Questions and Answers

Private copy / blank tape

Experience shows that only a very small part of memory capacity is actually used. Why is the charge on MP3 players and iPods also levied on free capacity?

When calculating the tariffs, scientific studies are used to determine how much memory is typically utilised for copyright works, and the remuneration is based solely on that figure. The proportion of private photos and documents as well as paid works from online stores such as iTunes is taken into account when determining the tariff. A tapering tariff structure is frequently used for this purpose: the larger the storage capacity, the lower the rate.
In practice, the price of a GB of memory is steadily falling while at the same time, the remuneration paid to authors is also declining. In the first tariff for recordable DVDs in 2003, 1 GB cost 40 cents, today it is just 19 cents for DVD-RW and 7 cents for DVD-R.

Apparently, the collective rights management organisations are planning a further extension of the obligation to pay charges to storage cards and external hard disks. Why is the scope of the charges becoming ever wider and wider?

Since 1992, the remuneration due to artists set out in the Federal Copyright Law has been levied on a flat rate basis on all storage media used to copy copyright works. Parliament deliberately formulated it in this fashion so that the law would remain valid irrespective of the currently employed technology. At first it was cassettes, today more commonly CDs, hard disk recorders and MP3 players. Basically it is simple: remuneration is due on any new technology used for private storage of copyright music, copyright films and books. Before the collective rights management organisations can apply for remuneration, they first have to demonstrate that the media are being used for this purpose. It is conceivable that at some date in the future a totally new system for remunerating authors will be invented and established. However, there is nothing on the horizon as yet.

With the increase in storage capacities, SUISA is collecting ever more money without having to do anything for it. Once again it’s the consumer who is suffering!

Although SUISA has reported satisfactory operating results in recent years, they show that music utilisation is undergoing a dramatic change. Artists’ income from audio medium sales has been falling rapidly for years. Instead, today digital files are copied, both those purchased online as well as those obtained from illegal sources on the web. The sale of storage media with which to copy these files has grown and at the same time as the triumphal march of the iPod, the remuneration for private copying as well. However, revenues are already beginning to stagnate again, reflecting a trend away from copying and towards streaming. Consumers are not suffering, but reaping the benefit of the new technical copying capabilities. Copying has never been as simple or as cheap, since the storage media prices are falling rapidly. Similarly, the blank recording media levy (LTV) has also dropped by as much as 400% in recent years. Here are a few examples:

These blank media levies are a thing of the past and out of date; they have no place in our digital world and should be scrapped. Or maybe not?

Today, new technologies such as broadband Internet and smartphones enable us to access works of art at any time, wherever we may be. Yet even the most innovative technical introductions need content if they are to arouse interest. Art and culture are the foundation for a creative economy. The cultural industry – like every other branch of industry – is dependent on financial returns from the exploitation of its cultural assets. If they no longer yield any income, who will be prepared to invest effort and intellect in new music, films, photography or literature? The blank media levy is a simple system that ensures artists a fair recompense for private copying of their works. It is based on the principle that the end user pays and gets by with no control apparatus to intrude into the private sphere of the individual. A different system might also be able to satisfy these requirements but no such alternative has yet been proposed or even put to the test. Until then, we need the blank media levy.

Aren’t there supposed to be digital rights management systems (DRM) that dispense with the need for flat rate remuneration systems of this type? Why do we still need a blank media levy then?

DRM systems have failed to deliver what was expected of them, on the contrary they have largely been discontinued. Where they still exist, they are generally enclosed systems that are incompatible or only partly compatible with other systems and create archiving problems. User access to all works and services is by no means guaranteed. DRM systems may also pose problems from the personal privacy perspective. DRM has failed to become established in the music world or in any other area and the four major labels sell their music via numerous platforms on the Internet without copy protection.
The Swiss collective rights management organisations reject DRM for the above-mentioned reasons. Consumers should be able to produce copies for private use without restriction and the authors should receive remuneration in return by means of an appropriate system.

Storage media is becoming ever bigger and in turn the copyright charges are exploding. Are we soon to pay more to the authors than for the storage medium itself?

This projection is incorrect because it is based on the assumption of a fixed rate. The remuneration due per storage unit is steadily falling on account of the fact that the tariffs are regularly renegotiated with the user associations. The tariff is determined by a Federal Arbitration Board composed of equal numbers of members from either side. Its decision can be referred to the Federal Administrative Court and ultimately to the Federal Supreme Court. In this way, the right to a fair remuneration is enshrined in law.
The issue of growing storage capacities is also addressed in another way. The tariff structures are based on a tapering scale – the greater the storage capacity, the lower the rate. For example the current rate for iPods is CHF 0.30/GB from 32 gigabytes.