15 Pages Posted: 16 Jun 2008
Digital technology makes sophisticated means available to the general public for copying works with an equal level of quality to the originals and at increasingly lower prices. Unrestricted copying deprives producers and creators of a share of their potential earnings on the sale of originals. The whole of the traditional system for financing cultural creation could be at risk. There are three mainstays to the conventional financing system: the production of private goods, direct appropriability of revenues, temporary monopoly of exclusive rights. Each one has been called into question by P2P. Content has properties that are growing ever more similar to public goods, raising the question of whether public financing might be possible. Direct appropriability in customary markets is becoming ever more difficult, raising the question of whether new forms of appropriability might be possible, both direct and indirect. Exclusive rights are becoming increasingly ever harder to enforce, raising the question of other possible institutional solutions. To date, the solutions geared to tackling these issues have been largely defensive, and aimed at maintaining the old system's core characteristics (direct appropriability and exclusive rights) through DRM. However, a brief foray into economics literature can reveal some original alternatives solutions even if each one has its advantages and its drawbacks.
Keywords: P2P, Piracy, Financing
Suggested Citation: Suggested Citation
Farchy, Joelle, P2P and Piracy: Challenging the Cultural Industries' Financing System. Review of Economic Research on Copyright Issues, Vol. 1, No. 2, pp. 55-69, 2004. Available at SSRN: https://ssrn.com/abstract=1145903