TOKYO - In the United States, recording labels want a bigger slice of Apple's success in digital music by seeking higher prices on downloaded songs. Japan's music industry has a different idea: putting a fee on iPods.
The industry has asked the Japanese government to charge a royalty, to be added to the retail price of portable digital music players like Apple's iPod, which has been explosively popular here. Money earned from the fee, which will be probably be 2 to 5 percent of the retail price, would go to recording companies, songwriters and artists as compensation for revenue lost from home copying.
It is a familiar story of vested interests feeling threatened by new technologies. Like their counterparts in the United States, Japanese recording companies are struggling to catch up with the Internet and the advances in digital recording technology that are transforming their industry.
But in Japan, the proposed fee has also touched off an unusual public battle over the influence that industry groups here still wield over the government and economy.
As a powerful political lobby, Japan's recording industry expected to get its way when it first asked for the fee last fall. Instead, its proposal remains stalled in one of Japan's government committees. The news media, meanwhile, mock the fee as the "iPod tax."
"This is typical of how industry groups try to manipulate government at the expense of consumers," said Hiroko Mizuhara, head of the Consumers Union of Japan. "A lot of things in Japan have changed, but this hasn't."
The recording industry has already succeeded in slowing the arrival of Apple's iTunes music download service to Japan through its reluctance to negotiate licensing deals, people in the industry said.
Apple opened a Japanese version of iTunes in August, two years after its introduction in the United States, but without songs from the major Japanese labels like Sony Music Entertainment and Warner Music Japan, which still have not signed licensing agreements.
ITunes received a warmer welcome from Japanese consumers, who bought one million songs in the first four days, according to Apple, which declined to comment for this article.
The proposed fees in Japan come as the music industry in the United States appears to be jealously looking at Apple, whose iPod and iTunes dominate their respective global markets. Record executives in the United States have recently said that they wanted to renegotiate and raise prices of songs sold by iTunes when licensing agreements expire next spring.
"Recording industries on both sides of the Pacific are trying to find all kinds of schemes to make more money," said Tim Bajarin, an analyst at the Creative Strategies consulting firm in Campbell, Calif. "They have this alternative commercial channel, and they're just trying to block it or tax it."
The proposed fee would affect portable digital players that store data on internal hard-disk drives and flash memory computer chips - which include not only iPods but rivals like the Sony Walkman and other portable devices.
A fee of 2 percent is already imposed on devices using earlier digital recording technologies, like compact disc and minidisc recorders. Japanese manufacturers have been longtime opponents of such fees. The fees are similar to a 2 percent surcharge imposed by the United States government in 1992 on sales of digital tape recorders, the first generation of digital home recording equipment, also to compensate for copying.
The current fight in Japan has particular political significance because it is taking place in a government advisory committee, which helps the powerful bureaucracies set policy. These committees are usually tame panels that reflect vested interests because they are packed with insiders from the industries being regulated.
The committee, under the Agency for Cultural Affairs, is split over the issue of whether royalties included in the price of music at online stores allow users to copy songs to portable players. The recording industry says the royalties only cover transmission to the listener's personal computer, not for copying from there to a player like an iPod. Opponents counter that consumers copying to a player for their personal use should not be forced to pay twice to get a song from iTunes to their iPod.
"It's like charging riders when they board the bus, and then again when they get off," said Naoki Koizumi, a law professor in Tokyo at Keio University who serves on the committee.
The Japanese recording industry complains that the sudden rise of the portable digital players is robbing it of the revenue that used to come from the fees on CD and MD recorders. Earnings from fees have fallen last year to 2.2 billion yen ($20 million) from 3.8 billion yen in 2000, according to the Japanese Society for Rights of Authors, Composers and Publishers. "Now everyone who used to be using CD's and MD's are using iPods," said Koichi Numamura, head of the society's recording rights department. "We can't just sit by silently while we lose money."