The Society for Economic Research on Copyright Issues

Review of Economic Research on Copyright Issues (RERCI)

RERCI Articles

The Limits of Indirect Appropriability in Markets for Copiable Goods

Review of Economic Research on Copyright Issues, Vol. 2, No. 1, 19-37, 2005

Justin P. Johnson and Michael Waldman

Downloads:  752


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.

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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

Downloads:  751


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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Figuring It Out: Applying economics to copyright royalty rates for streamed music

Review of Economic Research on Copyright Issues, 2020, vol. 17(2), pp. 1-22

Ruth Towse

Downloads:  744


Economists are often, even regularly, used as consultants to the various parties involved in the process of regulating copyright and as witnesses in court procedures to set royalty rates. What insights from economic analysis do they offer? Are their contributions widely accepted or controversial? The article offers two case studies relating to streamed music: the US Copyright Royalty Board (CRB)’s judgement on Phonorecords III, and the discussion on ‘usercentric’ versus ‘pro rata’ methods for distributing music streaming royalties by CMOs. Both clearly demonstrate the conflict between efficiency and equity principles; however the main focus of the article is the extent to which ‘platform economics’ was adopted in the discussions of music streaming and how, if at all, that approach influenced procedures.

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Guest Editors' Foreword

Review of Economic Research on Copyright Issues, Vol. 1, No. 2, 1-3, 2004

Francesco Silva and Giovanni Battista Ramello

Downloads:  710


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.

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Collective Management of Music Copyright in China: Insights for the Regulation of the Monopolistic and Monopsonistic Power of the Music Copyright Society of China from a Comparative Legal Approach

Review of Economic Research on Copyright Issues, vol. 17(2); 23-52

Qinqing Xu

Downloads:  649


This paper discusses the regulations which limit the monopolistic and monopsonistic power of the Music Copyright Society of China (MCSC) in the context of the broader legal framework for the collective management of music copyright in China. The paper identifies "inadequate regulation" as a major cause of the misuse of such market power by the MCSC. Using a comparative approach, the paper analyses the regulatory regime that addresses the abuse of the market power of the American Society of Composers, Authors, and Publishers (ASCAP) and Broadcast Music, Inc. (BMI), the two oldest performing rights organisations (PROs) in the United States. Drawing lessons from the United States experience, this paper challenges the notion that establishing more musical collective management organisations (CMOs) in China would decrease the monopolistic and/or monopsonistic power of the MCSC. While the Chinese Anti-Monopoly Law cannot be applied to regulate the market power of the MCSC, this paper advocates for improving the current Regulations on Copyright Collective Administration (RCCA) as an alternative option for preventing the misuse of power by the MCSC.

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A Response to Prof. Shavell's 'Should Copyright of Academic Works Be Abolished?'

Review of Economic Research on Copyright Issues, Vol. 7, No. 1, 31-44, 2010

Hossein Nabilou

Downloads:  629


Undoubtedly, the idea of strong property rights is the underlying idea of economics and one of the main sources of economic incentive. In his paper, Prof. Shavell (see Shavell, 2009) seems to question and eventually impugn the idea of the economic efficiency of property rights in the market place of ideas in the academic world. In this regard, I will criticize his paper with the economic methods and will explain how Prof. Shavell's idea of the abolishing copyrights for the academic works might suffer from inconsistencies and also lacks the merits in generating a more economically efficient atmosphere for the academic works.

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Should Different Information Economies Have the Same Duration of Copyright?

Review of Economic Research on Copyright Issues, Vol. 6, No. 1, 13-33, 2009

Michael Y. Yuan

Downloads:  600


Copyright has been increasingly internationalized and, recently, more and more harmonized. However, there has been little theoretical study of international copyright. This paper develops and analyzes a non-cooperative two-country model of copyright, where two countries trade in information goods and each with an open and competitive information goods industry sets copyright policy to pursue self-national interest. The model suggests that an increase in demand for information goods in a country calls for longer copyright protection in this country and shorter protection in its trading partner; decreases in fixed or per-product creative costs in a country with lower such costs call for marginally shorter protection; and an improvement in the economies of creative scale in a country with better economies of creative scale calls for marginally longer protection. Understanding these rational responses of nations to changes in creative technologies and markets should be helpful for international copyright-policy making.

