Richard Watt talks of ‘Copyright Collectives and Contracts’ from an economic theory perspective

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This is a recording of the session which served as a joint keynote of SERCI & EPIP 2015.

The joint keynote, titled “Copyright Collectives and Contracts: An Economic Theory Perspective“, was presented by Richard Watt (University of Canterbury, NZ) and was chaired by Towse (CREATe and Bournemouth University). The respondents were Sylvie Nérisson (Max-Planck Institute), Morten Hviid (University of East Anglia), and, Scott Walker (Performing Rights Society/UK Music).


The existing economic theory of copyright collectives, or copyright management organizations (CMOs) is strongly focused on the benefits of sharing of transaction costs. Here, we appeal to the contractual environment of CMOs to offer a different perspective. Copyright collectives form contracts at two principle points along the supply chain. First, there are the contracts between the collective’s members themselves (the copyright holders), for distribution of the collective’s income. And second there are the licensing contracts that the collective signs with users of the repertory. Using standard economic theory, the paper argues that there are significant efficiency benefits from having copyrights managed as an aggregate repertory, rather than individually, based on risk-pooling and risk-sharing through the contracts between the members themselves. Similarly, there are also aggregation benefits (at least in terms of the profit of the CMO) of licensing only the entire repertory, rather than smaller sub-sets. Interestingly, there is a link between these two theories of the efficiency of collective, rather than individual, management, and it lies at the heart of the theory of syndicates, and the characteristics that imply that the group (or syndicate as a whole) can be considered as a valid “representative”, sharing the same preferences as each individual syndicate member.

The keynote is also available to download as a CREATe working paper from here.