Single-Payer Music Care?
posted by Frank Pasquale
Les bon temps roulez! It appears the French legislature has picked up on the conversation started by one of Christine Hurt’s posts here a few weeks ago on the iPod, and wants to do something about Apple’s iTunes lockout of rival music sellers and players. The IP blogosphere is abuzz over the move, which directly challenges Apple’s aggressive efforts to leverage dominance in the portable-player market into a monopoly over digital music retailing.
Libertarians are likely to applaud moves like this, as this Cato Institute Report demonstrates. But I want to push the dialogue in an even more market-oriented direction. Since we’re thinking big here, why don’t consumers take some self-help measures? The recording industry is extraordinarily concentrated, provoking antitrust investigations left and right. So why don’t consumers form buyers’ cooperatives? If the “big four” own 90% of the music, why don’t consumers form four or so buyers’ groups that will negotiate access to music? Each would manage a library with about one-fourth of recordings. That seems to be the model behind Europe’s efforts to hold down health care costs—have one or a few big players form a monopsony (or oligopsony?), and bargain down the price.
Now I’m not saying that’s always the best solution for health care—as Cutler, DiMasi, and others have noted, a lot of innovation is funded by the fragmented buying pool in the U.S. system. But while I care a lot about innovation in health care, I’m a bit agnostic about innovation in music. Can we reliably say that the whole lot of music composed and performed after 1980 is worth more than J.S. Bach’s oeuvre? I don’t know. So I don’t care if “single-payer music care” ends up reducing revenues to the culture industries. Admittedly, in the end, I think it would actually help those industries, as William Fisher so skillfully documents in his Promises to Keep. But that’s another post…
March 22, 2006 at 9:45 am
Posted in: Economic Analysis of Law, Intellectual Property, Technology
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Responses (3)
KipEsquire - March 22, 2006 at 11:35 am
No libertarian I’ve ever met would “applaud” a government bullying a company in a way, such as this, that is obviously meant to empower competitors rather than consumers.
Have we all forgotten that iTunes is free, has several (also free) competitors, that people can still buy CDs rather than download songs, and that the market dominance of the iPod may have more to do with the iPod itself than with iTunes?
Frank - March 22, 2006 at 12:53 pm
I highly recommend the Cato Institute report linked to in the post, which follows on some terrific stuff in Reason magazine by Boldrin & Levine on IP regulation (and James Boyle’s address to the Federalist Society (”Conservatives and IP”)).
Copyright and patent laws are government-granted monopolies. As Mark Lemley has noted in his recent piece Property, IP, and Free Riding (in reference to some of Tom Bell’s insights), IP is best thought of, not as a form of property, but as a government subsidy to certain industries.
It is entirely reasonable for conservatives to suspect that, at least in the case of music, an industry cartel has lobbied for special subsidy from the government, and gotten it. (Jessica Litman’s book Digital Copyright traces the relevant legislative history.) If you oppose agricultural subsidies, you might want to think about opposing legislation that grants certain IP industries a privileged position vis a vis others. As for Apple’s “naturally” dominant position: their business strategy is only feasible given government protections of “paracopyright” granted in the DMCA of 1998.
PS: the recording industry has successfully lobbied congress to require composers and lyricists to compulsorily license their works. I don’t see why they don’t apply the same logic to their own recordings, and accept a proposal like Fisher’s.
Bruce - March 22, 2006 at 3:10 pm
Frank, the “privileged position” comes from the fact IP owners own the IP. You may think certain protective measures go too far (an analogy would be pro-booby-trapping laws for real property owners), but it’s just kind of weird to talk about a “privileged position” with respect to their own property — that’s the whole idea.
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