CONCLUSION AND AVENUES FOR FURTHER RESEARCH

Copyright law establishes an important trade-off between the incentives for creators and creative industries, on the one hand, and the potential new access restrictions on the other.

The discussion revealed that the additional economic work required and the statistical challenges to be overcome are formidable. Economists and policy-makers have a long journey ahead of them. The absence of data; the complex financial and legal linkages between composers, creators, performers, editors, and other sectors of the creative indus­tries; new online intermediaries; and the way revenues are generated and split complicate the matter. That the various content sectors operate differently complicates the situation and questions the validity and comparability of results across sectors.

To conclude on a positive note, however, economists and policy-makers have become more focused on these shortcomings and are now actively working on overcoming them.

NOTES

* The authors would like to thank Arno Hold (World Trade Institute, University of Bern) for provid­ing help with background research on an earlier version of this chapter, and Paolo Lanteri (Culture and Creative Industries Sector, World Intellectual Property Organization, WIPO) for invaluable legal assistance throughout the drafting process. Comments on earlier drafts from Dimiter Gantchev (WIPO), Hannu Wager (Intellectual Property Division of the World Trade Organization), Prof. Martin Kretschmer (CREATe - RCUK Centre for Copyright & New Business Models, University of Glasgow), Stephen A. Merrill (Science, Technology, and Economic Policy, The National Academies), and Verena Weber (Directorate for Science, Technology and Innovation, OECD) are gratefully acknowledged. All remaining errors are the responsibility of the author. The views expressed are personal and do not neces­sarily reflect those of WIPO or its member states.

1. I am grateful to my colleague Paolo Lanteri (WIPO) for this important point.

2. This point greatly depends on the circumstances in question. For instance, CMOs often have the obliga­tion of non-discriminatory practice, that is, nobody can be prevented from using particular content; indeed, no direct authorization from the rights holder is required.

3. See European Commission (2012) and ‘Management of copyright and related rights’, accessed 25 July 2015 at http://ec.europa.eu/internal_market/copyright/management/index_en.htm for a detailed explana­tion of the problems in clearing rights for the online environment.

4. Many online video platforms make content available in one or two jurisdictions only, in particular in the United States; the same content is often not accessible from a European or Asian country. For instance, Pandora is available in the USA, but not in Europe. The European music streaming service Spotify, in turn, took years to be able to launch its service in the USA.

5. A deadweight loss is a cost to society in terms of welfare without an offsetting gain to anybody.

6. Article 5(2) of the Berne Convention provides for formality-free protection of creative works. That said, some countries can oblige or give preference to national creators who register their copyright works. See the discussion in section 11.4.

7. From an economist’s perspective, there are several alternatives to a copyright: one strand of literature argues that in the absence of a copyright system, markets would simply adapt and resort to alternative business models, such as first-mover advantages (Boldrin and Levine, 2002), the joint sale of comple­ments, creating product lines (what Varian, 2005 called ‘versioning’), price discrimination among different groups of customers (Liebowitz, 1985) or network effects (i.e., where the benefits of a good increase when more consumers use it). Another strand of literature prefers alternative statutory interventions such as charging levies on copying technologies to award prices, stipends or direct subsidies to creators. However, all these alternatives have the disadvantage of relying at least partly on central control, whereas in a copy­right system, the decision-making is decentralized and based on market mechanisms.

8. Section three of Wager’s article discusses the balance between original creators and follow-on creators.

9. See OECD (2005) for a breakdown of costs in the music sector.

10. For example, digitization, digital rights management, hosting of content, content aggregation and distribution.

11. Often particular content is now tied to particular platforms or devices (i.e., a new form of vertical integra­tion with games tied to certain consoles, music tied to certain online platforms and/or MP3 players, online news content tied to certain tablets, user-created content tied to certain sharing platforms, and so forth), and in the face of lacking (commercial) interoperability and ‘lock-in’ third parties or new entrants cannot compete.

12. Information released at the Apple Media Event on 22 October 2013.

13. As my colleague Hannu Wager points out, with respect to music this is the return to the past where - before the invention of ‘long play’ vinyl records - songs were purchased individually.

14. ‘As music streaming grows, royalties slow to a trickle showing that streaming services generate hardly any income for musicians’, New York Times, 28 January 2013.

15. See the discussion on the Global INET 2012 ‘Digital Content, Intellectual Property and Innovation’ expert panel session, 24 April 2012, accessed 25 July 2015 at http://www.elon.edu/e-web/predictions/ isoc_20th_2012/intellectual_property_innovation.xhtml.

16. Further excellent reviews are Png (2006), Watt (2000, 2004), Waldfogel (2011) and Kretschmer and Towse (2013). The Review of Economic Research on Copyright Issues, the Society for Economic Research on Copyright Issues (SERCI) and the International Association of Cultural Economics have all devoted much effort in recent years to improving the economic literature in the field.

17. There has been uneven industry coverage, with a great deal of attention to music, moderate attention to scientific publishing and film, and much less attention to news and book publishing and software.

18. A similar exercise has recently been conducted in the US context. See Merrill and Raduchel (2013).

19. Article 5(2) of the Berne Convention provides for formality-free protection of creative works.

20. See WIPO (2011).

21. The UNESCO Institute for Statistics has, in recent years, aimed to improve cultural and related statistics, notably by developing a ‘Framework for Cultural Statistics’ in 2009. The different sectors treated are: Cultural and Natural Heritage; Performance and Celebration; Visual Arts and Crafts; Books and Press; Audio-Visual and Interactive Media; and Design and Creative Services. Clearly, these statistics relate to cultural outputs such as films. While coverage is improving, little data are available for recent years for a broad set of countries. This situation will surely improve through new surveys and activities of the UNESCO Institute for Statistics (on cinemas, library statistics, and broadcasts); see Deloumeaux (2013) and Wunsch-Vincent (2011).

22. See, for instance, the IFPI’s ‘Recording Industry in Numbers 2013’ and its ‘Digital Music Reports’, and other statistics accessed 25 July 2015 at http://www.ifpi.com/content/section_statistics/index.html.

23. From the WIPO Project on Measuring the Economic Contribution of the Copyright-Based Industries and Relevant National Projects.

24. See again OECD (2005), which was based on painstaking attempts to get access to various artists’ con­tracts to conduct a meaningful quantitative analysis.

25. Encouragingly, a few credible papers are now emerging that assess the linkage between copyright and the price of creative works. Yet the one that comes to mind relates to the eighteenth century rather than the twenty-first, and is hard to transpose to the contemporary context.

26. See, for instance, the Hargreaves Review (2011). See also the last chapter in Merrill and Raduchel (2013), which sets out research priorities and data needs.

27. See, for example, the recent inauguration of the RCUK Centre for Copyright and New Business Models in the Creative Economy (CREATe) at the University of Edinburgh, accessed 25 July 2015 at http://www. create.ac.uk/. See also the continued empirical work of the OECD on the matter, accessed 25 July 2015 at www.oecd.org/sti/digitalcontent and the studies commissioned by the European Commission as well as the work of its Joint Research Centres on the matter, for instance on the dynamics of media and content industries, accessed 25 July 2015 at http://is.jrc.ec.europa.eu/pages/ISG/MCI/conference.html. The WIPO studies on copyright in the context of the Committee for IP and Development also make important contributions.

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12.