Abstract

The rise of file sharing and the subsequent collapse in sales of recorded music offer a rare glimpse into a counterfactual world where copyright, for a time, was weakened. Comparing creative output before and after this exogenous shock allows us to test empirically whether incentives to copyright owners were correlated with creative output. In this article, I extend previous work on this issue from recording artists to songwriters and search for a correlation between incentives and popular music composition. In particular, I test three hypotheses. First, I test whether more incentives were associated with more or better popular musical compositions. Second, I test whether more incentives were associated with more entry by new composers into the market for writing hit songs. Third, I test whether more incentives were associated with higher productivity from those new composers. For the first time, for the modern music industry, I find a positive and statistically significant correlation between revenue and music output for one measure of popular music composition. However, the correlation is not robust and having run hundreds of regressions searching for such a positive correlation, not unexpected. Beyond this one, isolated result, regression analysis finds no correlation between incentives and entry by new hit songwriters. And regression analysis finds a statistically significant and robust correlation between more incentives and both (i) lower quality hit songs; and (ii) reduced productivity from new hit songwriters, ceteris paribus.

Abstract

In November 2015 the Brazilian Federal Police shut down MegaFilmesHD.net, a piracy streaming site that accounted for roughly 60 million monthly visits - more trafic than any other piracy site in the country. We assemble a balanced click stream panel of 2,557 Brazilian Internet users and estimate a generalized difference in differences model to determine the effect of this shock on legal and illegal consumption. The event caused treated users to substitute to streaming piracy sites by 20% (minutes +61%) and, despite this diversion, raised their Netflix visits by 6% (minutes +11%). Because the panel includes self reported demographics, we shed light on who pivots after enforcement. Men, urban residents, and professional class users divert more heavily to alternative piracy sites, whereas income-constrained segments (students and the unemployed) are least likely to adopt paid streaming in response to the shutdown. Taken together, the evidence shows that even a single site shutdown can generate measurable legal uptake in an emerging market, but legal conversion is concentrated among higher income users. Price discrimination or ad supported versions of legal services may therefore complement enforcement by attracting the more price sensitive pirates.

Abstract

This paper reviews recent and novel findings in the research linking international trade and trade policy to global protection of intellectual property rights (IPRs). The bulk of this research uses data on patent rights, patent applications, and trade to analyze how responsive bilateral trade and patenting flows are to IPRs. Detailed sectoral and firm-level patents and trade are highly correlated, while both are positively affected in high-technology sectors by stronger patent rights. Preferential trade agreements are of growing importance in this area. There is far less research on the trade effects of other forms of IPRs, including copyrights, which is a major missing element in this research. However, recent research suggests that international licensing by multinational enterprises in copyright-intensive industries is influenced strongly by copyright laws. Considerably more research is needed to address important questions in this literature.

Abstract

The article considers the role of copyright as an incentive to creativity in the era of platforms. Itself a form of regulation, copyright works through markets in the creative industries and those markets have changed radically due to platformisation. Although copyright enables creators and performers to earn from their work, only a very few can support themselves from royalties. The article relates specifically to the case of streamed music, for which various legal and economic remedies have been suggested in the UK (as elsewhere). Understanding platform economics and network effects, which lead to monopolisation in these markets, is essential for regulating them.

Abstract

This article is a stock-take of the first 21 years of RERCI's publishing history. It provides a holistic picture of the history of the journal since it was launched in 2004, and up to the end of 2024. All of the articles published in RERCI are freely downloadable by any interested reader as pdf files from the SERCI website.

Abstract

Economics is a popular and useful means to generate falsifiable, non-trivial predictions on how complex systems, such as the copyright industries, evolve. For the last two decades, an overarching theme in the economics of copyright has been how the copyright system relates to digitalization. Considering the swift progression of digital innovations in the copyright industries and related markets - of late with crowdfunding, blockchain technology, non-fungible tokens, the application of learning algorithms for recommendation systems or even for the creation of works - this is unlikely to change. However, it is challenging even for experts to select useful aspects of economic theory. This paper seeks to promote a 'cultural economics' perspective as a toolkit for even more nuanced and useful research on copyright. Overall, it argues that economists engaging with copyright ought to acknowledge the broader function of the copyright system as a means to approximate functioning markets in the presence of multiple sources of market (and government) failure. The copyright system does not only lay the foundations for markets by establishing exclusive, tradable rights. It also generates standards and routines that facilitate mutually beneficial transactions under real-world conditions of incomplete information and uncertainty. Overall, this paper develops novel agenda items for economic research on copyright.

Abstract

Economics is a popular and useful means to generate falsifiable, non-trivial predictions on how complex systems, such as the copyright industries, evolve. For the last two decades, an overarching theme in the economics of copyright has been how the copyright system relates to digitalization. Considering the swift progression of digital innovations in the copyright industries and related markets - of late with crowdfunding, blockchain technology, non-fungible tokens, the application of learning algorithms for recommendation systems or even for the creation of works - this is unlikely to change. However, it is challenging even for experts to select useful aspects of economic theory. This paper seeks to promote a 'cultural economics' perspective as a toolkit for even more nuanced and useful research on copyright. Overall, it argues that economists engaging with copyright ought to acknowledge the broader function of the copyright system as a means to approximate functioning markets in the presence of multiple sources of market (and government) failure. The copyright system does not only lay the foundations for markets by establishing exclusive, tradable rights. It also generates standards and routines that facilitate mutually beneficial transactions under real-world conditions of incomplete information and uncertainty. Overall, this paper develops novel agenda items for economic research on copyright.

Abstract

This short article, which is my Keynote talk from the 2023 SERCI annual congress, explores and discusses some of the main issues and questions that arise when one thinks about the role of copyright. We discuss why it is needed and the relevance of transaction cost. We then explore the question of what the optimal nature of copyright is and how to go about addressing that. We discuss the crucial role of bargaining for copyright policy and optimal copyright.

