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Economics and copyright reform: Aspects of the EC Directive

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Abstract

Economists are frequently involved in quantitative research (ex ante and ex post) on policy changes and it should be possible to apply this competence to copyright reform. However, aspects of the EU Directive, such as technological protection measures and digital rights management, present severe challenges to empirical economic evaluation.

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... A number of commentators have argued that there is no economic justification for a further strengthening of copyrights, as there is only cursory evidence that stronger and longer copyright protection increases the provision of creative work. In addition, there is even less evidence available to assess possible welfare effects thereof (Towse, 2005). 2 f) Some industries are characterized by a specificity of technological development. ...
... While it is common knowledge that strong property rights for rival goods are conducive to economic growth, for non-rival goods such as ideas, the economic rationale is less clear. For non-rival goods, property rights involve the trade-off between incentives (appropriability) and monopoly distortions (Landes and Posner 1989, Romer 2002, Scotchmer 2004, Towse 2005. There is some controversy about the question whether intellectual property rights work primarily as incentive mechanism or whether they can also constitute barriers to entry and being counterproductive for innovation. ...
... In fact the evidence by Hui and Png (2002) suggests that the copyright reform seems to have "been a giveaway to owners of existing creative work, while having relatively little impact on new creative activity" (Hui and Png, 2002, p. 219). Towse (2005) provides a critical discussion of the extension of copyright protection for the creative industries and concludes that the unintended consequences of extending and strengthening copyright protection are not taken in consideration. One consequence is to increase the value of existing copyright assets which increases entry barriers into creative work, e.g. if creative work is cumulative or rights are held in monopolistic industries. ...
... The public will choose to abandon licensing negotiations or even ignore the issue of licensing and using the work (Ahluwalia et al., 2020). From the perspective of transaction cost economics, the issue of short video copyright infringement can essentially be seen as a market failure based on high transaction costs (Towse, 2005). ...
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In recent years, copyright governance for short videos has become a hot issue of common concern in the academic community and the industry. Therefore, this study intends to explore the economic aspect of copyright governance in relation to the proliferation of infringing short videos. The short video industry of China has been taken as a case to demonstrate the copyright governance issue. Transaction cost theory has been applied to analyze the economic aspect of copyright governance in terms of four dimensions: bounded rationality, opportunism, environmental uncertainty, and asset specificity. From the perspective of transaction cost economics, the problem of short video infringement is observed to be essentially a market failure due to high transaction costs. In the short video market, substantial transaction costs are incurred in the legal transaction of copyright with these costs considered to be too high. This is especially the case when transaction costs exceed the net proceeds initially expected by short video users from the authorization, making it impossible to carry out the transaction and leading to infringement. To effectively control the copyright infringement of short videos, it is necessary to build a cross-platform information-sharing mechanism to reduce search costs, establish a unified copyright management platform to reduce coordination costs, and give full attention to the role of technical support to reduce regulatory costs.
... Changes to copyright law have not been helpful to performers (Taylor and Towse (1998)), though the recent changes made to deal with online activity were supposed to favour them. The so-called Internet Treaties established by the World Intellectual Property Organisation (WIPO) the WIPO Copyright Treaty (WCT) and the WIPO Performers and Phonograms Treaty (WPPT), which have been adopted throughout Europe and elsewhere, mandated the so-called 'making available' right for authors and performers respectively, which relates to any use for which the consumer can choose the time of access as with streamed music (Towse, 2005). Apart from the issue whether publishing and performers' contracts explicitly include this right, there is disquiet regarding its efficacy. ...
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The intervention of digital service providers (DSPs) or platforms, such as Spotify Apple Music and Tidal, that supply streamed music has fundamentally altered the operation of copyright management organisations (CMOs) and the way song-writers and recording artists are paid. Platform economics has emerged from the economic analysis of two- and multi-sided markets, offering new insights into the way business is conducted in the digital sphere and is applied here to music streaming services. The business model for music streaming differs from previous arrangements by which the royalty paid to song-writers and performers was a percentage of sales. In the case of streamed music, payment is based on revenues from both subscriptions and ad-based free services. The DSP agrees a rate per stream with the various rights holders that varies according to the deal made with each of the major record labels, with CMOs, with representatives of independent labels and with unsigned artists and song-writers with consequences for artists’ earnings. The article discusses these various strands with a view to understanding royalty payments for streamed music in terms of platform economics, offering some data and information from the Norwegian music industry to give empirical support to the analysis.
... In the USA, companies have been granted a 95 year term, the 'Sonny Bono' extension to copyright law that kept Mickey Mouse from going into the public domain. 6 WIPO (2003),Towse (2005) 7 Space does not permit further discussion of these important topics. SeeFrey (2000),Towse (2001b) andTowse (2004) ...
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The paper considers recent policy changes to the copyright law and its management, particularly digital rights management, and asks how they can be evaluated. Copyright law is perhaps the most important policy tool affecting the cultural industries and it provides the regulatory environment in which all enterprises in the music, film, book publishing, broadcasting and other media industries function. Digitalisation is now affecting all art forms and the management of rights is becoming an issue for arts managers as well. In Europe, the European Commission is seeking to increase competition into rights management but it is argued this may lead to restriction of cultural diversity and other cultural policy aims.
... • create a new exclusive right in favour of copyright owners, including sound recording producers and performers, to make their works available on-line to the public (known as the making available right); 7 WIPO (2003), Towse (2003b) • prohibit the circumvention of copyright protection (TPMs -technological protection measures); and, ...
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The paper surveys the economic literature on copyright law, relating it to artists' labour markets and considers its intended and unintended effects in the cultural industries, where copyright has an important impact on the relation between creative and performing artists and the firms who produce and distribute cultural content. The paper considers by way of example recent changes to performers' rights and how to assess their effect on artists' labour markets. The conclusion is that cultural economics has an insight into these questions that other approaches do not fully address.
... A historical analysis of over 1,000 years land enclosure and commons property reveals that the right to be included in the benefit stream has recently moved to the background and hurts innovation (Ford Runge and Defrancesco 2006). An economic analysis reveals that EU legislation contains three assumptions which are not thta valid anymore (Towse 2005). These assumptions are that there is no clash between content publisher interest and author interest, that only publishers are capable of entrepreneurship, and that firms innovate instead of creators. ...
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This study traces the evolution of commons-based peer production by a measurement-based analysis of case studies and discusses the impact of peer production on net neutrality and copyright law. The measurements include websites such as suprnova.org, youtube.com, and facebook.com, and the Peer-to-Peer (P2P) systems Kazaa, Bittorrent, and Tribler. The measurements show the two sides of peer production, the pirate side with free availability of Hollywood movies on these P2P systems and the Samaritan side exhibited by the quick joining of 400,000+ people in a community to organize protests against events in Burma. The telecommunications and content industry are disrupted by this way of peer production. As a consequence, revenues of both industries are likely to suffer in the coming years. On the other hand, innovative P2P systems could win the battle on merit over classical distribution technologies. As a result, a continuation is expected of both legal actions against P2P and possible blocking actions of P2P traffic, violating net neutrality. It is argued that this hinders innovation and causes a large discrepancy between legal and user perspectives. A reform of copyright laws is clearly needed, otherwise they will be unenforceable around 2010.
... lack of standards) but to other factors as well. For example, a social factor is that users are not satisfied with existing, strict usage rights policy of current DRM solutions [4,5]. The lack of relevant legislation, which is not matured in many countries, and usability are also drawbacks for DRM's wider adoption [6]. ...
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Digital Rights Management (DRM) systems’ interoperability is becoming one of the main obstacles for their wider adoption, especially from medium and small size users. Interoperability issues affect, among others, the management of content usage rules by third parties (authorities) and the automation of licensing procedures upon the purchase of digital content. The fundamental question of who is handling content licenses in the national or global DRM value chain is complex, with business, social and technological extensions. In this paper, we discuss current trends in DRM systems technology and business modelling and briefly present a proposal for handling digital content licensing, Distributed License Catalogues (DLCs). The DLC concept, borrowed from web engineering, makes available (“advertises”) content or services concerning DRM functionalities, enabling multi-party DRM eco-systems.
... 219). There is even less evidence to assess possible welfare effects (Romer, 2002, Towse, 2005. ...
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I. Introduction Since the turn of the century, legislation in Western countries has expanded rapidly to reverse the brief dominance of laissez faire during the nineteenth century. The state no longer merely protects against violations of person and property through murder, rape, or burglary but also restricts "dis­ crimination" against certain minorities, collusive business arrangements, "jaywalking," travel, the materials used in construction, and thousands of other activities. The activities restricted not only are numerous but also range widely, affecting persons in very different pursuits and of diverse social backgrounds, education levels, ages, races, etc. Moreover, the likeli­ hood that an offender will be discovered and convicted and the nature and extent of punishments differ greatly from person to person and activity to activity. Yet, in spite of such diversity, some common properties are shared by practically all legislation, and these properties form the subject matter of this essay. In the first place, obedience to law is not taken for granted, and public and private resources are generally spent in order both to prevent offenses and to apprehend offenders. In the second place, conviction is not generally considered sufficient punishment in itself; additional and sometimes severe punishments are meted out to those convicted. What determines the amount and type of resources and punishments used to enforce a piece of legislation? In particular, why does enforcement differ so greatly among different kinds of legislation?
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In this paper we investigate the dynamics of chartsuccess in the U.K. pre-recorded popular music industryover the period 1980 to 1993 using the British albumchart listings. We find that the incidence of chartsuccess is substantially skewed to the right, whethermeasured by total weeks spent per artist, averageweeks spent per album, or the total number of albumslisted per artist. We subsequently investigatepossible determinants of the length of chart survivalof albums in order to determine what may be drivingthe observed skewness. Our results indicate that thetype of album, seasonal demand, and initial popularityplay an important role in ensuring continued chartlisting of an album. Copyright Kluwer Academic Publishers 2000
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Digital rights’ management systems; regulatory problems and market developments. Paper Given at the COST A20 Conference ‘Towards New Paradigms
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The Economic Importance of Copyright in the Netherlands
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Record sales’ woes go beyond file swapping
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