The changing location of intellectual property rights in music: A study of music publishers, collecting societies and media conglomerates

Prometheus: Critical Studies in Innovation

Volumn 17, Issue 2, 1999, Pages 163-186

  Kretschmer, Martin ^a   Klimis, George Michael ^a   Wallis, Roger ^a  

^a NONE

Author keywords

Globalisation; Information society; Intellectual property; Music copyright; Royalty; Vertical integration

Indexed keywords

DEREGULATION; MEDIA INDUSTRY; MUSIC; PROPERTY RIGHTS;

EID: 0032877733     PISSN: 08109028     EISSN: None     Source Type: Journal    
DOI: 10.1080/08109029908629548     Document Type: Article

References (42)

1. We acknowledge financial assistance from the Economic and Social Research Council in the UK, grant nos. L12G251003 ('Globalisation, technology and creativity') and L325253009 ('Intellectual property and knowledge transfer'). Many thanks to Anne Barron, Peter Drahos and Simon Frith for helpful comments.
2. On the implications of linking intellectual property to trade issues, see Peter Drahos, 'Global property rights in information: the story of TRIPS at the GATT', Prometheus, 13, 1, 1995, pp. 6-19; Peter Drahos (ed.), Special Issue: Trade and Intellectual Property, Prometheus, 16, 3, 1998.
3. On the implications of linking intellectual property to trade issues, see Peter Drahos, 'Global property rights in information: the story of TRIPS at the GATT', Prometheus, 13, 1, 1995, pp. 6-19; Peter Drahos (ed.), Special Issue: Trade and Intellectual Property, Prometheus, 16, 3, 1998.
4. In many markets, new acts first sign with a record company before contracting to a publisher.
5. The figure of 20-30% was given by the CFO of one multinational company. We have been unable to verify this claim. Universal's offer for Polygram was reduced to S10.4 billion in June 1998. The deal was completed in December 1998. On the author as functional principle, compare Michel Foucault's notorious diagnosis: '... the author is not an indefinite source of significations which fill a work; the author does not precede the works; he is a certain functional principle by which, in our culture, one limits, excludes, and chooses; in short by which one impedes the free circulation, the free manipulation, the free composition, decomposition, and recomposition of fiction'. Michel Foucault, 'What is an author?', in Paul Rabinow (ed.), The Foucault Reader, Pantheon, New York, 1984, p. 101.
6. Simon Frith, 'The industrialisation of popular music', in J. Lull (ed.), Popular Music and Communication (2nd ed.), Sage, Beverley Hills, 1993, pp. 49-74.
7. Michael Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors, Free Press, New York, 1980.
8. Financial Times Newsletter, Music & Copyright, 17 July 1996.
9. The role of network effects for the fashion dynamics of cultural markets is examined in Martin Kretschmer, George M. Klimis and Chong Ju Choi, 'Increasing returns and social contagion in cultural industries', British Journal of Management, 1999 (BAM special issue, forthcoming). The income distribution of the British Copyright Society PRS is analysed in Monopolies and Mergers Commission, Performing Rights, HMSO, London, Cm 3147, pp. 65-6.
10. Nigel Williamson, Times Saturday Magazine, 6 February 1999, p. 37.
11. Marcus Breen, 'The end of the world as we know it: popular music's cultural mobility', Cultural Studies, 9, 1995, pp. 486-504.
12. Harold L. Vogel, Entertainment Industry Economics, Cambridge University Press, Cambridge, 1994, pp. 31ff. Since 1995, Dreamworks (led by Spielberg, Katzenberg and Geffen) has had some success in establishing a new major studio.
13. Martin Kretschmer, 'Intellectual property in music: A historical analysis of rhetoric and institutional practices', Studies in Cultures, Organizations and Societies 1999 (special issue: Arts Management and Cultural Industry, forthcoming). Ferdinand Melichar, Die Wahrnehmung von Urheberrechten durch Verwertungsgesellschaften, Munich, 1983.
14. William Boosey (heir to the publishing dynasty), Fifty Years of Music, London, 1931, p. 175.
