Innovation has wreaked creative destruction on traditional content platforms. During the decade following Napster’s rise and fall, industry organizations launched litigation campaigns to combat the dramatic downward pricing pressure created by the advent of zero-price, copyright-infringing content. These campaigns attracted a torrent of debate, still ongoing, among scholars and stakeholders—but this debate has missed the forest for the trees. Industry organizations have abandoned litigation efforts, and many copyright owners now compete directly with infringing products by offering licit content at a price of $0.
This sea change has ushered in an era of “copyright freeconomics.” Drawing on an emerging body of behavioral economics and consumer psychology literature, this Article demonstrates that, when faced with the “magic” of zero prices, the neoclassical economic model underpinning modern U.S. copyright law collapses. As a result, the shift to a freeconomic model raises fundamental questions that lie at the very heart of copyright law and theory. What should be made of the established distinction between “use” and “ownership”? To what extent does the dichotomy separating “utilitarian” from “moral” rights remain intact? And—perhaps most importantly—has copyright’s ever-widening law/norm divide finally been stretched to its breaking point? Or can copyright law itself undergo a sufficiently radical transformation and avoid the risk of extinction through irrelevance?
- copyright law,
- multisided markets,
- digital media,
- behavioral economics,
- zero-price effect,
- moral rights,
Available at: http://works.bepress.com/john_newman/2/