Cultural flat-rate: A non-solution to a non-problem

35% of Internet downloads are porn

Cultural flat-rate, or a broadband tax to give money to copyright holders, is an idea that has been around for at least a decade, but has never become reality. There is a reason for this. The idea sounds deceptively simple and possibly attractive when you first hear it, but when you start looking at the details to formulate a concrete proposal, you become aware of the problems.

Collecting the money is one thing. You can discuss if it is fair to force people who do not actually download anything to pay anyway, and you may wonder how to handle the multiple (mobile) Internet connections that a family normally has, and issues like that. But we leave that aside.

It is when you come to how the money should be distributed that the real fun begins.

TV and radio play: Giving to the rich
If you base the payouts to artists on what is being played on TV and radio, most of the money will go to the established artists that are already doing very well. This is how the current system with levies on blank discs and various electronic devices works.

One of the most attractive features of the Internet is that smaller and not yet established acts can reach an audience, even if they are not played on TV and radio. This is the ”long tail” effect, and all the small acts together constitute a fair amount of what is being downloaded from the net.

This is the group of artists that most people would want to support, both for the cultural diversity they provide, and simply because they very often need the money. With a cultural flat-rate based on TV and radio play, they will get very little of the money collected. At the same time, their fans will have less disposable income to spend on these artists, since the fans have had to pay the flat-rate out of their household culture and entertainment budget.

The net effect could very well be a system that reduces income for poor artists, and gives the money to the already rich.

The alternative that most flat-rate proponents favour is to instead measure what is actually shared on the net, and base payouts on those numbers. But that leads to other problems.

Billions to porn
35% of the material downloaded from the net is porn. Pornography has exactly the same copyright protection as other audiovisual works. If the payments from a cultural flat-rate system are to be seen as ”compensation” for the downloading of copyrighted works, then 35% of the money should rightly go to the porn industry. Do you think that the politicians should create a system?

Personally, I have nothing against porn as such. It is a popular form of entertainment, and I see nothing wrong with it. But I do not think it requires billions in government mandated subsidies. Throughout history, this is an industry that has amply demonstrated its ability to stand on its own, if that is an appropriate expression in the context.

But if you want to exclude porn from a cultural flat-rate system, you will not only have to create a ”European Board of Morality and Good Taste”, or some similar mechanism to draw the line between pornography and art. More importantly, you can no longer use the argument that the cultural flat-rate is a ”compensation”, or has any connection to copyright.

Instead, it becomes random cultural subsidies at best, or an undisciplined money-grab at worst.

Filling up the networks
It is technically possible to measure what is being shared on the net with a reasonably high precision. Some people have voiced privacy concerns, but in this particular case, I don’t see that as a problem. The measuring only has to be ”good enough”, so it is not necessary to track every individual download that everybody does. You can fairly easily design a system to collect good enough statistics without invading anybody’s privacy.

But the minute you start paying out money based on the download statistics, people will change their behaviour. Today, if you like an artist and she has released a new album, you will download that album once so that you can listen to it. But if you know that your favourite artist will get money in proportion to how many times the album is downloaded, you realise that you can help that artist by downloading the same album over and over again.

Since it doesn’t cost you any of your own money even if you download the album a thousand times, or a million times, we can expect fans to do exactly that. We know that fans really love their idols, and want them to prosper economically. If all you have to do to make that happen is to start a three-line script on you computer when you are not using it for anything else, a lot of fans will.

The only real limit on the total number of ”I-want-to-help-my-favourite-artist downloads” will be the capacity of the Internet infrastructure. In other words: With a cultural flat-rate, the net will turn into a permanent gridlock of completely unnecessary traffic, and no matter how much money backbone providers spend on increasing the capacity, it will fill up immediately.

A revenue stream for virus writers
Computer viruses are a major problem today, despite the fact that it is actually quite hard for virus writers to make any money from their criminal activities. The purpose of a computer virus is usually to install a back door in your computer, to make it part of a so called ”botnet” of thousands of computers that the virus writer can take control of at will.

A botnet owner can sell his services to criminals who want to send spam or commit various forms of advanced fraud, but unless the virus writer has connections to organized crime, it is not trivial for him to convert his virus writing skills into hard cash. With a cultural flat-rate system, that changes.

In principle, all the owner of an illegal botnet needs is a friend who has recorded a song that is covered by copyright. He can then order the thousands of computers in the botnet to download the song again and again. Thanks to the flat-rate system, these downloads will automatically result in real money being paid out to the friend who has the copyright on the song.

In its most primitive form the police would perhaps be able to detect this criminal activity and put an end to it, but it is easy to imagine how more sophisticated criminals can elaborate the scheme. The cultural flat-rate system, which would pump out billions of euros per year on the basis of automatic download statistics, would become a very rewarding target for criminals. Writing harmful computer viruses would become a much more profitable activity than it is today.

There is no problem in the first place
There are several other arguments against cultural flat-rate as well, but I’ll skip those and go directly to the final, and very positive one:

There is no problem to be solved.

The Internet is a revolutionary technology that changes many of the preconditions for the cultural industries. The task for policy makers and politicians is not to protect old business models or to invent new ones. However, policy makers do have a responsibility for making sure that we have a society where culture can flourish, and where creative people have a chance to make money from what they do.

Ten years ago, when file sharing on the Internet on a massive scale was a new phenomenon, it was perhaps reasonable to wonder if this new technology would impact the market conditions for artists and creators so that they would find it impossible to make money from culture, and worry that cultural production would drastically decrease in society.

Today, we know better. We know that more culture is being created than ever before, and the people who were predicting ”the end of music” or similar doomsday scenarios were simply wrong. There is a growing body of academic research showing that artists are making more money in the file-sharing age than before it. The record companies lose, but artists gain from file sharing.

It is not easy to make a living as an artist, and it never has been, but the Internet has opened up new opportunities for creative people who want to find an audience without having to sell their soul to the big companies who used to control all the distribution channels. This is a very positive change for the artists and creators, both from a cultural and an economic perspective.

There is no need to compensate anybody for the fact that technological progress is making the world a better place.

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Others on the subject: Rick Falkvinge

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