Copyright, Art and Internet: Blessing the Curse?

The new technologies of digitalization and the Internet threaten the market positions of artists and intermediaries. Artists because the technology of production of works may be readily accessible and craftsmanship may no longer be a defining characteristic of art. Intermediaries because their rents are linked to entry barriers in the distribution market. This curse of new technologies may be a blessing in disguise since it also increases the possibilities of production, of distribution and the emergence of new works of art. The system of intellectual protection gives market power to artists and the economic literature has analyzed the tradeoff between the dynamic inefficiency generated by this market power and the need to preserve the incentives for creation. We review this literature and some of its recent applications to artistic, and more generally intellectual, creation. Even if artists can capture perfectly the market value of the future home production by consumers, they may favor a strong copyright regime that prevents consumers from using their home production. Intermediaries and artists may want to limit competition in order to increase the rents brought by the indivisibility of creative ideas. The preferences of artists for strong or weaker form (e.g., licensing of rights for home production) of copyright may be related to their creativity.