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Plain Destruction or Creative Destruction? Copyright Erosion and the Evolution of the Record Industry

23 Pages Posted: 13 Jun 2008  

Christian W. Handke

Erasmus University Rotterdam (EUR)

Abstract

The record industry has become emblematic in debates on reforming copyright law. Economists have mainly studied the extent to which a surge in unauthorised copying is destroying the industry by displacing demand for authorised copies. The effect of technological change on industry structure has received little attention. This paper presents evidence for an extraordinarily high number of market entries by small record companies during a severe recession in the German market for phonograms. This finding is more consistent with a restructuring of the record industry in the context of technological change - i.e. creative destruction - than with plain destruction due to diminished appropriability. If that is the case, isolated attempts to reinforce copyright protection could be misguided. They should be complemented by efforts to promote innovation within the record industry.

Keywords: Copyright Erosion, Record Industry

Suggested Citation

Handke, Christian W., Plain Destruction or Creative Destruction? Copyright Erosion and the Evolution of the Record Industry. Review of Economic Research on Copyright Issues, Vol. 3, No. 2, pp. 29-51, 2006. Available at SSRN: https://ssrn.com/abstract=1144318

Christian W. Handke (Contact Author)

Erasmus University Rotterdam (EUR)

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

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