The Society for Economic Research on Copyright Issues

Review of Economic Research on Copyright Issues (RERCI)

RERCI Articles

Copyright in the Digital Age; Benefiting Users and Creators?

Review of Economic Research on Copyright Issues, Vol. 8, No. 2, 55-64, 2011

Peter Jenner

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Abstract

Copyright is supposed to establish a mechanism under which content users contribute to creators' income, thereby providing incentives for creators to create new and original content for end-users to consume. However, in the current digital environment one can suggest that this arrangement is breaking down. The necessary flow of content is not being achieved in such a manner as to provide a satisfactory flow of revenue back to the creators, or is it vice versa? It can also be argued that the copyright system is not providing enough revenue for distributors to provide the sort of services that users would like with the current pricing structures, use restrictions and rights complexity demanded by the major controllers of music copyrights. In this essay I consider the current state of affairs regarding the copyright system, and its effects for all participants along the value chain for protected content.

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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

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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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Should We Put Them in Jail? Copyright Infringement, Penalties and Consumer Behaviour: Insights from Experimental Data

Review of Economic Research on Copyright Issues, Vol. 1, No. 2, 81-95, 2004

Anna Maffioletti and Giovanni Battista Ramello

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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.

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RERCI

Review of Economic Research on Copyright Issues, Vol. 6, No. 2, 1-4, 2009

Richard Watt

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Abstract

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.

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Technological Transformation, Intellectual Property Rights and Second Best Theory

Review of Economic Research on Copyright Issues, Vol. 4, No. 2, 5-28, 2007

Richard G. Lipsey

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Abstract

Over the last decade, the research interests of myself and my co-authors have concerned economic growth, technological change and general purpose technologies - pervasive technologies that transform our whole society. Our many publications culminated in Economic Transformations: General Purpose Technologies and Long Term Economic Growth by Richard Lipsey, Kenneth Carlaw and Cliff Bekar (hereafter LCB). This work has only incidentally raised issues concerning intellectual property rights (IRPs). So what I will cover in this paper is first a brief survey of some of the historical parts of LCB. Then, I give some general discussion of economic policy with emphasis on second best issues and, finally, some of the IPR issues that arose incidentally in our work.

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More Music in Movies: What Box Office Data Reveals About the Availability of Public Domain Songs in Movies from 1968-2008

Review of Economic Research on Copyright Issues, Vol. 9, No. 2, pp. 31-54, 2012, Illinois Public Law Research Paper No. 11-23

Paul J. Heald , Peibei Shi, Jeffrey Stoiber and Qingyao Zheng

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Abstract

A previous empirical study suggested that as copyrighted songs transitioned into the public domain they were used just as frequently in movie soundtracks as when they were still legally protected.That study, however, did not account for the number people who viewedeach movie in the theater. Since the debate over copyright term extension centers on the continuing "availability" of works as they fall into the public domain, a better measure of the availability of songs in movies would account for the relative box office success of the movies in which the songs appear. The present study collects box office data for hundreds of movies from 1968-2008 in which appeared hundreds of songs and concludes that public domain songs were heard by just as many people in movie theaters before and after they fell into the public domain.

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The Efficiencies of Aggregation: An Economic Theory Perspective on Collective Management of Copyright

Review of Economic Research on Copyright Issues, 12(1/2), 26-45, 2015

Richard Watt

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Abstract

The existing economic theory of copyright collectives, or copyright management organizations (CMOs) is strongly focused on the benefits of sharing of transaction costs. Here, we appeal to the contractual environment of CMOs to offer a different perspective. Copyright collectives form contracts at two principle points along the supply chain. First, there are the contracts between the collective's members themselves (the copyright holders) for distribution of the collective's income. And second there are the licensing contracts that the collective signs with users of the repertory. Using standard economic theory, the paper argues that there are significant efficiency benefits from having copyrights managed as an aggregate repertory, rather than individually, based on risk-pooling and risk-sharing through the contracts between the members themselves. Similarly, there are also aggregation benefits (at least in terms of the profit of the CMO) of licensing only the entire repertory, rather than smaller sub-sets. Both of these theses are defended by appealing to existing economic theory literature in related fields. Interestingly, there is a link between these two theories of the efficiency of aggregation which lies at the heart of the theory of syndicates, and the characteristics that imply that the group (or syndicate as a whole) can be considered as a valid "representative", sharing the same preferences as each individual syndicate member.

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Sunk Costs, Free-Riding Justifications, and Compulsory Licensing of Interfaces

Review of Economic Research on Copyright Issues, Vol. 1, No. 2, 29-53, 2004

Net Le

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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.

