Forthcoming in Review of Law & Economics.


Copyright is typically justified by the rationale that profits induce authors and other artists to invest resources in cultural production. This rationale is vulnerable to the objection that some artists have intrinsic incentives to invest in cultural production and do not require significant capital to do so. Even accepting this objection, copyright is justified by an alternative rationale: it supports the profit-motivated intermediaries that bear the high costs and risks involved in evaluating, distributing and marketing content in mass-cultural markets. This “authorless” rationale is consistent with the intermediated structure of mature mass-cultural markets and accounts for long-standing features of copyright law that have conventionally been dismissed as mere transfers from consumers to media interests. The digital transformation of mass cultural markets, which has been accompanied in some media by a decline in production and distribution costs but no change or even an increase in screening and marketing costs, challenges and clarifies the intermediary-based rationale for copyright. Even in digitized content markets, copyright plays a critical role by enabling intermediaries to select freely from the full range of transactional structures for most efficiently bearing the costs and risks of screening, producing, distributing and marketing content to a mass audience.


Arts and Entertainment | Intellectual Property | Law | Law and Economics

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