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Revenue Sharing as Compensation for Copyright Holders

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  • Richard Watt

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    Abstract

    In the vast majority of the literature on the economics of copyright royalties, it is assumed that the copyright holder is remunerated either by a fixed payment or by a payment that amounts to an additional marginal cost to the user, or both. However, in some significant instances in the real-world, copyright holders are constrained to a compensation scheme that involves revenue sharing. That is, the copyright holder takes as remuneration a part of the user’s revenue. In essence, the remuneration is set as a tax on the user’s revenue. This paper analyses such remuneration mechanisms, establishing and analysing the optimal tax rate, and also the Nash equilibrium tax rate that would emerge from a fair and unconstrained bargaining problem. The second option provids a rate that may be useful for regulatory authorities.

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    File URL: http://www.icer.it/docs/wp2010/ICERwp23-10.pdf
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    Bibliographic Info

    Paper provided by ICER - International Centre for Economic Research in its series ICER Working Papers with number 23-2010.

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    Length: 33 pages
    Date of creation: Oct 2010
    Date of revision:
    Handle: RePEc:icr:wpicer:23-2010

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