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When Should the Bell Toll? The Economics of New Zealand's Debate on Indirect Liability for Internet Copyright Infringement

Review of Economic Research on Copyright Issues, Vol. 1, No. 1, 119-149, 2004

Alan E. Woodfield

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Abstract

This article evaluates proposed changes to New Zealand's copyright legislation in respect of potential secondary liability for copyright infringement by Internet service providers. Minor changes were envisaged in order to align the legislation with new international standards, with limitation of ISP liability along the lines of the UK Electronic Commerce Regulations 2002 recommended. Both zero liability and strict liability for web-hosting ISPs are correctly rejected, but the proposed uniform regulatory approach provides limited incentives for ISP monitoring effort and while proposed knowledge-based standards should largely prevent excessive permanent removal of legitimate material, the constructive knowledge test may be insufficient to encourage the removal of many infringing items. The counter-notification procedure may not prevent liability-conscious ISPs from removing excessive legitimate material on a temporary basis, and more radical solutions involving ISP purchase of their subscribers' posted material or compulsory ISP purchase of copyrights did not feature. The design of optimal copyright law is fraught with difficulties, however, and the Ministry's consultative processes and careful deliberations have done much to maintain a reasonable balance between the conflicting interests concerned.

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Copyright and Open Access for Academic Works

Review of Economic Research on Copyright Issues, Vol. 7, No. 1, 45-65, 2010

Frank Mueller-Langer and Richard Watt

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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.

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The WIPO Guide on Surveying the Economic Contribution of the Copyright Industries

Review of Economic Research on Copyright Issues, Vol. 1, No. 1, 5-15, 2004

Dimiter Gantchev

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Abstract

In July of 2002, the World Intellectual Property Organisation organised a working group of economists to study the methodologies that are appropriate when attempts are made to measure the economic contribution of copyright to a national economy, with the final objective being to produce a guide-book that will enable future studies to be made, all within a common methodological framework. Dimiter Gantchev, a consultant with WIPO, was encharged with the task of writing the resulting Guide-book.

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Introduction

Review of Economic Research on Copyright Issues, Vol. 2, No. 2, 3-15, 2005

Marcel Boyer and Gilles McDougall

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Abstract

The Society for Economic Research on Copyright Issues held its 2005 Congress in Montrýal, Canada. Some of the papers presented at that congress are contained in this issue of RERCI. This introduction also includes a report on the round table session which was held on the pricing of copyright. For the sake of this introduction, the presentations could be informally regrouped under three headings: the proper compensation principles for copyrights; the phenomenon of copying and sharing, including the piracy activity; the development of the open/free source software movement.

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The Economic Contribution of the Copyright-Based Sector in the Netherlands

Review of Economic Research on Copyright Issues, Vol. 1, No. 1, 65-69, 2004

Jules Theeuwes

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Abstract

It is hard if not impossible to quantify all the economic effects of press and publishing, arts, design, software and all other copyright-based sectors. Copyright sectors first of all produce value added and generate income; they create employment and contribute to the balance of payments. But the products and services have much wider implications and positive external effects on the economy than can be measured by adding up value added produced and employment generated. It is often tried to capture those more far reaching effects in general terms such as the 'knowledge economy' filled with 'creative workers' (see, for instance Florida, 2002). There is certainly truth in the general perception that creativity, which is the stuff, materialized in the goods and services produced by the copyright-based industry, can change the economy and have an influence on the well being of everybody. But it is impossible to capture this perception in hard numbers. Quite well doable however is to capture the measurable parts of the economic contribution in numbers. What I present in below is a measurement of value added and employment of the copyright-based industry in the Netherlands over the past decades. I will also briefly present numbers on the contribution of the copyright-based sector on imports and exports.

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Creative Pricing in Markets for Intellectual Property

Review of Economic Research on Copyright Issues, Vol. 2, No. 1, 39-44, 2005

William R Johnson

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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.

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The Use of Vertical Market Prices in Setting Copyright Tariffs and Rates

Review of Economic Research on Copyright Issues, 13(2), 66-82, 2016

Gerry Wall and Bernie Lefebvre

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Abstract

With the lack of direct markets to examine, copyright setting agencies often adopt a total proxy approach whereby other markets are used to formulate benchmark prices. In this paper, we utilize a "downstream" market to estimate the value to a commercial "rights user" of distant television signals. This "partial proxy" approach has two advantages: it uses data drawn from the distant signal market (i.e. vertical market information) and it uses actual market pricing data from buyers and sellers of programming content.
Using this data, we derive estimates of the wholesale market value of distant TV signals. Based on our analysis we find that the current per signal payment to distant signal rights-holders (as certified by the Copyright Board of Canada) is less than the actual market value of those signals.

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