Monopoly and Competition in the Collective Administration of Public Performance Rights (in Hebrew)

Abstract

In most countries the right to perform music in public is not administered individually by the copyright holders but collectively by Performing Rights Organizations (PROs). The common explanation for the proliferation of collective administration is that some aspects of copyright administrations are natural monopolies. It is often argued that individual administration is impracticable or at least uneconomical. Collective administration is therefore promoted as the most efficient method for licensing, monitoring and enforcing those rights. In addition, since the market is a natural monopoly, regulation, rather than an attempt to foster competition, is thought to be the optimal regulatory response. This article critically analyzes the various justifications for collective administration. It argues that the case for PROs is not as straight forward as it is assumed to be, and shows that many of the underlying cost efficiencies that are attributed to PROs are usually simply assumed, and in many cases could be equally achieved under less restrictive arrangements. The article also shows that the existence of new technologies - the Internet, Digital Rights Management Technologies, and advanced monitoring technologies - undermines the case for collective administration even further. Also examined are two models for the regulation of PROs that have been recently proposed in Israel, an antitrust model and a specific legislation model. The models are examined from the aspects of their ability to restrain PROs' market power and to facilitate transition from monopoly to competition.

Note: Downloadable document is in Hebrew.