New study on transaction costs in music licensing
A new study, undertaken by KEA and iMinds-SMIT, Vrije Universiteit Brussel examines transaction costs (excluding the price of copyright licences) in relation to licensing for online music services. This study was funded by Google.
It analyses the online music markets and outlines the licensing processes in music. It offers a qualitative and quantitative analysis of transaction costs in the acquisition of the relevant rights by online music services.
Conclusions show that online music services face significant transaction costs - costs which are additional to the costs of licences themselves.
These costs are particularly high for
- services operating at a pan-European level offering a generalist repertoire
- innovative and new business models (streaming, subscription)
- services launched by new market entrants, such as internet service providers, pure online players or mobile device operators and manufacturers
It identifies rights fragmentation and lack of rights databases and identification standards as main reasons for this situation. It proposes policy recommendations to overcome these problems.
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