Rethinking Copyright Policy in the Digital Age: Balancing Incentives for Creation and Access

forthcoming

Copyrights are a key driver of the creative industries and a cornerstone of modern economic activity. At its core, copyright protection must balance a fundamental trade-off between encouraging investment in creative products and ensuring their access. Weak copyright protection risks undermining creators' incentives to innovate, while overly strong protection can discourage the dissemination of ideas. Despite its crucial importance, we empirically know very little about the optimal level of copyright protection, and current copyright laws tend to reflect historical precedents rather than rigorous economic analysis. Digitization has reshaped both cost and revenue structures, further affecting the trade-off at the heart of copyright. RECODE will investigate these economic dynamics in three parts. The first and fundamental part will focus on determining the optimal copyright term in the music, book, and movie industries, accounting for the distinctive aspects of each of these sectors. The analysis will address the inherent uncertainty creators face in predicting the success of their works, a defining feature of the creative industries with significant yet unexplored implications for optimal copyright protection. The second part of RECODE will investigate how digitization has impacted music reuse and the resulting information spillovers that drive demand for reused works, informing the design of the optimal copyright term as well as fair use provisions. Third, RECODE will analyze news content licensing practices in the context of recent policies that mandate large online platforms to compensate news outlets when their content is used. More specifically, it will investigate the impact of social media platforms and news aggregators on the market for news, including their effect on news consumption and competition among outlets. Based on a broad set of empirical tools, RECODE will break new ground in research and deliver impactful, policy-relevant insights.