February 23, 2006
French "Duty Tax" May Legalize File-Sharing

In an article in Next Generation, Chris Weaver of Bethesda Softworks notes that French lawmakers have come up with a plan that may legalize digital file-sharing:

A recent government attempt to impose astronomical penalties of hundreds of thousands of dollars and jail time of up to three years on "Digital Pirates" backfired as lawmakers instead voted to endorse amendments to legalize the online sharing of digital media by anyone who paid a "duty tax" of $8.50. While not the final vote on the issue within the French government, the gauntlet has definitely been thrown down.

The vote was met with a hailstorm of criticism by the entrenched industries[...]

The event would almost be amusing if it were not so serious when viewed in the context of communications technology history. Entrenched industries bar the door and clamor for government protection while technology creates new industries. This problem is not new. It is simply that people forget to pass this information on to new generations, who might otherwise avoid the mistakes of their forebears.

Chris goes on to point out that of the VCR saved the movie industry by creating a profitable aftermarket. While it's not clear that the French "duty tax" would be a magic bullet for the moral panic that's arisen around digital 'piracy', it seems like it would be a step in the right direction. Media producers would realize some revenue, and no longer need to waste astronomical sums of money (and customer goodwill) by lawyering up and pursuing ineffective and damaging DRM schemes.

It's worth noting that Chris works in the video game industry, one of the few places where piracy demonstrably *can* affect a company's financial health, due to overhead issues which can make games which move hundreds of thousands of copies unprofitable. The root problem in the games industry isn't piracy, however; it's that the big-box stores can leverage their power to extort a ridiculous share of a game's retail price for themselves. Digital distribution and alternate revenue models (such as subscription fees for MMORPGs) are vital for the game industry's future, just as adapting to the reality of file-sharing is vital to the music and movie industries. The only difference is that most everyone on the development side of the games industry knows their business model has to change, and the sooner the better.