Belleflamme and Peitz (2010)

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Advertising Architectural Publishing of books, periodicals and other publishing Programming and broadcasting Computer programming Computer consultancy Creative, arts and entertainment Cultural education

Film and motion pictures Sound recording and music publishing Photographic activities PR and communication Software publishing (including video games) Specialised design Television programmes Translation and interpretation

1. Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare 2. Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)? 3. Harmony of interest assumption between authors and publishers (creators and producers/investors) 4. Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption) 5. Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)

A. Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right) B. Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction) C. Mass digitisation/orphan works (non-use; extended collective licensing) D. Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability) E. Fair remuneration (levies; copyright contracts) F. Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Source Details

Belleflamme and Peitz (2010)
Title: Digital piracy: Theory
Author(s): Belleflamme, P., Peitz, M.
Year: 2010
Citation: Belleflamme, P., & Peitz, M. (2010). Digital piracy: Theory. CESifo Working Paper Series No. 3222. Available at SSRN 1698618.
Link(s): Definitive , Open Access
Key Related Studies:
Discipline:
Linked by: Aguiar and Martens (2013), Belleflamme, Omrani and Peitz (2015)
About the Data
Data Description: This study uses a literature review
Data Type: Primary data
Secondary Data Sources:
Data Collection Methods:
Data Analysis Methods:
Industry(ies):
Country(ies):
Cross Country Study?: No
Comparative Study?: No
Literature review?: Yes
Government or policy study?: No
Time Period(s) of Collection:
  • Not stated
Funder(s):
  • Not stated

Abstract

This article reviews recent theoretical contributions on digital piracy. It starts by elaborating on the reasons for intellectual property protection, by reporting a few facts about copyright protection, and by examining reasons to become a digital pirate. Next, it provides an exploration of the consequences of digital piracy, using a base model and several extensions (with consumer sampling, network effects, and indirect appropriation). A closer look at market-structure implications of end-user piracy is then taken. After a brief review of commercial piracy, additional legal and private responses to end-user piracy are considered. Finally, a quick look at emerging new business models is taken.

Main Results of the Study

  • This article extensively reviews the theoretical literature on piracy of information products. This literature, which started in the mid-1980s, really mushroomed at the turn of the 21st century when digital piracy became a topic of intense debate.
  • Initially, in terms of welfare, it was considered that piracy was likely to improve welfare in the short run (as the deadweight loss of monopoly is reduced) but to deteriorate it in the long run (as lower profits imply lower incentives to create and to improve products). These conclusions were established in a number of seminal papers considering a simple monopoly framework.
  • Subsequent analyses extended this basic approach in several directions. First, it was suggested that piracy also had the potential to increase the right-holders’ profits. A second line of extension was to examine the effects of piracy in environments where several digital products compete with one another. Finally, other contributions consider other responses to piracy than actions through prices, namely legal actions, technical measures and copyright levies.

Policy Implications as Stated By Author

Given the importance of digital media industries, the interest in emerging business models is deemed to grow, so the present survey may have to be significantly complemented in a few years from now.

Coverage of Study

Coverage of Fundamental Issues
Issue Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
Green-tick.png
Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)?
Harmony of interest assumption between authors and publishers (creators and producers/investors)
Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption)
Green-tick.png
Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)
Green-tick.png
Coverage of Evidence Based Policies
Issue Included within Study
Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right)
Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction)
Mass digitisation/orphan works (non-use; extended collective licensing)
Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability)
Green-tick.png
Fair remuneration (levies; copyright contracts)
Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)
Green-tick.png

Datasets

Sample size: 1
Level of aggregation: Case study
Period of material under study: 1985 to 2009