The Society for Economic Research on Copyright Issues

Review of Economic Research on Copyright Issues (RERCI)

RERCI Articles

Transactions Costs and Administered Markets: License Contracts for Music Performance Rights

Review of Economic Research on Copyright Issues, Vol. 3, No.1, 61-74, 2006

Michael A. Einhorn

Downloads:  904


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.

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Truce in the Copyright War? The Pros and Cons of Copyright Compensation Systems for Digital Use

Review of Economic Research on Copyright Issues, 2018, 15(2), 23-56

Christian W. Handke, João Quintais and Balázs Bodó

Downloads:  900


Abstract

This paper discusses copyright compensation systems (CCS) -- that provide licenses for downloading and non-commercial use of copyright works in return for a fee -- in the light of welfare economics and transaction cost economics. Recent empirical studies suggest that CCS could improve social welfare at least for recorded music. The general theme of the theoretical discussion in this paper is a simplicity-flexibility trade-off. On the one hand, CCS seek to reduce the costs of administering and trading copyrights online. On the other hand, standard copyright licenses distort the market mechanism. This paper discusses the costs and benefits of various CCS proposals compared to alternative ways of managing copyright online.

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Restricting Access to Books on the Internet: Some Unanticipated Effects of US Copyright Legislation

Review of Economic Research on Copyright Issues, Vol. 5, No. 1, 23-53, 2008

Paul A. David and Jared Rubin

Downloads:  897


Abstract

One manifestation of the trend towards the strengthening of copyright protection that has been noticeable during the past two decades is the secular extension of the potential duration during which access to copyrightable materials remains legally restricted. Those restrictions carry clear implications for the current and prospective costs to readers seeking "on-line" availability of the affected content in digital form, via the Internet. This paper undertakes to quantify one aspect of these developments by providing readily understandable measures of the restrictive consequences of the successive modifications that were made in U.S. copyright laws during the second half of the twentieth century. Specifically, we present estimates of the past, present and future number of copyrighted books belonging to different publication-date "cohorts" whose entry into the public domain (and consequent accessibility in scanned on-line form) will thereby have been postponed. In some instances these deferrals of access due to legislative extensions of the duration of copyright protection are found to reach surprisingly far into the future, and to arise from the effects of interactions among the successive changes in the law that generally have gone unnoticed.

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Exclusion, Competition and Change: The Shifting Boundaries of the Television Market

Review of Economic Research on Copyright Issues, Vol. 5, No. 1, 55-74, 2008

Giovanni Battista Ramello and Francesco Silva

Downloads:  872


Abstract

The aim of this work is to analyse the evolution of pay-TV as an example of the dynamics that characterise the media sector and in which copyright has played a pivotal role. In one simplified representation, we can identify two crucial levels on which the market is shaped: that of content, governed by copyright, and that of distribution. Control over each of these levels offers, in different ways, leverage for orienting the market, and has thus been an object of the strategies of firms. On the whole we can say that the innovation path characterising media markets extends beyond the purely technological sphere to also embrace the market as an "organisational technology" for production and exchange. Hence, the competitive process, so important for defining the market configurations, must be discussed from an intertemporal perspective in which technological choices, the regulatory framework and control of copyrights can be viewed as both exogenous and strategic variables manipulated by firms to obtain profits.

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Copyright: A Plea for Empirical Research

Review of Economic Research on Copyright Issues, Vol. 3, No. 2, 3-13, 2006

Ivan P. L. Png

Downloads:  868


Abstract

I review empirical research into the economic impact of copyright law. A key difficulty is that there is little systematic measurement of creative output and copying: there are only fragmentary statistics for the various industries. Studies of U.S. copyright registrations provide conflicting results: one shows that small changes in fees have large impacts on renewals, while another shows that many movies and books have long lives. All but one studies find that music piracy - whether conventional or digital - has hurt legitimate CD sales. Studies of extensions of copyright duration yield conflicting results: one focusing on U.S. registrations finds no effect, while a multi-country study finds that extensions are associated with substantial increases in movie production. I conclude with directions for future empirical research.

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Intellectual Property in Software Development: Trends, Strategies and Problems

Review of Economic Research on Copyright Issues, Vol. 4, No. 1, 15-25, 2007

Knut Blind

Downloads:  848


Abstract

This paper analyses the impacts of the recent discussion to extend patentability to computer-implemented inventions, i.e. to allow software patents, in Europe. Based on two surveys among the German software sector referring to the use and importance of IPR in the year 2000 and 2004, the analysis finds that the share of companies using patents in the software sector remains constant, but the relevance of this instrument increased significantly for the active users of patents. Based on a set of hypotheses on the determinants for the use of patents, we also find changes. The size bias of patent use increased, whereas there is a dichotomy between using patents and following the open source model in the software sector and not a convergence, as has been suggested by the anecdotal evidence of some large multinationals. These changes in the software sector generate several new challenges for policy makers responsible for the IPR regime relevant for software in addition to the still unsolved question of extending patentability to software in Europe.

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The Recording Industry's Digital Dilemma: Challenges and Opportunities in High Piracy Markets

Review of Economic Research on Copyright Issues, Vol. 2, No. 2, 83-94, 2005

Brett Keintz

Downloads:  844


Abstract

Globally, the recording industry has experienced significant revenue decline and piracy growth within the last five years. In some countries like the United States, piracy is comprised mainly of the illegal sharing of digital recorded music files such as MP3s. In other countries like Spain, recorded music piracy is dominated by the physical production and sale of CD-Rs by organized crime networks. While there have been a number of legislative and law-enforcement changes made in many countries across the globe, these defensive efforts have at best served to slow piracy's growth. The next step for the recording industry is to develop a recorded digital music strategy for each country in an effort to restore revenue growth and reduce piracy by offering consumers a compelling digital music value proposition. In this paper, I explain why.

