Abstract

Technological changes over the past two decades have made it easier to distribute and to copy intellectual property. Creators and owners of intellectual property have responded to these changes with a variety of creative pricing strategies. The paper reviews some of these pricing innovations. Two broad categories of innovations are explored: those that facilitate price discrimination and those that exploit complementarities between different types of creative works.

Abstract

An extensive literature has developed that argues that in many settings the social welfare costs of copying or piracy are limited because of the presence of indirect appropriability. Indirect appropriability is the idea that original good producers can appropriate some of the value derived by the consumers of copies because of the return that buyers of original units receive from allowing copies to be made. In this paper we discuss the limitations of indirect appropriability, where the two we focus on are the "flooding" of the copy market and substitutability between new units and copies. We also discuss the ramifications of our analysis for real world markets.

Abstract

20 years ago, Stan Liebowitz's famous paper on indirect appropriability was published in the Journal of Political Economy. At the time, it would surely have been impossible to predict the impact that the paper, together with two or three others published in the same journal at around the same time, would have on the fledgling area of economics that was being re-born under the label of "the economics of copyright."

Abstract

This paper studies the case of cultural and creative goods that onstitute both private and common heritage assets and analyses the difficulties involved in protecting them by the means of IPRs. The specificities of non-cumulative and non-degenerative creative heritage assets prevent any universal model of protection and thus the building of a market of IPRs. The standard model of property rights is partially irrelevant depending on the specificities of cultural heritage assets. So strategic behaviours concerning the uses of cultural heritage assets can arise. Two creative industries are studied: Haute Couture and French Grande Cuisine.

Abstract

The purpose of this paper is to deepen the knowledge of consumer behaviour in information goods markets, taking as a reference the sound recording market. In particular, its aim is twofold: on the one hand it attempts to get new insights on consumers paying special attention to their willingness to pay and to purchasing behaviour; on the other hand it wants to find out whether the recently adopted increase in legal measures against consumers by industries can have positive effects on lowering copyright infringement and raising legal demand. Using experimental methods, we elicited individual preferences in legal and burned CDs. We used hypothetical as well as real choices. Our experimental results suggest that lawsuits can effectively lower the rate of copying because they raise the probability of being caught by consumers and thus punished. However, they do not necessarily raise legal sales since the measured consumer willingness to pay is generally lower than the market price for legal products. Consequently, increased copyright enforcement may only lead to demand withholding.

Abstract

We use a 1998-2002 cross-section dataset to analyze the claim of losses due to internet piracy made by the record industry. The results suggest that internet piracy played a significant role in the decline in music sales during the early days of file-sharing networks.

Abstract

Digital technology makes sophisticated means available to the general public for copying works with an equal level of quality to the originals and at increasingly lower prices. Unrestricted copying deprives producers and creators of a share of their potential earnings on the sale of originals. The whole of the traditional system for financing cultural creation could be at risk. There are three mainstays to the conventional financing system: the production of private goods, direct appropriability of revenues, temporary monopoly of exclusive rights. Each one has been called into question by P2P. Content has properties that are growing ever more similar to public goods, raising the question of whether public financing might be possible. Direct appropriability in customary markets is becoming ever more difficult, raising the question of whether new forms of appropriability might be possible, both direct and indirect. Exclusive rights are becoming increasingly ever harder to enforce, raising the question of other possible institutional solutions. To date, the solutions geared to tackling these issues have been largely defensive, and aimed at maintaining the old system's core characteristics (direct appropriability and exclusive rights) through DRM. However, a brief foray into economics literature can reveal some original alternatives solutions even if each one has its advantages and its drawbacks.

Abstract

The history of the copyright system appears to be approaching an end. A pressing question now is whether or not the particular manner of its passing will be one that proves seriously destructive for cultural vitality and the advancement of knowledge.

Abstract

This paper addresses two popular arguments against a compulsory license of software interface, using risk analysis methodology. These concerns are the non-recovery of sunk costs and the threats posed by free riders. My argument is that while both concerns are legitimate, they are remediable. The purpose of the law is not to allow the incumbent to recover its 'sunk costs', but to give sufficient incentives for it to innovate. These two incentives are the monetary incentives (finding fair access fees and stimulating cooperation with the entrants after the license) and the time incentive (finding a period during which refusal to license is acceptable). With respect to the fair amount of access fees, it is better to provide a mechanism so that the licensor and the licensee can negotiate the fees themselves, rather than to impose a strict method of fee calculation. If the monetary incentives alone are sufficient to generate motivation for innovation, the time incentive should not be used.

Abstract

Many countries are revisiting their Copyright law in the light of new communication and information technologies, which make possible the generalized digitization of copyrighted material and in so doing hallenge the protection and enforcement of copyrights. As the laws are modified to adapt to this new environment, the foundations of copyright have been questioned. I claim here that the affirmation and protection of a strong and transparent copyright framework is a second best efficient institutional arrangement to foster cultural development and diversity and promote the emergence of new market-like institutions reducing the costs of transactions between creators and users.

Abstract

The Information Society is closely linked to both communication processes and to the market exchange of information goods. Therefore the production of copyrighted works represents today a significant part, both quantitatively and qualitatively, of the economies of post-industrial countries. And in this scenario copyright is increasingly playing a pivotal role in markets.

Abstract

Unlike television broadcasters, who must negotiate with the copyright owners before they can broadcast movies, radio broadcasters need not negotiate with the copyright holders for the sound recordings broadcast on radio. In the United States radio broadcasters have no obligations whatsoever to the copyright owners of the sound recordings (although they do have obligations to the copyright holders of the music contained in the sound recording). The reason for this discrepancy appears to be that radio broadcasters have argued, and it is generally accepted, that radio play benefits record sales and thus there is no need for radio broadcasters to purchase the rights to broadcast the sound recording. This impact of radio play on record sales is commonly referred to as a "symbiotic" relationship between these two industries. Yet there appears to be no systematic examination of this relationship. In this paper I present evidence indicating that radio play does not benefit overall record sales. There are obvious implications for copyright. I also examine, by way of comparison, television's negative impact on the movie industry.

Abstract

Licensing of copyrighted material can contribute to welfare. But what fee is socially desirable fee? The owner's marginal cost of licensing is often near zero, but P = MC = 0 is arguably neither equitable nor an efficient incentive for further creative activity. Here two fee-setting approaches are described, assuming copyright rules are pre-established and determine the holder's earnings, absent licensing. One approach is Ramsey pricing, theoretically second best and able to preserve the copyholder's earnings. The second is 'parity pricing', as derived in the price-regulation literature, which can ensure effective free entry into commercial use of the licensed material.

Abstract

Many of the concerns expressed here were brought up in WIPO meetings in which I took part. Excellent work has been done on the preparation of the WIPO Handbook and by the various researchers in the classification of data and of solving measurement problems. They are a testimony to the power of rigorous economic thinking and professionalism.

Abstract

In this paper, I have suggested the possibility of a simple calculation that returns a lower bound on the total contribution of copyright to GDP, once the groupings between the core, and unrelated activities has been made, but independently of the exact weights that should be assigned to the activities that are not in either of these two groups (i.e. those that remain in the related group). On the other hand, in order to do this it was necessary to take a particular definition of exactly what particular activities should be included in the related group (activities that, without having a copyright factor of 1, are on average at least as dependent upon copyright as is the economy as a whole). Thus, with a relatively low level of effort, one can get what appears to be quite an accurate, but still only intended as a rough estimate, answer to the question of exactly what is the total contribution of copyright to GDP.