Towse (1999)

From Copyright EVIDENCE

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

Towse (1999)
Title: Copyright and Economic Incentives: An Application to Performers' Rights in the Music Industry
Author(s): Towse, R.
Year: 1999
Citation: Towse, R. (1999). Copyright and economic incentives: an application to performers’ rights in the music industry. Kyklos, 52(3), 369-390.
Link(s): Definitive , Open Access
Key Related Studies:
Discipline:
Linked by: Watt (2009)
About the Data
Data Description: The primary source data in this paper was obtained by the author from three European performers' rights bodies: Musicians Union (UK), GRAMIX (Denmark) and SAMI (Sweden). The UK data refer to financial distributions made to music performers for 6 years from 1989-1995. The Danish sample reports 1995. The Swedish sample reports 1994. Each sample is divided into earning bands to show the distribution of income among each society's membership.
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?: Yes
Literature review?: No
Government or policy study?: No
Time Period(s) of Collection:
  • 1989-1995
Funder(s):
  • ESRC (Media Economics & Media Culture Programme) L 12625 101 1

Abstract

This paper contributes to the economic analysis of copyright in three ways: first, it draws a distinctiod between the general purpose of copyright law and the administration of the royalty system of payment for the use of copyrighted material; this leads to the principal-agent analysis of modes of payment. Secondly, this approach is applied to a specific topic, the change in copyright law in the form of the introduction of a new property right for performers in the UK that has come about as a result of the harmonisation programme of the European Union. Finally, new data were collected to assess the likely impact this change in law would have on performers' earnings using the music industry as a case study. This is novel because there has been no previous attempt to apply empirical evidence to the analysis of copyright law. The paper therefore provides a framework for evaluating changes to copyright law.

Main Results of the Study

The Main results of this study are:

  • There is an economic logic to the royalty system of payment for the use of copyright.
  • By adopting a principal-agent model of incentives to author and publisher, the trade-off between risk-bearing over the life of the copyrighted work, the amount of effort at marketing and maintaining the reputation of the work and the transaction costs inherent in the different payment methods is exposed.
  • The drafters of the Rental Directive attempted to counteract market forces by making some performers’ rights unwaivable. It seems unlikely that they took account of the economic arguments for and against buy-outs in so doing.

Policy Implications as Stated By Author

"Property rights must clearly be defined and enforceable for markets to work...How much is earned is, however, a market outcome and the division of revenues is governed by complex interaction of economic incentives and administrative arrangements. Any attempt to regulate these outcomes must take account of the underlying economic logic of the organisation of the industries concerned and recognise that regulation may impose costs, not only on those directly involved, but also on society at large."

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)
Green-tick.png
Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption)
Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)
Coverage of Evidence Based Policies
Issue Included within Study
Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right)
Green-tick.png
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)
Fair remuneration (levies; copyright contracts)
Green-tick.png
Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Datasets

Sample size: 3
Level of aggregation: Collecting Socieities
Period of material under study: 1989-1995