Handbook on the Economics of Copyright
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Handbook on the Economics of Copyright

A Guide for Students and Teachers

Edited by Richard Watt

Featuring expert contributors from around the world, this book offers insight into the vital theoretical and practical aspects of the economics of copyright. Topics discussed include fair use, performers’ rights, copyright and trade, online music streaming, internet piracy, copyright and visual art markets, and open source publishing. In addition to in-depth coverage of these timely topics, the authors also offer insightful predictions and policy recommendations for the future.
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Chapter 9: The licensing of online music streaming services in Europe

Sebastian Felix Schwemer


With the rise of digital technologies, music consumption has undergone extensive development. Digitalisation has made a distinction between the medium and the content possible. New distribution channels have emerged for the dissemination of musical works and they have complemented and challenged traditional business models based on physical sales of records. While incumbent music labels traditionally controlled the retail distribution network, digital technologies created new, alternative distribution channels for commercial exploitation of musical works. Notably, the commercial breakthrough for music consumption in the form of downloads via Apple’s iTunes and in the form of streaming via Spotify came from actors outside of the music industry (see Dobusch and Quack, 2010). In recent years, legal online music streaming services have become rapidly popular and may provide ways for the music industry to hold on to legitimate distribution as well as to reduce online piracy. In these online-music streaming services, customers consume music – as opposed to downloads – without physical possession of the actual music file. Thus, a necessary prerequisite for streaming to become a viable form of music consumption has been the increased bandwidth that allows for the huge amount of data to be transferred to the consumer. The European Commission (see Impact Assessment, 2012) states that there are more than 300 legitimate online streaming services in Europe. In 2011, according to the music industry’s organisation IFPI, streaming income accounted for 42 per cent of music sold in Sweden and 49 per cent in Norway respectively (see IFPI, 2012).

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