Review of Economic Research on Copyright Issues, Vol. 7, No. 1, 31-44, 2010
Undoubtedly, the idea of strong property rights is the underlying idea of economics and one of the main sources of economic incentive. In his paper, Prof. Shavell (see Shavell, 2009) seems to question and eventually impugn the idea of the economic efficiency of property rights in the market place of ideas in the academic world. In this regard, I will criticize his paper with the economic methods and will explain how Prof. Shavell's idea of the abolishing copyrights for the academic works might suffer from inconsistencies and also lacks the merits in generating a more economically efficient atmosphere for the academic works.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 7, No. 1, 7-29, 2010
Giovanni Battista Ramello
This article explores the journal publishing industry in order to shed light on the overall economic consequences of copyright in markets. Since the rationale for copyright is among others to promise some market power to the holder of the successful copyrighted item, it also provides incentives to preserve and extend market power. A regular trait of copyright industries is high concentration and the creation of large catalogues of copyrights in the hands of incumbents. This outcome can be observed as the aggregation of rights and is one of the pivotal strategies for obtaining or extending market power, consistently with findings in other cases. Journal publishing is no different in this respect from other copyright industries, and in the last decade has experienced a similar trajectory, leading to a highly concentrated industry in which a handful of large firms increasingly control a substantial part of the market.
It also provides a clear example of the effect of copyright dynamics on market structure, suggesting that a different attitude should be taken in lawmaking and law enforcement.
Review of Economic Research on Copyright Issues, Vol. 7, No. 1, 1-6, 2010
This paper is the introduction to the symposium "Copyright in Academic Publishing".Click to read more.
Review of Economic Research on Copyright Issues, Vol. 7, No. 1, 67-81, 2010
I examine the effect that radio airplay has on the sale of digital music in New Zealand. This effect is also likely to influence the behavior of various music industry participants, including the record companies, radio industry and listeners. I find that on an industry level, radio airplay has no significant effect on the sale of digital music. However, on average, an increase in radio airplay of a given song is predicted to increase sales of that song, which is the so-called exposure effect. The discrepancy between the aggregate and individual effects is explained by the existence of the fallacy of composition: An increase in the airplay of a particular song usually happens at the expense of another song's airplay, and so if more airplay does give greater sales of a given song, so less airplay will reduce the sales of competing songs, leading to ambiguous aggregate effects. It is also true that while individual songs compete with other songs for airplay, the radio industry competes with other activities and products consumed by listeners. Increases in the total airplay may not increase total sales, as the listener's decision regarding digital single purchase is now made with consideration of their non-music consumption goods, and budget and time constraints.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 6, No. 2, 31-60, 2009
Paul J. Heald
Some economists assert that as valuable works transition from copyrighted status and fall into the public domain they will be underexploited and their value dissipated. Others insist instead that without an owner to control their use, valuable public domain works will be overexploited or otherwise debased. This study of the most valuable musical compositions from 1913-32 demonstrates that neither hypothesis is true as it applies to the exploitation of songs in movies from 1968-2007. When compositions fall into the public domain, they are just as likely to be exploited in movies, suggesting no under-exploitation. And the rate of exploitation of these public domain songs is no greater than that of copyrighted songs, indicating no congestion externality. The absence of market failure is likely due to producer and consumer self-regulation.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 6, No. 2, 5-12, 2009
The debate about copyright law centers on the apparent tradeoff between the creation of new works and the extent to which these works are used once they are created. Economics has been employed explicitly and implicitly to bolster positions taken by those involved in this debate. I do not directly join this debate here, but what I will say is relevant to it. My objectives are different, to draw attention to the neglect of creativity by economists and to describe some of the unique problems this neglect poses for those who use traditional economic models to explain and support the positions they take in this debate. It is no intent of mine to discourage the use of traditional economic models but, rather, to urge greater care in their use.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 6, No. 2, 13-29, 2009
Olivier Bomsel and Heritiana Ranaivoson
The digitization of copyrighted goods and the dematerialization of their distribution over the Internet have caused a weakening of copyright, a key institution of the creative industries. One reason is that, during the broadband roll-out, copyright enforcement costs have become superior to the estimated benefits of copyright. This paper analyses the causes of this situation and suggests how a graduated response to infringers can decrease copyright enforcement costs.
The paper starts with a review of the economic literature on copyright that focuses on its industrial aspects. It then analyses how, all along the distribution vertical chain, the consumer's impunity provides incentives to free ride on copyright, which rapidly increases copyright enforcement costs. It finally depicts the graduated response mechanism and the voluntary agreement that initiated this system in France. In conclusion, the increase in the cost of free-riding for the final consumer should lead to a decrease in copyright enforcement costs and to higher returns in the creative industries.
