Is it enough to give full compensation to the artists and copyright holders? Or, is it important to give a power to control how their works are used? This is one of the important questions to ask when you think about copyright policies.If compensation is good enough to stimulate creation, the law can take the step toward compulsory licensing system, where people can use copyrighted work without permission and pay back some royalties. This can be the system with very low transaction costs, because you can omit negotiations. Many scholars are proposing such systems. See Chapter 6 of Terry Fisher’s forthcoming book, “Promise To Keep” , for example. If compensation is not good enough, we have to ask why. A person from film industry that I interviewed a while ago told me the following: “Well, in that case, we loose all control. It means that first you place the contents, that’s it, with some small royalty stream that’s coming from the scheme. The royalty tends would be very small. It will change approaches to creation.” “It also has stifling effects on technologies. If you can get contents freely, what would be the incentive to have different distribution channels with different prices? The advantage of consumers in the US is that there are so many ways to reach movies. In compulsory licensing system, you loose all these choices.” It is true that deciding the amount of royalty and dividing it among copyright holders is, in practice, very difficult. If the amount is too small, it will surely change the manner of creation. However, this problem will be solved if we can make sure the amount is high enough to recoup their costs. What about loosing diversities of distribution channels? I don’t think that is true. Won’t we rather see more choices and competitions under compulsory licenses? I guess they don’t want to loose control and monopoly power over their works. It is often true that the financing structure is based on this monopoly power. You give companies an exclusive right to distribute in cinema, in videograms, on TV etc, and the distributors, in return, provide money for creation. The incentive for distributors to pay money is the exclusivity, because that would make their business easier. Under the compulsory licensing system, we may loose this fund raising system. The movie industry will have to find another way of creation. That sounds like a huge change. However, it is true at the same time, that there are many movies that are old and almost forgotten. There, movie industries are not making much money anyway. Maybe we can start introducing compulsory licensing system in that “outdated film” area, say those more than 3 or 5 years old? And we can experiment how the system works, and decide whether we want to expand the system or not. What do you think?
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