Are levies the answer, or is the problem much deeper?

There are folks in Canada who are lobbying the government to add mp3 players to the existing media that charge consumers a private copying levy. The private copying levy is currently applied to recordable media such as blank CD-R discs (at $0.29 per disc). The levy allows individuals to make copies of sound recordings for their own private, non-commercial use. They may not distribute the copy. The argument goes something like this - if a levy were also applied to mp3 players, then logical dictates that we inherit the right to put copies of sound recordings for our own private, non-commercial use onto our digital audio players. I'm all for that.

But I always wondered - how does the over $150 million collected since 1997 get distributed? As it turns out, it gets distributed as follows: 66% to eligible authors and publishers, 18.9% to eligible performers and 15.1% to eligible record companies. The methodology by which the proceeds are distributed to rights holders is based on commercial radio airplay and commercial sales samples. This ignores radio/college airplay and independent record sales not logged by Soundscan. Some argue that this favours major label artists at the expense of lesser known and independent artists.

But nobody has ever released any real figures. How much does a well-known Canadian artist or group like Barenaked Ladies, Rush, or Arcade Fire get? How much does a new or lesser known artist or group like Sarah Harmer, Andy Shauf and Voivod get? Could it not be argued that the artist on the (financial) fringe needs the money more than the flagship label artist?

The CPCC claims that $150 million has been distributed to over 97,000 rights holders. That works out (assuming even distribution) to less than $1600 per party. But when you look even closer, it's not even that much. $22 million (and counting) of that money goes to overhead costs such as pursuing Copyright Board tariffs (lawyers, consultants, surveys, etc.), collection and enforcement (e.g. lawyers and auditors), and other causes such as “communications and government relations. So I ask you with all seriousness - does this levy really benefit actual artists significantly? If not, why do we even bother? Or was the only way we could manage to get the right to copy for private use entrenched in law, was to buy that right?

I've heard it said that on an average $16.00 CD retail sale, only $0.04 (four cents) ever goes to the artist. If they are in a band with four members, each member gets a penny (assuming the manager doesn't get their 20% cut). Most bands don't even see a profit unless they sell hundreds of thousands of records and get past the first couple of albums so they can renegotiate their contracts as a 'valuable artist'. I've also heard it said that most music artists who understand the real dynamic of the recording industry could care less if you bought their CD, but in fact would rather you went to their live performances and bought their t-shirts.

So I guess the real question left to ask is - maybe it's the record companies that need reforming. It sounds like a more equitable portion of revenue needs to go to the artists and a lot less to the labels. I predict that given enough time, someone will use the internet to its full potential and offer the artist more of the revenue pie.