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Issues in Assessment of the Economic Impact of Copyright

Review of Economic Research on Copyright Issues, Vol. 1, No. 1, 27-40, 2004

Robert Picard and Timo Toivonen

Downloads:  838


Abstract

This article explores methods and issues in measuring the contributions of copyright industries to national economies. It reveals the importance of copyright value creation, identifies copyright industries and activities that make economic contributions, discusses problems of measurement, compares methods used and reveals difficulties in comparability of existing research, and provides suggestions for improving and undertaking future research.

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A Taxonomy of Empirical Research on Copyright - How Do We Inform Policy?

Review of Economic Research on Copyright Issues, Vol. 9, No. 1, 47-92, 2012

Christian Handke

Downloads:  829


Abstract

This paper summarizes key results in the empirical literature on unauthorized copying and copyright, and puts them into context. Casting the net more widely than previous surveys, it highlights noteworthy gaps and contradictions in the literature. There is initial evidence, for example, that the economic effects of digital copying vary between different industries, but these differences are not yet well understood. Most importantly, the empirical literature is unbalanced. The bulk of econometric research has focused on unauthorized copying and rights holder revenues. Little is known about the implications for user welfare, for the supply of copyright works, or about the costs of running a copyright system - and the preliminary evidence is often quite surprising. Much work on these issues remains to arrive at reasonable implications for copyright policy.

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Copyright Auctions and the Asset Value of a Copyright Work

Review of Economic Research on Copyright Issues, 13(2), 83-99, 2016

Ruth Towse

Downloads:  828


Abstract

Research on the economic history of copyright and music publishing turned up an unusual source of data on the value of copyrights, namely detailed accounts of public auctions of musical items that were held in London between 1794 and 1960 of, inter alia, copyrights and the engraved plates from which musical works were printed. The standard contract between song writers/composers and music publishers in the 19th century bought out all rights and therefore the sale of the plates was also the sale of the copyright to the work, enabling the new owner to print and distribute the work. The sales also facilitated entry into and exit from the industry.
This paper describes the historical circumstances of copyright and the market for printed music and presents some of the more notable data, with calculations of their present day values. Though insufficient for a full statistical analysis, the paper provides some hard evidence of the asset value of copyright in musical works as perceived by the music publishers of those times. The paper also suggests a basis for further research.

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Open Standards and Interoperability in EU Digital TV: Economics and Policy Issues

Review of Economic Research on Copyright Issues, Vol. 5, No. 2, 45-70, 2008

Nicola Matteucci

Downloads:  828


Abstract

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.

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Forever Minus a Day? Calculating Optimal Copyright Term

Review of Economic Research on Copyright Issues, Vol. 6, No. 1, 35-60, 2009

Rufus Pollock

Downloads:  826


Abstract

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.

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Accounting for Creativity: Lessons from the Economic History of Intellectual Property and Innovation

Review of Economic Research on Copyright Issues, 2020, vol. 17(1), pp. 1-37

B. Zorina Khan

Downloads:  823


Abstract

Social progress depends on the realization of inventive ideas, and economic history provides valuable lessons about creativity in technology and culture. The empirical study of over one hundred thousand innovative individuals who obtained patents, copyrights, and prizes, sheds light on the relationship between institutions, incentives, and transformative ideas and expression, over the past two centuries. The European growth model assumed useful knowledge was scarce, and top-down administered innovation systems offered rights and rewards to "exclusive" groups. By contrast, American policies regarded creativity as widely distributed in the general population, and further promoted "inclusive" market-oriented mechanisms that fostered diversity in ideas and outcomes. The evidence suggests that property rights in patents facilitated markets in ideas, and ensured that returns were aligned with productivity and market demand. Whereas, such administered systems as innovation prizes and publisher's copyrights in the "creative industries" benefited the few rather than overall social welfare.

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Value Based Pricing of Music

Review of Economic Research on Copyright Issues, 12(1/2), 16-25, 2015

T. Randolph Beard, George S. Ford and Michael L. Stern

Downloads:  816


Abstract

In the regulatory setting of rates for statutory-licensed music services, the question of value-based versus cost-based rate setting for the component-rights of a musical performance arises. In this article, we have demonstrated this value-or-cost question is a distinction without a difference. Starting with the value-based concept of second-best (or Ramsey) prices, we end with a result prescribing that cost differences should be fully reflected in compensation across the inputs to the music recording. Each price is set so that the costs are covered, no more and no less.

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Economics of Copyright Collecting Societies and Digital Rights: Is There a Case for a Centralised Digital Copyright Exchange?

Review of Economic Research on Copyright Issues, Vol. 9, No. 2, 3-30, 2012

Ruth Towse

Downloads:  810


Abstract

Copyright collecting societies have attracted economists' attention for over 30 years and the attention of government regulators for even longer. They have typically been accepted by economists and by courts of law as necessary for reducing transaction costs and enabling copyright to work. The advent of digitization has led to renewed interest in the topic and to the view that though new technologies offer the possibility of improved rights management, collecting societies are not responding sufficiently to these opportunities. That view was evident in recent enquiries into the role of copyright in the digital age in the UK, which proposed the formation of a Digital Copyright Exchange (DCE) that would promote online digital trade. This paper evaluates the case for the DCE in the light of what economists know about collective rights management.

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