Digital Audio Insider -- the economics of music and other digital content

  digital audio insider


Digital Audio Insider is David Harrell's blog about the economics of music and other digital content. I write from the perspective of a musican who has self-released four albums with the indie rock band the Layaways.

My personal website has links to my LinkedIn and Google+ pages and you can send e-mail to david [at] thelayaways [dot] com.

If you enjoy this site, please consider downloading a Layaways track or album from iTunes, Amazon MP3, Bandcamp, or eMusic. CDs are available from CD Baby and Amazon.


Analog Industries
Ars Technica
Brad Sucks Blog
Broken Record
Digital Music News
Duke Listens
Future of Music Coalition Blog
LA Times Technology Blog
The ListeNerd
MP3 Insider
Music Ally
Music Machinery
Music Think Tank
The Music Void
New Music Strategies
Online Fandom
Pakman's Blog
Rough Type
Virtual Economics

The Big Picture
Core Economics
The Long Tail
Marginal Revolution
The Undercover Economist

17 Dots
Shake Your Fist
Sounds Like the 80s
Unleash the Love

January 2006
February 2006
March 2006
April 2006
May 2006
June 2006
July 2006
August 2006
September 2006
October 2006
November 2006
December 2006
January 2007
February 2007
March 2007
April 2007
May 2007
June 2007
July 2007
August 2007
September 2007
October 2007
November 2007
December 2007
January 2008
February 2008
March 2008
April 2008
May 2008
June 2008
July 2008
August 2008
September 2008
October 2008
November 2008
December 2008
January 2009
February 2009
March 2009
April 2009
May 2009
June 2009
July 2009
August 2009
September 2009
October 2009
November 2009
December 2009
January 2010
February 2010
March 2010
April 2010
May 2010
June 2010
July 2010
September 2010
October 2010
November 2010
December 2010
January 2011
February 2011
March 2011
April 2011
May 2011
June 2011
July 2011
August 2011
September 2011
October 2011
November 2011
December 2011
January 2012
February 2012
April 2012
May 2012
June 2012
August 2012
October 2012
November 2012
December 2012
January 2013
February 2013
March 2013
June 2013
August 2013
February 2014
March 2014
September 2014
December 2014
March 2015
October 2015
November 2015
December 2015
October 2016
May 2017

February 28, 2006

Tuesday Odds and Ends
by David Harrell
Tuesday Odds and Ends
The conclusion to the Digital Pricing Conundrum series should be up later this week. (Here are links to parts I, II, and III.) In the meantime, a few recent items:

There's a piece over at the Huffington Post about album prices at iTunes, with lots of reader comments about variable pricing and downloading, a mix of the interesting and the inane.

Also, the Big Takeover updated its website late last year and now features columns, articles, top-10 lists, etc. Greg Bartalos, formerly of Barron's Online, has written a few posts about digital distribution-related issues.

Finally, my bandmate Porter sent a link to this post on Techdirt, which reveals that Canadians pay a tax of 21 cents per blank CD-R as a "private copying levy" which is then paid to copyright holders and performers. What's truly amazing here is that rate is even MORE for blank cassettes than CD-Rs!. (Guess that's based on the assumption that almost all cassettes are used for taping music, while CD-Rs do have other uses...) Here are the numbers from the Copyright Board of Canada's proposed rates for 2007:
3. (1) Subject to subsection (2), the levy rates shall be
(a) 29¢ for each audio cassette of 40 minutes or more in length;
(b) 21¢ for each CD-R or CD-RW;
(c) 77¢ for each CD-R Audio, CD-RW Audio or MiniDisc.
The poster was incorrect in his assumption that no such tax exists in the U.S., however. As one of the comments noted, we do have one (or maybe not, please see the update at the end of this post), courtesy of the Audio Home Recording Act of 1992. But it is much lower -- 2% for hardware, 3% for recording media:
Section 1004. Royalty payments
(a) Digital audio recording devices
(1) Amount of payment.
The royalty payment due under section 1003 for each digital audio recording device imported into and distributed in the United States, or manufactured and distributed in the United States, shall be 2 percent of the transfer price. Only the first person to manufacture and distribute or import and distribute such device shall be required to pay the royalty with respect to such device

