13.02.06 - Royalties also on digital memory storage media in MP3 players and recording devices with built-in hard drives
From 1 March 2006, royalties will also be levied on digital memory storage media in MP3 players and recording devices with built-in hard drives.
On 17 January 2006, at the request of the five Swiss copyright societies SUISA, SUISSIMAGE, SWISSPERFORM, ProLitteris and SSA, the competent Federal Arbitration Commission approved a new tariff for a blank audio media levy in favour of authors and persons entitled to copyright protection for neighbouring rights (performing artists, sound and sound carrier producers and broadcasting companies). From 1 March 2006, producers and importers of digital recording devices like MP3 players, iPods and video receivers with internal hard drives will pay a levy on the non removable memory storage media incorporated into such devices. This new levy is designed to remunerate authors for private copying on hard drives and microchips.
The levy is graduated depending on the type and capacity of the storage media :
a) for flash memory (e.g. MP3 players, mini iPods etc.)
with less than 512 Megabyte (MB) storage capacity CHF 0.0253 pro MB
with less than 1 Gigabyte storage capacity CHF 0.0178 pro MB
between 1 and 2 Gigabyte storage capacity CHF 0.0145 pro MB
between 2 and 4 Gigabyte storage capacity CHF 0.0078 pro MB
with 4 Gigabyte storage capacity and over CHF 0.00467 p. MB
b) for hard drives in audio recording devices (e.g. in MP3 jukeboxes and iPods): for each 1 Gigabyte storage capacity CHF 0.469
c) for hard drives in audiovisual recording devices: for each 1 Gigabyte storage capacity (e.g. set top box, PVR, DVD player with hard drive) CHF 0.346
This new levy will also remunerate authors, at last, for private copies on hard drives and microchips. A similar levy has existed since 1993 for analog carriers like cassette recorders and VHS video recorders and, since 2002, for blank CD-Rs and DVDs. The new levy for storage media in MP3 players and recorders with non removable hard drives is moderate. The Federal Arbitration Commission was careful to ensure that the new blank carrier levy would not increase the cost of private copies by more than 6%. At this level, consumers will hardly feel the increase since, thanks to competition and mass production, prices of recording devices are continuously falling. In setting the levy, the Arbitration Commission also took into account the fact that consumers already pay to download music from legal websites. The levy does not apply to PC hard drives, cellphone memory cards or PDAs. The Swiss copyright societies feel that certain points in the Federal Arbitration Commission’s decision are contestable. They are awaiting written substantiation of the Commission’s decision to decide whether or not to challenge it before the Federal Supreme Court.
The copyright societies will distribute the proceeds from the blank media levy to composers, performing artists, music publishers and producers for the recording of music, and to film directors, actors, film producers and broadcasting companies for the recording of DVD films or televsion broadcasts. Instead of the blank media levy, it could be conceivable to remunerate rightsowners for the use of their recordings via digital rights management systems (DRMS). But, for the vast majority of rightsowners, DRMS are not suitable for managing private copying and performance rights – nor are they likely to be so in the foreseeable future. More often than not, the systems used by online providers are not compatible. The blank media levy system extended by the Federal Arbitration Commission, on the other hand, remunerates rightsholders for the mass-copying of their works and performances in a way that is both simple and economically acceptable to the consumer.
