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Bargaining theory and the copyright royalty board’s rate setting decisions for interactive streaming of music

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  • Hughes, Elliott
  • Watt, Richard

Abstract

In the USA, the remuneration for songwriters whose copyrighted material is broadcast using online interactive music services is subject to a compulsory license with a rate that is regulated by the Copyright Royalty Board. On the other hand, an essentially equally necessary input to the interactive music services, namely the sound recording copyright, is freely negotiated between the parties. This sets up an interesting bargaining problem that is of interest to the regulator. The present paper sets out this problem formally, and resolves the equilibrium outcomes. The model is calibrated with the actual rates that have been set recently.

Suggested Citation

  • Hughes, Elliott & Watt, Richard, 2025. "Bargaining theory and the copyright royalty board’s rate setting decisions for interactive streaming of music," Mathematical Social Sciences, Elsevier, vol. 134(C), pages 58-65.
    • Handle: RePEc:eee:matsoc:v:134:y:2025:i:c:p:58-65
    DOI: 10.1016/j.mathsocsci.2025.01.005
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    References listed on IDEAS

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    1. Saeed Alaei & Ali Makhdoumi & Azarakhsh Malekian & Saša Pekeč, 2022. "Revenue-Sharing Allocation Strategies for Two-Sided Media Platforms: Pro-Rata vs. User-Centric," Management Science, INFORMS, vol. 68(12), pages 8699-8721, December.
    2. Ken Binmore & Ariel Rubinstein & Asher Wolinsky, 1986. "The Nash Bargaining Solution in Economic Modelling," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 176-188, Summer.
    3. Schlicher, Loe & Dietzenbacher, Bas & Musegaas, Marieke, 2024. "Stable streaming platforms: a cooperative game approach," Omega, Elsevier, vol. 125(C).
    4. Arthur Snow & Richard Watt, 2005. "Risk sharing and the distribution of copyright collective income," Chapters, in: Lisa N. Takeyama & Wendy J. Gordon & Ruth Towse (ed.), Developments in the Economics of Copyright, chapter 2, Edward Elgar Publishing.
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