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19 Rev. Econ. Rsch. on Copyright Issues 1 (2022)

handle is hein.journals/rvwoecrh19 and id is 1 raw text is: Review of Economic Research on Copyright Issues, 2022, vol. 19, pp. 1-51 A PRACTICAL MODEL OF COPYRIGHT ECONOMICS WITH INTERMEDIARIES PETER DICOLA ABSTRACT. After streaming, what should copyright economics look like? The standard model of copyright economics used by courts and other policy makers - the protect what would otherwise be a public good from copyists model - is not general enough. It is particularly poorly suited for the era of internet streaming, because it assumes that the producers of creative works are vertically integrated with the utlimate retailers of those works. In this paper I argue for a new, rough-and-ready framework for use in formulating copyright policy. Rather than assuming a vertically integrated producer-retailer, my proposed model disaggregates the producer and the retailer, which I refer to more generally as an intermediary. One central feature of the streaming era is the growth and resulting bargaining power of technological intermediaries, including the large internet platforms and various popular streaming services. My proposed model of copyright economics allows for variation in the bargaining power of intermediaries, rather than implicitly assuming their power away. Making this shift in our mental model - our metaphor - for how copyright works changes the way we think about copyright law's economic functions. It also suggests the need to refocus copyright policy on the important dynamics between producers and intermediaries. 1. INTRODUCTION A key assumption in the standard model of copyright economics is that copyright own- ers are the relevant decisionmakers in the market for copies of their works. Copyright protection affords owners the opportunity to charge a price greater than the marginal cost of making and selling a copy. Without question, the standard model depicts the copyright owner as facing constraints in their choice. They face the costs of creating the work itself - the first copy - and the costs of producing subsequent copies. They also face a demand curve. That demand curve economists conceive has a lot of information embedded in it. It implicitly reflects not just consumer preferences in the abstract, but also consumer pref- erences given the existing, known set of business models for distributing and delivering copies of works for consumption. Somewhere in that demand curve, in other words, lurk the intermediaries that copyright owners almost always contract with to distribute, retail, I

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