| Handke, Girard and Mattes (2015)
|| Copyright and Innovation: Fit for Digitization?
|| Handke, C., Girard, Y., Mattes, A.
|| Handke, C., Girard, Y., & Mattes, A. (2015). Copyright and Innovation: Fit for Digitization?. DIW Economic Bulletin, 5(16).
|| Definitive , Open Access
|Key Related Studies:
It is contentious to what extent the existing copyright system contributes to the positive development of the regulated sectors of society. The present report shows that substantially more musical works and movies have been released in recent years than before the diffusion of digital copying technology. At the same time, the average quality of these works has been stable according to user assessments. Countries with stronger copyright protection do not exhibit greater supply of new works. Accordingly, the relatively strict copyright protection in some countries does not seem to promote the supply of new creative works. The present report also considers whether user-generated content (UGC) complements or substitutes professional content. An increasing supply of valuable UGC is not reflected in official economic statistics. In all probability, copyright protection promotes user-generated content less than professional content. As a result, substituting professional content with "amateur material" could reduce the socially desirable strength of copyright protection. However, we find that almost half of all works available on YouTube are professional content. Professional works are watched and recommended more frequently than the average. In addition, a large proportion of UGC on YouTube draws on professional works. There is little evidence that professional content would be widely replaced. It follows that UGC could also be supported by an efficient copyright system, which strengthens the supply of professional content without excessively limiting its further use as input for UGC.
Main Results of the Study
- Overall, sales between 2001 and 2012 fell by more than 20 percent. According to the IMDb database, the number of new film releases has risen relatively steadily since 2001. At the same time, the average rating of movies released in the relevant year has remained constant
- Revenue from the sale of authorized copies of recorded music to consumers has fallen by more than 50 percent since the early 2000s. In contrast, the supply of new creative works increased almost continuously over the observation period. Average user rating of music recordings from the individual years has remained virtually unchanged throughout the same period. This descriptive analysis indicates no direct negative association between revenues of copyright holders’ and the supply and quality of new works.
- Professional content is the largest group with a share of 46 percent. UGC has a share of 33 percent. On average, professional content was accessed over four times more than UGC. In contrast, the average number of “likes” for professional content and for UGC is similarly high, so the ratio of “likes” to views is greater for UGC. This is perhaps not only due to the quality of the videos but also due to greater motivation to leave positive feedback for amateurs than for professionals. Overall, professional content makes up a considerable share of YouTube material. It would be an exaggeration to claim that professional content is largely being replaced. In addition, a substantial minority of UGC in the broader sense, including the mixed forms, builds directly on the repertoire of commercial works. In the long run, this part of UGC probably depends on an ample supply of new, valuable professional works. UGC is not yet associated with a reduction in supply of professional material. The growing dissemination and consumption of UGC demonstrates that these types of works are of considerable value, adding to professional content.
Policy Implications as Stated By Author
- Considering the supply of new creative works, it is clear that the development of music and film in recent years has been more positive than the heated debates on the dangers of digital copying would have us believe. Based on the available data, digital copying does appear to have had a negative effect on innovation in terms of content creation. However, a high degree of uncertainty remains. First, data restrictions do not allow us to draw very firm conclusions. Second, it is difficult to distinguish the impact of copyright from the impact of broader technological change with digitization.
- The findings presented here show that commonly voiced assumptions have no solid basis. There is no solid evidence that the diffusion of digital copying technology fundamentally would have damaged the supply of new works. Neither does it appear that UGC will replace professional content, which would call into question the conventional economic justification for copyright.
- Further empirical work is needed to strengthen the evidencebase for copyright policy. The further development of online databases will facilitate research in the foreseeable future. The next important steps include studying specific aspects of the copyright system, such as: (1) the duration of copyright protection; (2) regulations regarding private copying and notices according to civil law; (3) the reasonable level of public investment in law enforcement; (4) the regulation of collecting societies such as the German Society for Musical Performing and Mechanical Reproduction Rights (GEMA); (5) determining reasonable compensation for different forms of distribution; and (6) competition policy with the emergence of highly concentrated online platforms through which creative works are disseminated.
Coverage of Study
| Sample size:
| Level of aggregation:
| Period of material under study: