Japan to scrap iPod copyright fee

February 4, 2009 6:05:39 PM PST
Japan will stop pushing for legislation to charge royalties on the sales of iPods and other portable digital music players, giving in to opposition from electronics makers, officials said Thursday. What is being dubbed here as "the iPod tax" has been tossed around for years. The tax would allow about 1 percent to 3 percent of the price of a digital recording device to go to recording companies, songwriters and artists.

The Agency for Cultural Affairs had hoped to submit legislation to Parliament as early as this fall.

But amid a flurry of criticism from electronics makers, a meeting of a panel studying the proposal failed to reach any agreement Thursday, agency official Masafumi Kiyota said.

"At this point, there is virtually no hope for getting the legislation passed," he said.

The panel agreed to continue talking, but no date has been set, Kiyota said.

Despite an aggressive push by the Japanese recording industry, a similar proposal to impose an "iPod tax" fell apart in December 2005.

The cultural agency proposed a compromise in May to charge only portable digital music players, such as Apple Inc.'s iPods, and digital hard disk recorders. But the manufacturers resisted, saying more equipment could be added as a source for royalties.

Older devices, such as minidisk and DVD recorders, are already subject to copyright fees in Japan. The payments are included in the price tag so most shoppers aren't even aware they're paying it.

Kiyota said both consumers and electronics makers should be held responsible for paying copyright fees, and the proposed bill follows a global standard. Such systems exist in European nations.

Opponents say the system is an obsolete way of monitoring purchases of digital music and other works at a time when they're growing more widespread. Others say consumers are getting charged twice because they are often already paying royalties on digital purchases.