The Society for Economic Research on Copyright Issues

Review of Economic Research on Copyright Issues (RERCI)

RERCI Articles

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

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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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Patent and/or Copyright for Software: What Has Been Done So Far?

Review of Economic Research on Copyright Issues, Vol. 4, No. 1, 3-14, 2007

Richard Watt

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Abstract

The particular case of software seems to have stretched the patent-copyright divide to the point of breakage. Inspite of being traditionally excluded from patent, software is an obvious case of a single creation that embodies both expression and innovation, and so strong arguments exist for software to be both copyrightable and patentable material. The legal profession has looked carefully at the patentability of software over the past 15 years or so, both from a fully legal perspective, and using economic-type arguments. But we are still waiting for the economics profession per sé to set to work on this issue. Here, I shall go through some of the most well known arguments surrounding the protection of software, and then put forward a personal opinion as to what theoretical economists are likely to add, if and when they include this important question on their research agendas.

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Radio Airplay, Digital Music Sales and the Fallacy of Composition in New Zealand

Review of Economic Research on Copyright Issues, Vol. 7, No. 1, 67-81, 2010

Mehnaz Bandookwala

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Abstract

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.

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Competition Policy, Patent Pools and Copyright Collectives

Review of Economic Research on Copyright Issues, Vol. 8, No. 2, 3-34, 2011

Nancy Gallini

Downloads:  692


Abstract

This paper analyzes and compares two types of cooperative agreements that combine Intellectual Property (IP): patent pools and copyright collectives. I evaluate antitrust policy in three environments in which owners of the intellectual property (IP): (1) are vertically integrated into the downstream (product) market; (2) face competition in the upstream (input) market and (3) own downstream products that do not require a license on the pooled IP but compete with products that do. Although patent pools and copyright collectives differ in purpose, membership size and market conditions, their efficiency implications are qualitatively similar in each of the three situations. Therefore, a uniform rather than IP-specific competition policy is appropriate for pools and collectives, thus lending economic support for the approach followed by antitrust authorities toward IP-related cooperative agreements.

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Efficiency Considerations in Copyright Protection

Review of Economic Research on Copyright Issues, Vol. 1, No. 2, 11-27, 2004

Marcel Boyer

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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.

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Intellectual Property and the Efficient Allocation of Social Surplus from Creation

Review of Economic Research on Copyright Issues, Vol. 2, No. 1, 45-67, 2005

Michele Boldrin and David K. Levine

Downloads:  687


Abstract

In the modern theory of innovation, monopoly plays a crucial role both as a cause and an effect of creative economic activity. Innovative firms, it is argued, would have insufficient incentive to innovate should the prospect of monopoly power not be present. This theme of monopoly runs throughout the theory of growth, international trade, and industrial organization. We argue that monopoly is neither needed for, nor a necessary consequence of innovation. In particular, intellectual property is not necessary for, and may hurt more than help, innovation and growth. We show that, in most circumstances, competitive rents allow creative individuals to appropriate a large enough share of the social surplus generated by their innovations to compensate for their opportunity cost. We also show that, as the number of pre-existing and IP protected ideas needed for an innovation increases, the equilibrium outcome under the IP regime is one of decreasing probability of innovation, while this is not the case without IP. Finally, we provide various examples of how competitive markets for innovative products would work in the absence of IP and critically discuss a number of common fallacies in the previous literature.

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Copyright from an Institutional Perspective: Actors, Interests, Stakes and the Logic of Participation

Review of Economic Research on Copyright Issues, Vol. 4, No. 2, 65-97, 2007

Antonina Bakardjieva Engelbrekt

Downloads:  681


Abstract

This article investigates recent developments in copyright, proceeding from a participation-centred comparative institutional approach (Komesar, 1994). Following institutional theory, the approach implies conceiving of the market, the political process (legislatures and administrative agencies) and the courts as alternative decision-making processes in the area of copyright law and policy. It emphasises the importance of institutional choice, based on careful comparison of the modalities for participation of different interests in these processes.
Novel digital and information technologies influence the conditions for participation in copyright decision-making at all levels and unsettle previously established institutional equilibriums. In the wake of the Infosoc Directive, a dynamic process of institutional adjustment seems to be unfolding in the Member States of the European Union whereby a variety of private, public and mixed institutional schemes for interpretation and enforcement of the new digital copyright are emerging, seeking to reconcile the interests of a variety of old and new stakeholders. This dynamism is interpreted as a search for appropriate decision-making institution to mitigate the consequences of an expansive legislative copyright policy as materialized in the Infosoc Directive and to re-establish a balance of rights and obligations. It is argued that the institutional design of these schemes and the modalities for actor participation will be crucial for their sustainable success and seem therefore to deserve more careful scrutiny. At the same time, the conservative force of institutional legacies is emphasized as a factor deterring institutional innovation.