15. Mihály Ficsor, 'Copyright for the digital era: The WIPO 'internet' treaties', Columbia - VLA Journal of Law and the Arts, 21, 3-4, 1998, pp. 197-223. The US congress implemented these terms with the Digital Millennium Copyright Act, passed on 8 October 1998. The European Parliament adopted a directive to the same effect on 10 February 1999.
16. The topical debate between copyright maximalists and minimalists is well covered in P. Bernt Hugenholtz (ed.), The Future of Copyright in a Digital Environment, Kluwer, The Hague, 1996. See also Pamela Samuelson, 'A prohibition law glides over internet', International UNESCO Symposium on the Effects of New Technology on Cultural Information, Transmission and Dissemination, the Protection of Authors' Rights and Other Holders of Rights, Cultural Developments and Trends in Social Life, Madrid, 11-14 March 1996 (available at http://negocios.com/tendencias/artic11.htm).
17. The topical debate between copyright maximalists and minimalists is well covered in P. Bernt Hugenholtz (ed.), The Future of Copyright in a Digital Environment, Kluwer, The Hague, 1996. See also Pamela Samuelson, 'A prohibition law glides over internet', International UNESCO Symposium on the Effects of New Technology on Cultural Information, Transmission and Dissemination, the Protection of Authors' Rights and Other Holders of Rights, Cultural Developments and Trends in Social Life, Madrid, 11-14 March 1996 (available at http://negocios.com/tendencias/artic11.htm).
18. John Kay, 'The economics of intellectual property rights', International Review of Law and Economics, 13, 1993, pp. 337-48 (p. 340); Ruth Towse, 'Copyright as an economic incentive', in Hector L. MacQueen (ed.), Special Issue: Innovation, Incentive and Reward: Intellectual Property Law and Policy, David Hume Papers on Public Policy, 5, 1, 1997, pp. 31-45 (p. 39).
19. John Kay, 'The economics of intellectual property rights', International Review of Law and Economics, 13, 1993, pp. 337-48 (p. 340); Ruth Towse, 'Copyright as an economic incentive', in Hector L. MacQueen (ed.), Special Issue: Innovation, Incentive and Reward: Intellectual Property Law and Policy, David Hume Papers on Public Policy, 5, 1, 1997, pp. 31-45 (p. 39).
20. Financial Times Newsletter, Music & Copyright, 17 July 1996.
21. Gunnar Petri, 'Copyright: The right to ownership', in Roger Wallis (ed.), The Big Picture: The Global Entertainment and Telecommunications Forecast, American Chamber of Commerce, London, 1997, pp. 106-7; quoted in Roger Wallis, Charles Baden-Fuller, Martin Kretschmer and George M. Klimis, 'Contested collective administration of intellectual property rights in music: the challenge to the principles of reciprocity and solidarity', European Journal of Communication, 14, 1, 1999, pp. 5-35. For a conflicting analysis, accusing the collecting societies of charging excessive rates and handling fees, see John Temple Lang, Media, Multimedia and European Community Antitrust Law, Competition Directorate of the European Commission (DGIV) working paper, 1997, pp. 51ff.
22. Gunnar Petri, 'Copyright: The right to ownership', in Roger Wallis (ed.), The Big Picture: The Global Entertainment and Telecommunications Forecast, American Chamber of Commerce, London, 1997, pp. 106-7; quoted in Roger Wallis, Charles Baden-Fuller, Martin Kretschmer and George M. Klimis, 'Contested collective administration of intellectual property rights in music: the challenge to the principles of reciprocity and solidarity', European Journal of Communication, 14, 1, 1999, pp. 5-35. For a conflicting analysis, accusing the collecting societies of charging excessive rates and handling fees, see John Temple Lang, Media, Multimedia and European Community Antitrust Law, Competition Directorate of the European Commission (DGIV) working paper, 1997, pp. 51ff.
