Pressemitteilung/Press Release

Press Release of 15 April 2015

Digitization of the Music and Film Industries: Despite Weak Sales, an Increase in New Releases - Copyright Protection Having Only a Minor Effect

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Study conducted by DIW subsidiary DIW Econ examines whether copyright encourages innovation - technological development primarily responsible for the increasing number of new releases

Sales are going down, the number of new releases is going up: Although music industry revenues have plummeted by more than half since 2000, fresh content is still being released. Even in the film industry, the growth of sales and the number of new releases seem to be moving in opposite directions. Whether stricter copyright laws lead to an increase in the amount of new movie and music content being released was the subject of an analytical study conducted by Anselm Mattes and Yann Girard of DIW Econ, the consulting company of the German Institute for Economic Research (DIW Berlin), and Christian Handke of the University of Rotterdam for the Commission of Experts for Research and Innovation. The conclusion: "A clear effect was not detected. In theory, weaker copyright protection leads to a decreasing supply of creative works, but this effect is not playing out in real life - due to, among other reasons, the low costs of digital development and distribution, which means that more and more amateurs are also putting out creative content on the Internet,“ explained Mattes.

Copyright protection: An economic balancing act

To take a closer look at the effect of copyright protection on revenues, Mattes, Handke, and Girard put the German film industry and that of twelve other countries under the microscope. Using regression analyses, they found that the expansion of efficient Internet connections is having a positive effect on film industry revenue. In comparison, there is a statistically highly significant decrease in revenue when intellectual property protection is low in a particular country. Particularly striking: Despite the decline in sales, no effect of a low copyright protection on the number of new releases has been statistically demonstrated. According to the authors, the available data is insufficient and the exact impact of copyright protection is difficult to quantify.

The need for copyright protection has grown increasingly important in the public debate since the digital revolution of the late 1990s - but in this study, the authors point out that stricter copyright protection could also be counterproductive. On the one hand, copyright laws provide incentives for artists to invest in new creative works; on the other hand, subsequent innovations can be difficult if artists - including an increasing number of amateurs - want to build on existing works that are under prohibitively heavy protection. "Further reforms of copyright must balance the interests of professionals, and the ability for creative amateurs to build upon professional content." By analyzing a total of 500 videos, the authors of the study found that at 46 percent, professionally produced content still constitutes by far the largest group of retrievable content on the Internet platform YouTube - ahead of user-generated content, which comprises 33 percent. "A large-scale displacement of professional content is not what is happening here, especially since many of the amateur videos are actually based on commercial works," said the authors.

Links

DIW Economic Bulletin 16/2015 | PDF, 213.8 KB

Interview with Anselm Mattes | PDF, 61.97 KB

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German Institute for Economic Research

Founded in 1925, DIW Berlin (the German Institute for Economic Research) is one of the leading economic research institutes in Germany. The Institute analyzes the economic and social aspects of topical issues, formulating and disseminating policy advice based on its research findings. DIW Berlin is part of both the national and international scientific communities, provides research infrastructure to academics all over the world, and promotes the next generation of scientists. A member of the Leibniz Association, DIW Berlin is independent and primarily publicly funded.

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