Abstract

http://ssrn.com/abstract=1144246
 
 

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Transactions Costs and Administered Markets: License Contracts for Music Performance Rights


Michael A. Einhorn


Media, Technology, and Copyright


Review of Economic Research on Copyright Issues, Vol. 3, No. 1, pp. 61-74, 2006

Abstract:     
Performance rights organizations (PROs) provide transactional efficiency for music users and copyright owners by negotiating contracts, collecting revenue, and paying royalties for the rights to publicly perform musical compositions, thereby replacing their need to deal individually with one another in bilateral licensing. Historically, performance rights for catalogued works have been made available to users through blanket licenses, which convey the rights to perform, or have performed on licensed premises, all registered works in the corresponding catalog of registered works. While blanket licenses may enhance transactional efficiency, the same licenses are sometimes recognized as anticompetitive restrictions that compel each user to make an all or nothing choice that may force acceptance of a full license contract in place of a less inclusive alternative that may actually be preferred. Competitive concerns at the Antitrust Division of the U.S. Justice Department regarding blanket licensing at ASCAP and BMI led to a separate series of Consent Decrees for each of the two major PROs in the U.S.

To explore the disparate claims of economic efficiency, the paper finds that concepts from public utility regulation may be particularly helpful. Three characteristics are considered: where prices are subsidy-free, whether license provision is a natural monopoly, and whether any competitive submarkets can be structurally separated from the regulated core.

Number of Pages in PDF File: 14

Keywords: Transaction Costs, License Contracts, Music

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Date posted: June 13, 2008 ; Last revised: March 5, 2014

Suggested Citation

Einhorn, Michael A., Transactions Costs and Administered Markets: License Contracts for Music Performance Rights. Review of Economic Research on Copyright Issues, Vol. 3, No. 1, pp. 61-74, 2006. Available at SSRN: http://ssrn.com/abstract=1144246

Contact Information

Michael A. Einhorn (Contact Author)
Media, Technology, and Copyright ( email )
North Caldwell, NJ 07006
United States
973-618-1212 (Phone)
973-618-9904 (Fax)
HOME PAGE: http://www.mediatechcopy.com
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