23. Gunnar Petri, 'Copyright: The right to ownership', in Roger Wallis (ed.), The Big Picture: The Global Entertainment and Telecommunications Forecast, American Chamber of Commerce, London, 1997, pp. 106-7; quoted in Roger Wallis, Charles Baden-Fuller, Martin Kretschmer and George M. Klimis, 'Contested collective administration of intellectual property rights in music: the challenge to the principles of reciprocity and solidarity', European Journal of Communication, 14, 1, 1999, pp. 5-35. For a conflicting analysis, accusing the collecting societies of charging excessive rates and handling fees, see John Temple Lang, Media, Multimedia and European Community Antitrust Law, Competition Directorate of the European Commission (DGIV) working paper, 1997, pp. 51ff.
24. This 'inalienability' is prominent in civil law conceptions of a creator's droit moral, the right to claim authorship of a work, and to protect its integrity. Raymond Sarraute, 'Current theory on the moral right of authors and artists under French law', American Journal of Comparative Law, 16, 1968, pp. 465-86; Robyn Durie, 'Moral rights and the English business community', Entertainment Law Review, 1, 1991, pp. 40-9.
25. This 'inalienability' is prominent in civil law conceptions of a creator's droit moral, the right to claim authorship of a work, and to protect its integrity. Raymond Sarraute, 'Current theory on the moral right of authors and artists under French law', American Journal of Comparative Law, 16, 1968, pp. 465-86; Robyn Durie, 'Moral rights and the English business community', Entertainment Law Review, 1, 1991, pp. 40-9.
26. W. Landes and R. Posner, 'An economic analysis of copyright law', Journal of Legal Studies, 18, 1989, pp. 325-66. For a critique, see R. Towse, op. cit., p. 34, who casts the relationship of author to publisher as a principal-agent problem.
27. W. Landes and R. Posner, 'An economic analysis of copyright law', Journal of Legal Studies, 18, 1989, pp. 325-66. For a critique, see R. Towse, op. cit., p. 34, who casts the relationship of author to publisher as a principal-agent problem.
28. Contract terms are never officially revealed by the industry. The above figures are regarded as reliable, and are often repeated in the trade press (Rolling Stone, Hollywood Reporter, Billboard, Music Week).
29. George Michael's original deal with CBS (as part of the group Wham!) was signed in 1983 and was to last until 2005. After the battle won in the UK High Court, Michael's record company (now Sony) agreed to release the artist from his contract only against a 3% royalty on Michael's next two albums (with Dreamworks and Virgin), while retaining the rights to his valuable back catalogue and a Greatest Hit compilation (MBI, August 1995).
30. Instructive material on this decade can be found in Paul M. Hirsch (ed.), Globalization of Mass Media Ownership, Communication Research, 19, 6, 1992; Krister Malm and Roger Wallis, Media Policy and Music Activity, Roudedge, London, 1992; Roger Wallis, Internationalisation, Localisation and Integration: The Changing Structure of the Music Industry, University of Gothenburg, Department of Mass Communication, working paper, 1990.
31. Instructive material on this decade can be found in Paul M. Hirsch (ed.), Globalization of Mass Media Ownership, Communication Research, 19, 6, 1992; Krister Malm and Roger Wallis, Media Policy and Music Activity, Roudedge, London, 1992; Roger Wallis, Internationalisation, Localisation and Integration: The Changing Structure of the Music Industry, University of Gothenburg, Department of Mass Communication, working paper, 1990.
32. Instructive material on this decade can be found in Paul M. Hirsch (ed.), Globalization of Mass Media Ownership, Communication Research, 19, 6, 1992; Krister Malm and Roger Wallis, Media Policy and Music Activity, Roudedge, London, 1992; Roger Wallis, Internationalisation, Localisation and Integration: The Changing Structure of the Music Industry, University of Gothenburg, Department of Mass Communication, working paper, 1990.
33. J. Qualen, The Music Industry: The End of Vinyl, Comedia, London, 1985; K. Roc and R. Wallis, 'One planet - one music: The development of music television in Europe', Nordicom Review, 1989, pp. 35-41; Paul Rutten, 'Local popular music on the national and international markets', Cultural Studies, 5, 1991, pp. 294-305. According to one multinational record company, one-eighth of revenues are now royalty earnings.
