Language, Copyright and Geographic Segmentation in the EU Digital Single Market for Music and Film

JRC/IPTS Digital Economy working paper 2015-04

50 Pages Posted: 9 May 2015

See all articles by Estrella Gomez-Herrera

Estrella Gomez-Herrera

Joint Research Center of the European Commission

Bertin Martens

Joint Research Centre

Date Written: May 6, 2015

Abstract

The EU seeks to create a seamless online Digital Single Market for media products such as digital music and film. The territoriality of the copyright regime is often perceived as an obstacle that induces geographical segmentation. This paper provides empirical evidence on the extent of market segmentation in the EU on the supply and demand side and measures the contribution of several drivers of this market segmentation. We use data from the Apple iTunes country stores in 27 EU Member States to measure geographical market segmentation in supply (availability), demand (sales) and prices across the EU for downloadable digital music and film. We find that availability of EU media products across country stores in the EU is hovering around 80% for music and 40% for films. Recent industry initiatives to reduce the transaction costs of making digital music available across borders have resulted in a reasonably wide availability though still short of the 100% mark. Consumer preference variables such as cultural proximity, a shared language or border and inherent preferences for home market products are the main drivers for the observed geographical market segmentation in demand patterns, both for music and film. Supply side factors including copyright-related trade costs probably still play a role in music though we can only infer this indirectly in the absence of data on copyright licensing arrangements at product level. Commercial strategies and territorial restrictions in distribution agreements reduce film availability, more so than copyright issues. We also find evidence of price differentiation across iTunes EU country stores.

Keywords: digital music, copyright, trade, EU digital single market

JEL Classification: D23

Suggested Citation

Gomez-Herrera, Estrella and Martens, Bertin, Language, Copyright and Geographic Segmentation in the EU Digital Single Market for Music and Film (May 6, 2015). JRC/IPTS Digital Economy working paper 2015-04, Available at SSRN: https://ssrn.com/abstract=2603144 or http://dx.doi.org/10.2139/ssrn.2603144

Estrella Gomez-Herrera

Joint Research Center of the European Commission ( email )

Via E. Fermi 2749
1049
Belgium

Bertin Martens (Contact Author)

Joint Research Centre ( email )

Edificio Expo, C
Inca Garcilaso, s/n
Sevilla, E-41092
Spain

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