There's a good deal of news today about the British plan announced today that will see labels work with ISPs to curb piracy. The Independent reported that British ministers are backing proposals to tax ISP subscribers for music sharing. After reading up on the matter, I think The Independent jumped the gun (which led to a misled eruption across the Internet) and included a tax when the Memorandum of Understanding does not contain such a proposal. Billboard.biz has a good article on the anti-piracy plan and doesn't mention a tax. Here's the BPI press release and the IFPI press release.

The Guardian has a transcript of a call with the BPI that has a very good explanation of the plan. In it, BPI chief executive Geoff Taylor said the report of a tax was incorrect. "A widely-applied tax probably isn't the way forward here" and the idea "hasn't ever been tabled," he told reporters on the call.

What the BPI outlined was a five-point plan to educate and warn ISP customers as well as develop "innovative new music services" (the Sky-Universal service was singled out as an example).

Here's how this will shake out. First, ISPs adopt a code of self-regulation to prevent the government from doing it for them. Second, labels will continue with their education campaign to prop up the value of music. Third, ISPs will send out thousands of letters every week to suspected infringers. Fourth, steps will be taken to deal with repeat infringers (note that Britain does not want to take after France's "three strikes" proposal). Fifth, customers will be pointed to legal alternatives, which could be a new generation of music service formed in partnerships between labels and ISPs.

And what will happen If and when steps one through five fail to reach the desired outcome? That's probably when the reported tax comes in. I imagine the parties involved would like to keep the tax as a last ditch effort and let the five-point plan have its chance. In the end, they could end up pushing for a tax. I place little faith in a broader education campaign and a bit more in labels' and ISPs' ability to create viable, legal alternatives. Labels could be content if ISP-based music services ease piracy's sting and if ISPs can adequately convert infringers to their legal, paid services. Then again, I think labels will always have fits knowing that any piracy exists. Digital piracy isn't going away unless its taxed out of existence, so a tax will always be seen by some as a viable tool.

(By the way, the memorandum was signed by the Motion Picture Association as well as the major labels. Labels wouldn't be the only parties after that tax revenue.)

As for the revenue that could be gained if there was a tax, it could plug some holes. The Independent puts the number of broadband subscribers engaged in music piracy at 6.5 million. At a £30 annual tax, that's £195 million in revenue per year. Something in the range of £200 million would get UK recorded music revenues back to its 2003 level of £1.23 billion.

[music jobs] Director of Content at Dada Entertainment; New York, NY.