Abstract

Despite significant changes over the last two decades in the way people listen to music and the primary means through which music copyright owners monetize their intellectual property, blanket or collective licensing remains the norm. The music licensing marketplace continues to have almost no actual price competition between rightsholders to have their music performed. But some of the same technological advancements that led to the changes in the way that people listen to music can also be used to transform the way that music is licensed - moving towards a more competitive alternative. In this paper we provide a framework for a marketplace that, if implemented appropriately, would allow for individual rightsholders to set their own prices subject to the forces of competition, all while still maintaining many of the transactions costs efficiencies associated with blanket licensing. Critical to the emergence of such a marketplace is a comprehensive database of all sound recordings and the associated musical works with individual prices set by the individual rightsholders for the rights necessary to use their music. With such a database in place, rightsholders could set their own prices knowing that music services will take those prices into consideration when creating playlists, thereby extending competition to pricing and freeing the licensing market from the need for price regulation.

Abstract

Copyrights grant creators long periods of market exclusivity during which they or their agents have the exclusive right to reproduce and distribute their works. However, copyright exceptions limit their scope and strength. National laws governing copyright exceptions vary substantially from one country to the next. This paper introduces a novel, survey-based dataset that describes changes to 26 countries' laws on copyright exceptions over time. To explore the data, I construct two indices from subsets of the dataset; one focusing on exceptions related to internet communications technologies (ICTs) and another focusing on exceptions related to educational uses. The indices show that copyright exceptions have grown more robust since 1990, and that wealthier countries tend to have more developed exceptions than poorer ones. Initial empirical tests suggest that exceptions related to ICTs are more robust in countries with larger ICT sectors but less robust in countries with larger copyright sectors. Exceptions for educational uses are more robust in countries with higher educational attainments.
Supplementary files are available here.

Abstract

After streaming, what should copyright economics look like? The standard model of copyright economics used by courts and other policy makers - the "protect what would otherwise be a public good from copyists" model - is not general enough. It is particularly poorly suited for the era of internet streaming, because it assumes that the producers of creative works are vertically integrated with the utlimate retailers of those works. In this paper I argue for a new, rough-and-ready framework for use in formulating copyright policy. Rather than assuming a vertically integrated producer—retailer, my proposed model disaggregates the producer and the retailer, which I refer to more generally as an intermediary. One central feature of the streaming era is the growth and resulting bargaining power of technological intermediaries, including the large internet platforms and various popular streaming services. My proposed model of copyright economics allows for variation in the bargaining power of intermediaries, rather than implicitly assuming their power away. Making this shift in our mental model - our metaphor - for how copyright works changes the way we think about copyright law's economic functions. It also suggests the need to refocus copyright policy on the important dynamics between producers and intermediaries.

Abstract

This article traces the origins and evolution of the paying public domain (or domaine public payant), from its foundations in 19th century France, particularly as exposed in two famous speeches delivered by Victor Hugo, to its current versions in force in a handful of Latin American and African countries. We analyse the economic aspects of the copyright-public domain relationship. We emphasise the contrasts between original and contemporary versions of the paying public domain and provide a hypothesis to explain its mutation and subsistence.

Abstract

This study describes how composers were compensated during the twentieth century for their work in the Royal Swedish Opera through a performance right for drama, known as the ’grand right’. The study is based on primary data until the end of the 1980s. During this period a percentage-based tariff was used. The main finding is the doubling of the percentage rate claimed by publishers during the three decades following the end of the Second World War. The trade agreement concerning the commissioning of new music, the monopolistic position of publishers, the lack of reuse of new operas, and audience tastes are also discussed.

Abstract

Advances in technology over the last two decades have led to significant changes in the way that music is consumed, with music streaming services now being the dominant means through which people listen to music and the primary means through which music copyright own- ers monetize their intellectual property. The way that music rights are licensed by these digital streaming services, however, has not meaningfully changed. Blanket or collective licensing is still the norm and the marketplace is almost entirely devoid of any actual price competition between rightsholders to have their music performed. But some of the same technological advancements that have allowed digital streaming to emerge also can be used to transform the way that music is licensed — moving towards a more competitive alternative. In this paper we review the economic tradeoffs that have provided the primary justifications for the current blanket licensing systems, and then describe the institutions and regulatory environment that have developed to implement those systems in the U.S. That sets the stage to describe an alternative competitive marketplace taking advantage of streaming technology and data, which we do in our companion paper, Ebin and Reitman (forthcoming). Such a marketplace, if implemented appropriately, would allow for individual rightsholders to set their own prices subject to the forces of competition, while still maintaining many of the transactions costs efficiencies associated with blanket licensing.

Abstract

This paper discusses the regulations which limit the monopolistic and monopsonistic power of the Music Copyright Society of China (MCSC) in the context of the broader legal framework for the collective management of music copyright in China. The paper identifies "inadequate regulation" as a major cause of the misuse of such market power by the MCSC. Using a comparative approach, the paper analyses the regulatory regime that addresses the abuse of the market power of the American Society of Composers, Authors, and Publishers (ASCAP) and Broadcast Music, Inc. (BMI), the two oldest performing rights organisations (PROs) in the United States. Drawing lessons from the United States experience, this paper challenges the notion that establishing more musical collective management organisations (CMOs) in China would decrease the monopolistic and/or monopsonistic power of the MCSC. While the Chinese Anti-Monopoly Law cannot be applied to regulate the market power of the MCSC, this paper advocates for improving the current Regulations on Copyright Collective Administration (RCCA) as an alternative option for preventing the misuse of power by the MCSC.