per year to illegal taping. That's over 2 billion in today's dollars. But as we know the record biz has a penchant for dramatic overstatement. In more recent times they claimed losses around12.5 billion dollars. It was a number produced by math that usually elicits bursts of laughter when explained in a court of law. While their math is ludicrous, the notion that some loss occurs is inarguable then as it is now. In the book Bootleg! by Clinton Heylin, the author details the three primary debunking arguments the ARRC put forth. More here.
1. The majority of home tapers go on to purchase the album
2. 65% do so to program their own selections (mixtapes)
3. 51% of hoem recordings are made from albums the taper already owns.
Try to remember that this bill was drafted 5 years before the DAT was created and a decade before the CD-R. That this spat was over simple, noisy clunky, consumer-grade cassettes.In 1984 the sale of cassettes out paced that of the LP. Add to that thought that the Supreme Court had only ruled in 1984 that home taping was fair-use. The short version was that the RIAA was smarting from that loss was was trying to get what they wanted via a handout from the government.They didn't get it then, but later on in the Telecommunications Act of 1996 they got some of what they wanted anyway.