Joint Copyrights Management by Collecting Societies and Online Platforms: An Economic Analysis

Abstract

This paper discusses the effects of technological change on joint (copy)rights management (JRM). The economic literature discusses JRM as a response to relatively high transaction costs in complex markets for copyright works. Based on a formal analysis, we show that JRM reduces the average transaction costs per transaction and the total number of transactions under a broad range of conditions. Throughout the 20th Century, JRM was mostly conducted by copyrights holder collectives. Recently, private for-profit online platforms are taking on core functions of JRM. Our formal analysis yields two essential results: (1) the efficient scale and scope of JRM will increase as copyright works are increasingly traded via digital ICT networks; (2) a change from collective JRM on behalf of rights holders to commercial intermediation weakens the position of rights holders, and will aggravate problems with the private provision of copyright works with public good attributes.

Keywords: Collecting societies, copyright collectives, copyright, online intermediaries, digitization.

JEL Classification: D23, K23, L33, L82, L86, O33