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The "Pirate Tax"

By: Dan Morrill

Slashdot this morning is carrying a news clipping that Universal would like the same amount of money per IPod that Zune pays... universal as sort of a "pirate tax" on the device that goes directly to the media companies. With some 67 Million IPods out there, that is a heck of a payday for Big Media if they get a dollar a device like they do with Zune.

Link: Slashdot

If this happens, it will not be long until some fan boy in the media world comes up with an idea that goes something like this:

"Hey if we can get Microsoft and Apple to pay a dollar a device, why not the same on CD and DVD's on PC's, or other media players, or other markets like the DVD stand alone players?"

The sad part is that the above is believable, it is not out of the realm of impossibility. A trial satire on this was featured in BBSpot, a well known joke site they ran an article that stated that the MPAA wanted to start taxing home theaters, and went something like this:

"MPAA head Dan Glickman says this needs to be regulated before things start getting too far out of control, "We didn't act early enough with the online sharing of our copyrighted content. This time we're not making the same mistake. We have a right to know what's showing in a theater." The bill would require that any hardware manufactured in the future contain technology that tells the MPAA directly of what is being shown and specific details on the audience. The data would be gathered using various motion sensors and biometric technology. The MPAA defines a home theater as any home with a television larger than 29" with stereo sound and at least two comfortable chairs, couch, or futon. Anyone with a home theater would need to pay a $50 registration fee with the MPAA or face fines up to $500,000 per movie shown." (BBSpot)

The problem is that after all these years of litigation, lawsuits, and otherwise, the one dollar tax on devices is not a surrealistic thing that people can imagine. We know that loss coverage is built into the prices of everything we pay for in one form or another. So having a tax on media players, any player is not out of the believability realm of reality. If people will freak over satire like at BBSpot, then it should come as no surprise that the Media companies are going to want their "pirate tax", and the sad part is that they will most likely get it from every device that plays any media over the next couple of years.

If DRM does not work and is fundamentally broken as has been shown over the years, the "pirate tax" may make sense in the longer run. The big question then is can this process be used to cover a legal defense, IE the argument would be:

"So I pirated it, but RIAA/MPAA has their pirate tax, so everyone has paid the fines already". This scenario is already being somewhat used in other legal cases where the actual cost of the file, one dollar at ITunes, or the 750 dollar fine per song is legal or not. That case has not been decided yet. Or the other undecided case where the Kazza fine covered everyone who downloaded anything via that program. This should make for a messier legal system, when all these kinds of defenses are reviewed, and it will be interesting to see what the courts are eventually going to come up with.

Depending on how the media companies fair with Apple will be interesting to see.


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About the Author:
Dan Morrill has been in the information security field for 18 years, both civilian and military, and is currently working on his Doctor of Management. Dan shares his insights on the important security issues of today through his blog, Managing Intellectual Property & IT Security, and is an active participant in the ITtoolbox blogging community.

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