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It Wasn’t Right At The Time… February 18, 2009

Posted by Dominic in Uncategorized.
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The reaction to last Thursday’s vote has been interesting. It has received a warm welcome from most quarters, but there are still some harking back to the 2006 Gowers Report. This, they say, proves there is no economic benefit to extending copyright term for the performers and producers. Well, it certainly says that, but does it prove it?

Gowers puts great faith in an economic study he commissioned from an academic at Cambridge University. This is a long document, including a number of dazzling economic formulae (one of which contains an error which renders the result meaningless). Stripping back the commentary, the study is based on a monopoly model, thereby assuming that artists and record companies have monopoly powers when negotiating with retailers. Try telling that to anyone, including a major label, negotiating a deal with Tesco, or iTunes, or HMV. The reality is that the music industry operates on a bargaining model. It’s a take-it-or-leave-it situation and, because we are so successful in producing records, both in quality and quantity, the retailer tends to have the upper hand. That’s why consumers pay the same for out-of-copyright recordings as they do for those in copyright. It is market forces at work.

But the biggest gap in Gowers’ analysis of the impact of copyright term was the position of performers. He ignored the fact that performers value the royalties they get from their recordings, however big or small. MEPs in Brussels have recognised that and have voted to give musicians their due.

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