Richard Stallman has suggested something similar, but with the tax being on internet use rather than media, and with the money being distributed to artists in proportion to the cube root of their popularity.
It is possible to prove mathematically that a free market doesn't work with goods that that have a significant cost to create but that are infinitely copyable, without restriction, at essentially zero cost once created.
The current copyright laws address this by restricting copying. The basic idea is to intellectual property artificially behave like physical property, so that the market can work.
There are a couple of disadvantages to this approach. (1) it makes IP goods more expensive to the consumer than they "should" be, so there will be underconsumption compared to what people would consume if the price was lower. (2) people can easily cheat.
The major advantage of this approach is that it leaves the decision of what works get made up to the market.
The other major way to address the market failure, which is the one Stallman suggests, is that you do artificially make IP act like physical problem, and so go ahead and let the market make and distribute copies without restriction, and address the problem of creation by public funding.
This is arguably fair since almost everyone does consume music, movies, and other forms of art. Essentially it is treated as a public good.
The advantage of that system is that consumers end up paying close to the marginal cost for their entertainment (i.e., $0), which is the economically "correct" price. Another advantage is that it does not rely on people obeying a legal fiction.
The disadvantage is that if art is being treated as a public good is that you (1) have to decide on the source of funding, (2) the funding level, and (3) how to distribute the money.
For source of funding, the most sensible seems to be some kind of tax specifically for this, probably tied to something that at least vaguely correlates with art consumption.
I have no idea how one would go about determining the funding level.
For distribution, something based on popularity seems sensible. Note that under this approach, all copying and sharing would be completely legal so there would be no need to try to hide it, so it would be feasible to figure out popularity by sampling network traffic. In fact, since it would be in the interest of content creators to ensure accurate measurement of popularity, I suspect that there would be big official free fast download services sponsored by the content creators, with good search and recommendation features, and most people would download through those rather than use P2P.
http://stallman.org/articles/internet-sharing-license.en.htm...
It is possible to prove mathematically that a free market doesn't work with goods that that have a significant cost to create but that are infinitely copyable, without restriction, at essentially zero cost once created.
The current copyright laws address this by restricting copying. The basic idea is to intellectual property artificially behave like physical property, so that the market can work.
There are a couple of disadvantages to this approach. (1) it makes IP goods more expensive to the consumer than they "should" be, so there will be underconsumption compared to what people would consume if the price was lower. (2) people can easily cheat.
The major advantage of this approach is that it leaves the decision of what works get made up to the market.
The other major way to address the market failure, which is the one Stallman suggests, is that you do artificially make IP act like physical problem, and so go ahead and let the market make and distribute copies without restriction, and address the problem of creation by public funding.
This is arguably fair since almost everyone does consume music, movies, and other forms of art. Essentially it is treated as a public good.
The advantage of that system is that consumers end up paying close to the marginal cost for their entertainment (i.e., $0), which is the economically "correct" price. Another advantage is that it does not rely on people obeying a legal fiction.
The disadvantage is that if art is being treated as a public good is that you (1) have to decide on the source of funding, (2) the funding level, and (3) how to distribute the money.
For source of funding, the most sensible seems to be some kind of tax specifically for this, probably tied to something that at least vaguely correlates with art consumption.
I have no idea how one would go about determining the funding level.
For distribution, something based on popularity seems sensible. Note that under this approach, all copying and sharing would be completely legal so there would be no need to try to hide it, so it would be feasible to figure out popularity by sampling network traffic. In fact, since it would be in the interest of content creators to ensure accurate measurement of popularity, I suspect that there would be big official free fast download services sponsored by the content creators, with good search and recommendation features, and most people would download through those rather than use P2P.