Cameron and Bazelon (2013)

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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

Cameron and Bazelon (2013)
Title: The impact of digitization on business models in copyright driven industries: a review of economic issues
Author(s): Cameron, L, Bazelon, C
Year: 2013
Citation: Cameron, L., & Bazelon, C. (2013). The impact of digitization on business models in copyright driven industries: a review of economic issues. Brattle Groupe paper prepared for the US National Research Council, available at: http://sites.nationalacademies.org/cs/groups/pgasite/documents/webpage/pga_063398.pdf.
Link(s): Definitive , Open Access
Key Related Studies:
Discipline:
Linked by:
About the Data
Data Description: The paper analyses three industries and assesses 12 business models suitable for the age of digitisation and internet distribution (6 for music, 3 for movies, 3 for books).
Data Type: Primary and Secondary 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:
  • None stated
Funder(s):
  • National Research Council (NRC) Committee on the Impact of Copyright Policy on Innovation in the Digital Era

Abstract

Copyright law can theoretically create property rights but whether digitization and the internet have eliminated the ability of producers to receive adequate compensation for their work under the current system of rights is now a fundamental social and economic question. This paper addresses that question by providing an economic summary of how the markets for music, film and books have changed. Our paper focuses on three industries, music, film and books, where the industry structure evolved under a long-term regime of robust copyright protection. In each industry, we first discuss the stages of the traditional supply chain. Second, we discuss the effects of digitization on that traditional supply chain, focusing on how digitization has radically reduced distribution costs, while simultaneously increasing the potential for piracy of content. Third, we provide a brief history of how new business models for the distribution of content in each industry have fared thus far. Finally, we consider how the intermediaries and the artists are likely to fare under the new regime.

Main Results of the Study

  • In all three of these industries, digitization and the internet have led to a precipitous decline in distribution costs, as well as an enormous increase in piracy that has likely diminished the economic rewards afforded by copyright.
  • By establishing legal rights to the intellectual content of these works, copyright solves the market failures associated with these public goods. However, this approach works only if producers are able to capture adequate compensation to produce at the socially desirable level.
  • If a copyright scheme fails to create enforceable ownership rights, producers of intellectual works will not receive adequate compensation for their initial investment and will therefore face reduced production incentives. This is the situation that digital distribution threatens to create.
  • Unless addressed through novel business models, the resultant market failure could require legal innovation (perhaps in the form of compulsory blanket licenses) to ensure that producers have adequate incentive to create original works.
  • Each of the three main functions of record companies—finding talent, recording music, and promoting/distributing songs—has been affected by digitization and internet distribution.
  • Digitization has had its greatest impact in the post-theatrical release segment of the film industry, which has been dominated by physical DVDs for the past 8 to 10 years. Online distribution of digitized movies has been possible since 1997. Nevertheless, revenues from online distribution have been relatively modest for the past five years due to both low sales volumes and relatively lower prices for online content.
  • Online distribution is becoming increasingly important to the industry at the same time that TVs are increasingly integrated with internet connectivity.

Policy Implications as Stated By Author

The authors conclude with a series of research questions that might be pursued to obtain a better understanding of how these different industries will evolve over time. Here some of them:

  • Will traditional record companies be able to prosper as content-providers rather than distributors?
  • What legal solutions to copyright infringement can the music industry afford to pursue?
  • Will traditional film studios be able to remain profitable as their power over the distribution function declines?
  • What DRM solutions are available? Which DRMs are most user-friendly?
  • To what extent will consumers view e-books as a substitute for traditional books?
  • Will consumers continue to demand traditional books, say, through Amazon or bookstores?

Coverage of Study

Coverage of Fundamental Issues
Issue Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)?
Green-tick.png
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)
Green-tick.png
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: 3
Level of aggregation: Industry
Period of material under study: None stated


Sample size: 12
Level of aggregation: Business model
Period of material under study: None stated