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The Spanish Copyright Commission (Section I) Within the European Legal Framework

Review of Economic Research on Copyright Issues, 14(1/2), 39-44, 2017

Raul Rodriguez

Downloads:  680


Abstract

Directive 2014/26/EC foresees that EU member States shall ensure that disputes between collective management societies and users concerning, in particular, existing and proposed licensing conditions or a breach of contract can be submitted to a court, or if appropriate, to another independent and impartial dispute resolution body where that body has expertise in copyright law. The Spanish Copyright Commission (Section I) aims to be that body in Spain. In order to reach this objective, the Commission has been empowered with new functions that will probably reduce the existing conflicts related to copyright licensing.

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Considering the Risk Dimension in the Administration of Copyright

Review of Economic Research on Copyright Issues, Vol. 5, No. 1, 75-87, 2008

Ana Maria Tetrel

Downloads:  680


Abstract

In the law and economics literature of copyright, the economic function of collecting societies has been principally treated as a way to diminish transaction costs. However, another possible function, the transfer of risk as a function of collective administration has been, relatively, ignored. Through risk analysis, an author will be able to determine which method of administration of protected rights is most beneficial to him. Due to information asymmetries, authors and users bear a number of risks. These risks can be transferred to a collecting society which is in a better position to bear them more efficiently and to better administer the protected rights.

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Free Software and Intellectual Property in Brazil: Threats, Opportunites and Motivations

Review of Economic Research on Copyright Issues, Vol. 2, No. 2, 95-109, 2005

Antonio M. Buainain and Cassia I. C. Mendes

Downloads:  678


Abstract

This article discusses the implications of the intellectual property system as applied to software, especially the use of patents, for innovation in developing countries; it also assesses the possible consequences of the appearance of free software and a new intellectual property system in the innovation process in countries such as Brazil; finally, it attempts to analyse the new dimension of intellectual property as well as its context in the current debate on 'global patents' as opposed to a more flexible copyright system. Some of the questions discussed are: Is a more flexible copyright system an instrument to promote technological innovation? Does the reduction of the income of some software companies in developed countries point toward an exhaustion of the sales model of user licenses for software? What are the threats and opportunities for the new business model based on free software and copy left in Brazil? Can the motivations for the use and development of free software promote the Brazilian software industry?

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The Past and the Future of the Economics of Copyright

Review of Economic Research on Copyright Issues, Vol. 1, No. 1, 151-171, 2004

Richard Watt

Downloads:  678


Abstract

The economics of copyright as such has certainly come of age. About 70 years has passed since the very first time that economists gave serious thought to the copyright system, although it has been only during the last 20 years that the literature has flourished. In this paper an overview of the general topic of the economics of copyright is given, and the areas that have already be touched upon are discussed. Then, a speculative answer is attempted to the question of what the near future will hold.

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The Efficiency of Droit De Suite: An Experimental Assessment

Review of Economic Research on Copyright Issues, Vol. 9, No. 1, 93-121, 2012

Maryam Dilmaghani and Jim Engle-Warnick

Downloads:  677


Abstract

Droit de suite entitles visual artists to a percentage share of the resale price every time their works are resold over a given time span. The legal systems of the world do not universally accept the concept of droit de suite, and its economic efficiency has been a matter of debate for a few decades. In this paper, we model a work of art as a lottery to investigate experimentally the impact of this right on the art market. We find evidence that a number of known behavioral biases in decisions under uncertainty affect a seller’s willingness to accept. In light of our results, we conclude that the interaction of these biases and droit de suite can reduce the number of transactions in the art market to a larger extent than previously suggested in the literature.

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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:  673


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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Introduction to RERCI Vol 14(1/2)

Review of Economic Research on Copyright Issues, 14(1/2), 0, 2017

Richard Watt

Downloads:  664


Abstract

Introductory comments to the present issue of the journal.

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Profitable Piracy in Music Industries

Review of Economic Research on Copyright Issues, Vol. 6, No. 1, 1-11, 2009

Koji Domon and Tran D. Lam

Downloads:  663


Abstract

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.

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