The Economics of Copyright Levies on Hardware
AbstractWe provide an economic analysis of the static and dynamic effects of copyright levies on hardware. Contrary to copyright levies on supports such as tapes, CDs or DVDs, whose main use is to copy, levies on hardware do not modify the propensity of consumers to use 'illegal' content. They decrease both levels of 'legal' and 'shared' contents, leading to a decrease in the revenues from legal sales for copyright holders. The levies could compensate for the decrease but this would require copyright holders to receive a large share of the levies. Hence from a static perspective, levies on hardware are likely to fail achieving their goal of increasing the financial flow to copyright holders. We also consider a dynamic version of the model where artists are differentiated by reputation and where reputation and sales covary (more reputation leads to higher sales and higher sales to more reputation). Then, even if high reputation artists benefit from higher levies, lower reputation artists are hurt. Finally, we show that when content providers have market power and can choose between offering content at a unit price or through a subscription service, incentives to implement subscription models are decreasing in the level of levies on hardware, despite the fact that subscription services may eliminate piracy.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers ECARES with number ECARES 2011-008.
Length: 24 p.
Date of creation: Mar 2011
Date of revision:
Publication status: Published by:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-09 (All new papers)
- NEP-COM-2011-04-09 (Industrial Competition)
- NEP-CUL-2011-04-09 (Cultural Economics)
- NEP-IND-2011-04-09 (Industrial Organization)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statistics
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Benoit Pauwels).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.