The Economics of Copyright

Copyright generates more than $1 trillion annually in revenue in the United States alone, and intellectual property activity contributes nearly 20% of America's GDP. Worldwide, copyright and creative works account for tens of trillions of dollars annually in economic activity, but in a in a world without borders for content, it's still amazing that copyright law remains a regional regime and very few are calling for global reform, or a substantive update to the Berne Convention (the most widely adopted international treaty for copyright protection.) Today, local country laws still largely define the licensing and royalty collection processes for music and film, leaving distributors to spend large sums of money trying to legally offer their services. With such an antiquated system, cross-border collection of royalties remains unduly complicated (fortunately, tracking payments has become easier (theoretically) in a digital world of big data and micro-payments from a streaming world.) However, licensing has not become any easier, as those wishing to use music in different territories must still adapt to local laws. This leads to the familiar "Netflix/Pandora/etc is not available in your country" error message when outside the United States, leaving opportunities on the table in places like France, where demand for Netflix is high and no alternatives to illegal downloading exist for those who want to watch American TV shows like Game of Thrones or House of Cards.

Change won't be easy. Embedded cultures and favoritism for local artists will lead many countries to stall or refuse real reform if their traditional protections and ideas for copyright are not included in any new legal reforms. The EU's recently announced Pan-European licensing directive is a step in the right direction for music licensing in Europe, but its passage and implementation have been fraught with challenges.

It's time for us to think strategically and push lawmakers to adopt full global copyright reform. In the interim, multi-territory regional agreements, as well as technology, can drive new business models for collection of royalty payments and increased revenues for artists, companies, and the industry as a whole.