Abstract

The first decade of the new millennium has been the decade of digital distribution for media products. All products that can be digitized have either been affected, or will soon be. Since the early days of the Internet, piracy has emerged as an important threat to media firms. But new technology also brings an opportunity for firms to engage in new models of pricing. Many of these new forms of pricing produce revenue that is not readily attributed to particular owners, making it necessary for sellers to create new methods for sharing revenue, or pie-splitting. Affected industries have mobilized to enact a number of non-market responses, including recent efforts to induce Internet Service Providers to control the flow of unpaid content through their pipes. This essay reviews the threats, opportunities, and challenges to media firms that have emerged over the past decade, with attention to piracy, pricing, pie-splitting, and pipe control.

Abstract

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.

Abstract

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.

Abstract

The US Congress has enacted expansions of copyright which arguably impose high social costs and generate little incentives for authorial creativity. When the two most expansive statutes were challenged as unconstitutional, the US Supreme Court rebuffed the challenges, partly on the supposed ground that copyright law could legitimately seek to promote non-authorial interests; apparently, Congress could enact provisions aiming to support non-creative disseminative activities such as publishing, or restoring and distributing old film stock, even if authorial incentives were not served. Such an error might have arisen because of three phenomena (in economics, history, and law, respectively) that might easily be misunderstood but which, when unpacked, no longer lead plausibly to a stand-alone embrace of disseminator interests. The purpose of this article is to analyse and comment on this error from several relevant points of view.

Abstract

At present, Vietnam is regarded as the most notorious country regarding copyright infringement. China, joining WTO in 2001, has since implemented strict copyright measures. Even though Vietnam has laws covering intellectual property rights, enforcement is almost non-existent. We investigated how unauthorized P2P file-sharing affects copyright infringement in Vietnam. We assumed, before visiting Vietnam, that P2P file-sharing was more popular than pirated CDs and DVDs. However, few people there knew of its existence. Even when they did, they were unwilling to use it. Another astonishing fact was how pirated CDs play a role in promoting singers who relied on stage performances. Singers were not eager to support copyright enforcement. In this paper we consider these situations and explain how such behavior is commonplace in Vietnam.

Abstract

In recent decades, the problem of illegal downloading of copyrighted material has emerged as a major concern for governments across the globe. Many countries have implemented policies to limit the impact of online piracy on revenues of creative industries. These policies, while important for a broad range of industries, have been particularly lobbied for and supported by the motion pictures industry. Film production and distribution companies have repeatedly asserted that effective anti-piracy policy is crucial to their continued success. This paper seeks to evaluate whether the anti-piracy regimes in OECD countries have been effective. It also seeks to determine whether there are patterns to the types of policies that have been especially effective or ineffective.

Abstract

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.

Abstract

The last few decades have seen enormous growth in piracy of copyrighted goods and, in particular, an enormous growth in piracy of creative works that employ a digital format. In this paper we discuss classic theory related to the piracy issue, provide a brief history of the growth of piracy over the last few decades, and then discuss issues concerning the present situation. We conclude with speculation concerning the future of piracy, where one of our main points is that, at least for the developed world, there are important reasons for believing that piracy is likely to continue to grow.

Abstract

Performance rights organizations (PROs) provide transactional efficiency for music users and copyright owners by negotiating contracts, collecting revenue, and paying royalties for the rights to publicly perform musical compositions, thereby replacing their need to deal individually with one another in bilateral licensing. Historically, performance rights for catalogued works have been made available to users through blanket licenses, which convey the rights to perform, or have performed on licensed premises, all registered works in the corresponding catalog of registered works. While blanket licenses may enhance transactional efficiency, the same licenses are sometimes recognized as anticompetitive restrictions that compel each user to make an all or nothing choice that may force acceptance of a full license contract in place of a less inclusive alternative that may actually be preferred. Competitive concerns at the Antitrust Division of the U.S. Justice Department regarding blanket licensing at ASCAP and BMI led to a separate series of Consent Decrees for each of the two major PROs in the U.S.
To explore the disparate claims of economic efficiency, the paper finds that concepts from public utility regulation may be particularly helpful. Three characteristics are considered: where prices are subsidy-free, whether license provision is a natural monopoly, and whether any competitive submarkets can be structurally separated from the regulated core.

Abstract

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.

Abstract

The paper investigates empirically the behavior of copiers over P2P networks based on an ordered Logit model of intensity using a dataset collected from more than 2,500 French households. In accordance with the prediction of the Beckerian framework, copying behavior is negatively correlated with the willingness to pay for an original when a copy is available. But individuals also make their decisions according to their social neighborhood and to the degree to which they have learned about copying. Furthermore, we find that copiers are motivated by the search for diversified contents, and they are also very concerned about the interests of artists. We then consider the efficiency of anti-copying policies on the copying of music and movies.

Abstract

In a recent paper, Prof. Steven Shavell (see Shavell, 2009) has argued strongly in favor of eliminating copyright from academic works. Based upon solid economic arguments, Shavell analyses the pros and cons of removal of copyright and in its place to have a pure open access system, in which authors (or more likely their employers) would provide the funds that keep journals in business. In this paper we explore some of the arguments in Shavell’s paper, above all the way in which the distribution of the sources of journal revenue would be altered, and the feasible effects upon the quality of journal content. We propose a slight modification to a pure open access system which may provide for the best of both the copyright and open access worlds.

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 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.

Abstract

This paper tries to convey the problems we government economists face in weighing up the evidence around copyright policy, and how the academic and grey literature plays a role in this. This is with particular reference to the recent review of the IP framework in the UK - the Hargreaves Review - and the reforms which are now being planned. The paper outlines the proposed changes and tries to raise the research questions which will need to be answered for Government to take these reforms forward. My primary aim in this paper is to emphasise that we are looking for help in gathering this evidence, and secondly to show that the institutions of Government can make it very hard for us civil servants to find all the relevant answers, as we often don't know who to ask, or have the time to ask. I try to illustrate this by going through one aspect of the evidence we believe we have, and look in some detail at a very influential piece of 'lobbynomics' on the cost of infringement. The purpose of this is to share the view from the other side of the policy debate, and to invite the reader inside the bubble that can be government policy making, all the while trying to get out of said bubble.