A tax on music tracks

By BBC News Online internet reporter Mark Ward

French musicians and movie makers who lose royalties because of digital piracy are to be compensated for the money they have lost.

Next month, the French Government will impose taxes on blank CDs and other recordable storage media in a bid to recoup some of the losses when people copy rather than pay for music, images or films.

Initially it was considering extending the tax to cover hard disks, set-top boxes and advanced video recorders, but protests have prompted it to scrap the plans.

The French action follows a similar move by the German Government, which imposed a levy on computers at the beginning of the year. This year Denmark also started imposing taxes on blank CDs.

Recouping royalties

Many European nations, with the exception of the UK and Luxembourg, impose "artist taxes" on video and audio tapes. The money generated is used to recompense artists losing royalties because people are copying rather than buying their work.

But the march of new technology is reducing the pot of cash generated by these taxes as people turn to new media such as recordable CDs, DVDs, flash memory cards and the like to store favourite songs and films.

So far, only France and Germany are tackling the problem by extending the scope of existing taxes.

At the start of the year, Germany started putting a tax of about 60 DM (£20) on hard disks sold in the country.

Media money

France is going further because it sees a significant decline in tax revenue from tapes. In 1994, this tax produced about 750m FF (£73 million); last year the figure slumped to 450m FF (£43 million).

To make up the shortfall, the French Government is extending the tax to cover blank CDs, recordable DVDs and MP3 players. The new tax will be effective from 22 January.

Ms Tasca said 75% of any cash generated by the tax would go to established artists and the remainder would be used to encourage new talent.

News about the tax was revealed during an interview that French culture minister Catherine Tasca gave to the French newspaper Le Figaro.

She also said the government was considering whether to extend the tax to other devices that could be used to record music and movies such as set-top boxes, advanced video recorders, CD burners and hard disks in computers. She said this would be a "logical extension" of the policy.

Court action

The plan was condemned by the French electronics industry, which threatened to take its protest to the highest court in the land.

A spokesman for Secimavi (the international association for the audio, visual and computer trade) said it was "deeply opposed" with the plan because it penalised everyone, rather than just those pirating music and movies.

Now protests from inside and outside the French government has forced Ms Tasca to retract the extension of the tax.

A spokeswoman for the British Phonographic Institute said there were no plans to impose a tax on recordable media in the UK.

She added that in the past a tax on blank tapes had been considered. "We decided against it in the UK," she said, "because a levy on blank tapes would seem to legalise taping, and the money raised from any levy would have been a drop in the ocean of lost royalties."