34. J. Qualen, The Music Industry: The End of Vinyl, Comedia, London, 1985; K. Roc and R. Wallis, 'One planet - one music: The development of music television in Europe', Nordicom Review, 1989, pp. 35-41; Paul Rutten, 'Local popular music on the national and international markets', Cultural Studies, 5, 1991, pp. 294-305. According to one multinational record company, one-eighth of revenues are now royalty earnings.
35. J. Qualen, The Music Industry: The End of Vinyl, Comedia, London, 1985; K. Roc and R. Wallis, 'One planet - one music: The development of music television in Europe', Nordicom Review, 1989, pp. 35-41; Paul Rutten, 'Local popular music on the national and international markets', Cultural Studies, 5, 1991, pp. 294-305. According to one multinational record company, one-eighth of revenues are now royalty earnings.
36. Intellectual Property and the National Information Infrastructure. The Report of the Working Group on Intellectual Property (chaired by Bruce Lehman), US Patent and Trademark Office, 1995; The Emerging Digital Economy, US Department of Commerce, April 1998 (available at www.ecommerce.gov). Publications of the European Commission include Europe and the Global Information Society, Bangemann Report, May 1994 (http://www.ispo.cec.be/infosoc/backg/bangeman.html); and Convergence of the Telecommunications, Media and Information Technology Sectors, and the Implications for Regulation: Towards an Information Society Approach, COM(97) 623.
37. Intellectual Property and the National Information Infrastructure. The Report of the Working Group on Intellectual Property (chaired by Bruce Lehman), US Patent and Trademark Office, 1995; The Emerging Digital Economy, US Department of Commerce, April 1998 (available at www.ecommerce.gov). Publications of the European Commission include Europe and the Global Information Society, Bangemann Report, May 1994 (http://www.ispo.cec.be/infosoc/backg/bangeman.html); and Convergence of the Telecommunications, Media and Information Technology Sectors, and the Implications for Regulation: Towards an Information Society Approach, COM(97) 623.
38. Intellectual Property and the National Information Infrastructure. The Report of the Working Group on Intellectual Property (chaired by Bruce Lehman), US Patent and Trademark Office, 1995; The Emerging Digital Economy, US Department of Commerce, April 1998 (available at www.ecommerce.gov). Publications of the European Commission include Europe and the Global Information Society, Bangemann Report, May 1994 (http://www.ispo.cec.be/infosoc/backg/bangeman.html); and Convergence of the Telecommunications, Media and Information Technology Sectors, and the Implications for Regulation: Towards an Information Society Approach, COM(97) 623.
39. Intellectual Property and the National Information Infrastructure. The Report of the Working Group on Intellectual Property (chaired by Bruce Lehman), US Patent and Trademark Office, 1995; The Emerging Digital Economy, US Department of Commerce, April 1998 (available at www.ecommerce.gov). Publications of the European Commission include Europe and the Global Information Society, Bangemann Report, May 1994 (http://www.ispo.cec.be/infosoc/backg/bangeman.html); and Convergence of the Telecommunications, Media and Information Technology Sectors, and the Implications for Regulation: Towards an Information Society Approach, COM(97) 623.
40. Alice Rawsthorn, 'Big five shudder at digital jukeboxes', Financial Times, 13 January 1999.
41. In 1997, David Bowie issued bonds secured against future royalties from his back catalogue of rights, raising S55m. Rod Steward and heavy metal band Iron Maiden have followed suit ('Superstars give you their bond', Financial Times, 7 February 1998;
42. 'Iron Maiden to tune in with bond package', Evening Standard, 26 January 1999). Twenty years ago, Frank Zappa proved the income potential of mail order operations controlled by the artist. The internet is increasingly used for this purpose.