(b) Digital Audio Recording Media The royalty payment due under section 1003 for each digital audio recording medium imported into and distributed in the United States, or manufactured and distributed in the United States, shall be 3 percent of the transfer price. Only the first person to manufacture and distribute or import and distribute such medium shall be required to pay the royalty with respect to such medium.
It's section 1008 of this law, which -- in theory -- preserves the right of consumers to make digital copies for personal ("noncommercial") use:
Section 1008. Prohibition on certain infringement actions No action may be brought under this title alleging infringement of copyright based on the manufacture, importation, or distribution of a digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium, or based on the noncommercial use by a consumer of such a device or medium for making digital musical recordings or analog musical recordings.
UPDATE: After more research, I can't confirm that the 3% royalty applies to data CD-R sales in the U.S. I've seen conflicting answers, but according the RIAA, the AHRA applies only to devices and media designed specifically for audio recording such as D.A.T. machines and stand-alone audio CD burners, and that general computer users are not protected under section 1008:
Multipurpose devices, such as a general computer or a CD-ROM drive, are not covered by the AHRA. This means that they are not required to pay royalties or incorporate SCMS protections. It also means, however, that neither manufacturers of the devices, nor the consumers who use them, receive immunity from suit for copyright infringement.
I'm assuming the 3% royalty does apply, however, to blank "audio" CDs. I also noticed that the RIAA site is currently conveniently vague when it comes to defining "fair use" of digital audio, with no reference to personal use:
There are some limitations. Whether the court allows you to reproduce, distribute, adapt, display and/or perform copyrighted works depends upon the nature of the use (commercial purposes, non-profit, educational), the length of the excerpt, how distinctive the original work is, and how the use will impact the market for the original work.

Generally speaking, one is not allowed to take the "value" of a song without permission, and sometimes that value is found even in a three-second clip. When in doubt, it is always wise to check with the copyright owner, because in many cases even a small clip of a song may not be "fair use."

link 0 comments e-mail listen to the Layaways on Spotify

More Digital Audio Insider: Newer Posts Older Posts

Subscribe:   RSS Feed

Add this blog to, Digg, or Furl. Follow David Harrell on Google+.

The Digital Audio Insider Twitter feed:
    Apple stock analysis

    Digital music jobs: Looking to hire? Looking for a job? Check out the digital audio insider job board.

    Popular Posts

    A Long Tail Experiment
    By the Numbers: Using Statistics to Quantify Audience Devotion Owes Me Sixty Cents
    An Interview with Jonathan Segel of Camper Van Beethoven
    Price Elasticity of Demand for McCartney
    Sony and eMusic: What I Missed

    The Digital Pricing Conundrum series:
    Part One Part Two Part Three Part Four


    Out Now -- "Maybe Next Year" -- The New Holiday Album:

    <a href="">Joy To The World by The Layaways</a>

    "This is a sweet treat, deliciously musical without being overbaked for mass media consumption." -- Hyperbolium

    "Perfect listening to accompany whatever holiday preparations you may be making today." -- Bag of Songs

    O Christmas Tree - free mp3 lyrics and song details
    Away In A Manger - free mp3

    Download from eMusic, iTunes, Amazon MP3, or Bandcamp. Listen to free streams at

    album cover art from The Space Between

    <a href="">Keep It To Yourself by The Layaways</a>

    "...about as melodic and hooky as indie pop can get." -- Absolute Powerpop

    "Their laid-back, '60s era sounds are absolutely delightening." -- 3hive

    "...melodic, garage-influenced shoegaze." -- RCRD LBL

    Where The Conversation Ends - free mp3
    January - free mp3
    Keep It To Yourself - free mp3

    Download from eMusic, iTunes, Amazon MP3, or CD Baby, stream it at or Napster.

    album cover art from We've Been Lost

    <a href="">Silence by The Layaways</a>

    "The Layaways make fine indie pop. Hushed vocals interweave with understated buzzing guitars. The whole LP is a revelation from the start." -- Lost Music

    "Catchy Guided by Voices-like rockers who lay it on sweetly and sincerely, just like Lionel Richie." -- WRUV Radio

    Silence - free mp3 lyrics and song details
    The Long Night - free mp3

    Download from eMusic, Amazon MP3, or iTunes, stream it at, Napster, or Rhapsody.

    album cover art from More Than Happy

    "These are songs that you want to take home with you, curl up with, hold them close -- and pray that they are still with you when you wake up." -- The Big Takeover

    Let Me In - free mp3
    Ocean Blue - free mp3

    Download from eMusic, Amazon MP3, or iTunes, stream it at, Napster, or Rhapsody.

    More Layaways downloads:

    download the Layaways at eMusic download the Layaways at iTunes

    the layaways website