CONCLUSION

The cultural sector exhibits market characteristics that are typical for all types of infor­mation goods and services, and much of it is immediately affected by the diffusion of Internet-based services.

That being said, cultural economics is only beginning to directly engage with the Internet and the implications for the cultural sector. There is an urgent need for robust insights regarding the impact on various parts of the cultural sector of miniscule and non-increasing marginal costs of reproducing and disseminating works, new forms of user-producer and user-user interaction, customization, personalization and user innovation, media convergence, and the rise of highly concentrated suppliers of general purpose, Internet-based services, such as search engines, social media sites and online retailers.

Cultural economics has an important contribution to make to understanding the wider implications of the economic changes brought by the Internet for cultural welfare and the welfare of those who create it.

NOTES

* The final version of this chapter was submitted to the editors in August 2013, which is reflected in the selec­tion of examples and the literature. The chapter identifies fundamental topics of cultural economics and how they relate to research on digitization and the Internet, which are as current as ever.

1. By ‘cultural economics’ we mean in particular publications in the category Z11 (Economics of the Arts and Literature) according to the Journal of Economic Literature (JEL) classification system. This body of literature has developed over the last 50 years. Much of the related research has been presented at the biennial conferences of the Association of Cultural Economics International (www.culturaleconomics.org), and many articles are published in the Journal of Cultural Economics, as well as a number of authored and edited books.

2. For recent surveys of the economics of copyright see Towse et al. (2008) or Handke (2010, 2012). On the impact of the Internet on mass media and creative industries, see Picard et al. (2008).

3. Essentially, impact studies are empirical cost-benefit analyses. They fall relatively comfortably within the scope of the neoclassical welfare model, as applied in fields like environmental economics and the econom­ics of health and education.

4. Cultural economics has tended to stick with the superstar moniker; ‘winner-take-all’ is a similar concept applied to a wider range of market situations, though without the analysis of the role played by differences in talent.

5. Cultural products tend to be non-rival in consumption - the consumption by one party does not diminish the value of the same work by others. If there are no problems with excessive use (congestion), network effects will usually be positive.

6. Pay TV subscriptions for selected - often exclusive - audiovisual content have been marketed for a long time.

7. LoveFilm exited the rental business in 2009 and was acquired in 2011 by Amazon. Netflix is also a major, authorized supplier of on-demand video subscriptions in the USA, and has started operating in several countries.

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