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POLIS Working Papers - Working paper n. 196

Designing Fees for Music Copyright Holders in Radio Services

February 2012


Abstract

This paper investigates which is the most desirable payment schedule, from a social welfare standpoint, for compensating IPR holders for music broadcast by radio stations. A model of a radio station that acts as a monopoly with respect to listeners and sells ads in a competitive market is presented. Two types of fees, ad valorem and per unit, are examined.
Exploiting the similarity between taxes and fees, we extend results from taxation theory in two-sided markets to show that the case where only one side (i.e. advertisers) pays, while the other (the listeners) receives the service for free, di¤ers somewhat from the case thus far considered by the literature, in which both sides pay. The results mildly support the prevailing regulatory approach, based on ad valorem fees.

JEL Classification numbers

H23, H44, L82

Keywords

regulation, radio, collecting agencies, IPR fees

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Periodico mensile on-line "POLIS Working Papers" - Iscrizione n.591 del 12/05/2006 - Tribunale di Alessandria
ISSN: 2038-7296


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