Review of Economic Research on Copyright Issues, Vol. 6, No. 2, 1-4, 2009
The year 2009 has come to an end, and with it this second issue of the sixth volume of the Review of Economic Research on Copyright Issues, or RERCI. It has, at least in the opinion of the Managing Editor, been an extremely productive six first years of the life of this journal, and it has moved from its inception in 2004 as a start-up hoping to find a foothold in the competitive world of academic economics journals, to what I believe is now a widely recognised source of rigorous academic work on the very particular topic of the economics of copyright.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 6, No. 1, 35-60, 2009
The optimal term of copyright has been a matter for extensive debate over the last decade. Based on a novel approach we derive an explicit formula which characterises the optimal term as a function of a few key and, most importantly, empirically-estimable parameters. Using existing data on recordings and books we obtain a point estimate of around 15 years for optimal copyright term with a 99% confidence interval extending up to 38 years. This is substantially shorter than any current copyright term and implies that existing terms are too long.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 6, No. 1, 61-82, 2009
Matthew J. Baker and Brendan Michael Cunningham
The impact of copyright law on innovation is a topic of much debate. We use quarterly data on aggregate copyright applications in both the U.S. and Canada to estimate an empirical model of copyright applications. We measure changes in the breadth of copyright protection by tabulating outcomes of important court cases and new statutes pertaining to copyright protection. We find that the flow of applications exhibits a small but significant positive response to court decisions broadening copyright protection. We also find that applications: 1) respond negatively to increases in registration fees 2) move counter-cyclically 3) have a strong seasonal component and 4) may increase as computing technology becomes more widely available.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 6, No. 1, 1-11, 2009
Koji Domon and Tran D. Lam
This paper considers how optimal copyright enforcement is affected by the development of those media industries promoting musicians. Accounting for situations in both developing and developed countries, we point out two cases, a strictly convex and a strictly concave profit function with respect to the level of copyright enforcement. In the first case a copyright holder prefers a minimal level of enforcement under immature media industries, and a maximal level of enforcement under mature ones. This means that optimal copyright enforcement switches from minimum to maximum along with the development of media industries. In the second case, optimal copyright enforcement gradually increases concomitant with the development of media industries. If there are various levels of singers, a conflict regarding optimal copyright enforcement among them is more sever in a convex case than in a concave one.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 6, No. 1, 13-33, 2009
Michael Y. Yuan
Copyright has been increasingly internationalized and, recently, more and more harmonized. However, there has been little theoretical study of international copyright. This paper develops and analyzes a non-cooperative two-country model of copyright, where two countries trade in information goods and each with an open and competitive information goods industry sets copyright policy to pursue self-national interest. The model suggests that an increase in demand for information goods in a country calls for longer copyright protection in this country and shorter protection in its trading partner; decreases in fixed or per-product creative costs in a country with lower such costs call for marginally shorter protection; and an improvement in the economies of creative scale in a country with better economies of creative scale calls for marginally longer protection. Understanding these rational responses of nations to changes in creative technologies and markets should be helpful for international copyright-policy making.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 5, No. 2, 45-70, 2008
The quest for interoperability of interactive TV has been a major concern of the EU Institutions. Its policy foundations were built on the enabling role of open standards, whose peculiar standardization process should guarantee affordable and widespread intellectual property rights. After having received considerable public support and financial funds, the interactive TV roll-out appears disappointing, and the diffusion of the main concerned standard, the multimedia home platform, stagnates. We conduct a comprehensive analysis of the main market facts and passages of interactive TV policy, to derive a multifaceted assessment of its technological, economic and institutional drivers. Several important issues stand out. Besides the inner complexity of the policy, a few normative inconsistencies and conflicting aims adversely impacted its feasibility. Several logical ambiguities also dampened the correct choice of instruments. In particular, the existing literature clarifies two main points: open standards cannot be uncritically assimilated to open source software, and the role of open standards along the broadcasting value chain is largely unexplored. Consequently, their effects here might differ from those experienced in traditional information and communication technologies markets. Finally, a certain evidence of regulatory capture of the EU policy-maker emerges.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 5, No. 2, 127-148, 2008
Kit B. Chow
Started in November 2003, the study is the first in Asia to adopt the new comprehensive WIPO framework for measuring the economic magnitude of copyright-based industries. Singapore's copyright-based industries generated in 2001 an output of S$30.5 billion and value added of S$8.7 billion which was equivalent to 5.7% of GDP. The 29 copyright-based industries provided employment to 118,600 persons or 5.8% of Singapore's workforce in 2001. Through linkages with the rest of the economy, the combined nine core copyright industries are found to have greater-than-average impact on the economy as reflected in their higher output, value added and employment multipliers than that for the whole economy.Click to read more.
Review of Economic Research on Copyright Issues, Vol. 5, No. 2, 3-18, 2008
Frederic M. Scherer
This paper, written for a conference of the Society for Economic Research on Copyright Issues, explores the history of copyright protection for musical compositions. The first modern copyright law did not cover musical works. The role of Johann Christian Bach, Ludwig van Beethoven, and Johann Neopmuk Hummel in securing legal changes is traced. How Giuseppe Verdi exploited the new copyright law in Northern Italy is analyzed. The paper argues that Verdi, enriched by copyright protection, reduced his compositional effort along a backward-bending supply curve. However, his good fortune may have had a demonstration effect inducing other talented individuals to become composers. An attempt to determine the impact of legal changes on entry into composing is inconclusive. The paper shows, however, that a golden age of musical composition nevertheless occurred in nations that lacked copyright protection for musical works.Click to read more.