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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

Downloads:  448


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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Victor Hugo Betrayed: The Domain Public Payant as Intended in the 19th Century and as Implemented Today

Review of Economic Research on Copyright Issues, 2021, 18, 56-80

Maximiliano Marzetti

Downloads:  272


This article traces the origins and evolution of the paying public domain (or domaine public payant), from its foundations in 19th century France, particularly as exposed in two famous speeches delivered by Victor Hugo, to its current versions in force in a handful of Latin American and African countries. We analyse the economic aspects of the copyright-public domain relationship. We emphasise the contrasts between original and contemporary versions of the paying public domain and provide a hypothesis to explain its mutation and subsistence.

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Decreasing Copyright Enforcement Costs: The Scope of a Graduated Response

Review of Economic Research on Copyright Issues, Vol. 6, No. 2, 13-29, 2009

Olivier Bomsel and Heritiana Ranaivoson

Downloads:  264


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.

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Law and Innovation in Copyright Industries

Review of Economic Research on Copyright Issues, Vol. 6, No. 1, 61-82, 2009

Matthew J. Baker and Brendan Michael Cunningham

Downloads:  200


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.

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Copyright Enforcement and Quality Differentiation on the Internet

Review of Economic Research on Copyright Issues, 10(2), 27-54, 2013

Marine Lefort

Downloads:  158


Right-holders can create differences between their cultural goods to attract consumers with varying levels of willingness to pay. Some Internet intermediaries propose similar choices but do so without authorization. In this paper, we present a theoretical model of copyright piracy in which a rightholder competes in price with an Internet intermediary in a leader-follower game. The Internet intermediary provides two types of streaming goods (with and without restrictions). Copyright and intellectual property rights on the Internet are subject to ex-post adjudication. This means that enforcement can lead to uncertainty regarding Internet intermediaries' liability. We analyze how copyright enforcement and quality differences impact price competition. Our analysis suggests that law uncertainty plays a role in an intermediary's decision to enter the market, and thus that quality has an impact on law enforcement efficiency.

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Copyright & Endogenous Market Structure: A Glimpse from the Journal Publishing Market

Review of Economic Research on Copyright Issues, Vol. 7, No. 1, 7-29, 2010

Giovanni Battista Ramello

Downloads:  144


This article explores the journal publishing industry in order to shed light on the overall economic consequences of copyright in markets. Since the rationale for copyright is among others to promise some market power to the holder of the successful copyrighted item, it also provides incentives to preserve and extend market power. A regular trait of copyright industries is high concentration and the creation of large catalogues of copyrights in the hands of incumbents. This outcome can be observed as the aggregation of rights and is one of the pivotal strategies for obtaining or extending market power, consistently with findings in other cases. Journal publishing is no different in this respect from other copyright industries, and in the last decade has experienced a similar trajectory, leading to a highly concentrated industry in which a handful of large firms increasingly control a substantial part of the market.
It also provides a clear example of the effect of copyright dynamics on market structure, suggesting that a different attitude should be taken in lawmaking and law enforcement.

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Music Licensing For Non-Interactive and Other Radio-Style Services: Is It Finally Time To Move Away From Blanket Licensing?

Review of Economic Research on Copyright Issues, 2021, 18, 1-25

Jacob B. Ebin and David Reitman

Downloads:  110


Advances in technology over the last two decades have led to significant changes in the way that music is consumed, with music streaming services now being the dominant means through which people listen to music and the primary means through which music copyright own- ers monetize their intellectual property. The way that music rights are licensed by these digital streaming services, however, has not meaningfully changed. Blanket or collective licensing is still the norm and the marketplace is almost entirely devoid of any actual price competition between rightsholders to have their music performed. But some of the same technological advancements that have allowed digital streaming to emerge also can be used to transform the way that music is licensed — moving towards a more competitive alternative. In this paper we review the economic tradeoffs that have provided the primary justifications for the current blanket licensing systems, and then describe the institutions and regulatory environment that have developed to implement those systems in the U.S. That sets the stage to describe an alternative competitive marketplace taking advantage of streaming technology and data, which we do in our companion paper, Ebin and Reitman (forthcoming). Such a marketplace, if implemented appropriately, would allow for individual rightsholders to set their own prices subject to the forces of competition, while still maintaining many of the transactions costs efficiencies associated with blanket licensing.

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Copyright Licensing Under Asymmetric Information

Review of Economic Research on Copyright Issues, 11(2), 1-26, 2014

Inés Macho-Stadler and David Pérez-Castrillo

Downloads:  49


In this paper we aim to contribute to the discussion on the role of royalties in copyright agreements by concentrating on the incentives that they provide to the creator and the intermediary when the success of the work depends on their involvement with the commercialization process. We also consider the effect of this moral hazard on the matching among creators and intermediaries and their gains.

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