Debate: The cassette is still alive - in legislation

Digital services Innovation Copyright and related rights

More and more people are using legal and streaming services for movies and music, where copyright is already paid for. But Swedish law is stuck in time with cassette tapes. What is needed now is a modern and up-to-date remuneration of rights, write Klas Elm, ElektronikBranschen, and Anne-Marie Fransson, IT&Telekomföretagen.

Sweden is shedding its skin at a rapid pace. Right now, a service-based export explosion is underway that could be a future cornerstone of Swedish prosperity. We are in the midst of a digital paradigm shift, which is completely changing our communication and consumption patterns.

We want to shine the spotlight on a hidden problem for the development of Swedish prosperity. It is about the fact that we have extensive legislation in Sweden that is adapted to an old, analog world.

The private copying levy was introduced when cassette tapes and VHS cassettes became common. The idea was to compensate copyright holders for the loss of income they suffered when someone legally copied what they had created, instead of buying their own original.

But now the copyright holders' organization Copyswede is calling for the old cassette tax to be applied to modern digital devices as well. Computers, smartphones and tablets can be used for a lot of things, but they are not, as the law puts it, "particularly suited" to what the old cassette tax was intended to target.

The demands are based on previous measurements from the copyright organization Copyswede, which claims that the proportion of private copying would be up to 50 percent. It is against the background of these measurements that Copyswede is pursuing its claims in the courts.

Today ElektronikBranschen publishes a user survey from Ipsos, which shows that private copying has largely ceased. A representative sample (1 503 and 1 565 Swedes respectively) aged 16 and over were asked how they have listened to music and watched movies over the past month, via different devices. The answers were extremely clear:

  • Only 3% of those who have a smartphone use it for private copying of movies or series.
  • Only 5% of those who have a smartphone use it for private copying of music.
  • Only 5% of those who have a tablet use it for private copying of movies, and only 3% for private copying of music.
  • Only 8% of those who have a PC use it for private copying of films and series, 9% for private copying of music.

As the market has offered more user-friendly and affordable streaming services, such as Spotify and Netflix, more and more people are using legal and often streaming services, where copyright is already paid for.

The picture is also confirmed in the statistics recently presented by the music companies' organization Ifpi. In 2015, streaming services accounted for a full 82.7 percent of all music sales in Sweden, physical sales for 14 percent and downloaded sales for a modest 2.3 percent. The same pattern of development can be seen in the case of films and series, where private copying differs very little.

The problem is that the legislation has left the door open to include new products and make them reimbursable. This has led to several court cases in recent years.

The Court of Justice of the European Union has ruled that it is consumers who should pay the private copying levy. Swedish legislation remains stuck in the cassette tape paradigm and the levy is calculated per gigabyte of storage capacity. This means that Copyswede charges consumers a gigabyte tax. Some products may be subject to a levy of around SEK 450, which corresponds to a price increase of as much as 5-10%.

We are in the absurd situation that Sweden may introduce a gigabyte tax and increase copyright levies, while private copying decreases.

The consequence of this system is that both direct and gray imports will increase, hitting the retail sector hard. An unclear legal situation also means that companies risk incurring large retroactive costs. The compensation for non-existent private copying could amount to SEK 2 billion. Almost as serious is the symbolism: that we have legislation based on an outdated, analog cassette tape paradigm.

If Sweden is to be a society at the forefront of technology, we must have a political and legal process that is at the forefront of knowledge. We are not there today.

An investigation is now needed to find a modern and up-to-date remuneration of rights that benefits both consumers and copyright holders. Sweden should introduce the same Nordic model as Norway and Finland.

The role of policy is to create the conditions for individuals and businesses to develop, grow and contribute to prosperity. In a fast-moving service-based economy, this also involves symbols. The private copying levy is one such symbol. Consumers have switched to streamed services, but legislation is still based on the concepts of originals and copies. Now it's time for politicians to catch up.

Klas Elm, CEO, ElektronikBranschen

Anne-Marie Fransson, Federal Director, IT&Telecom Industries