82nd International Atlantic Economic Conference

October 13 - 16, 2016 | Washington, USA

How much should the music cost? – assessment of copyright value: Taxonomic and market comparison approach

Friday, October 14, 2016: 10:00 AM
Pawel Kossecki, Ph. D. , Film Production, Polish National Film Television and Theater School, Lodz, Poland
The development of a proper method for calculating the value of copyrights and related rights is an important task in the current climate of the new economy.

Costs of royalties paid to collecting societies are significant and disputable in many industries, like hotels or gastronomy. There are many disputes and law cases related to indicating fair value of copyrights. The dominant position of collecting societies resulted in a number of decisions of the European Commission and judgments of the European Court of Justice as well as national courts, concerning the activities of collecting societies and the level of fees collected. The problem was widely analyzed mainly by law specialists.

The market comparison assumes that in a free market, forces of supply and demand will create the so-called equilibrium price.

For valuation copyrights, methods based on income and market comparison are preferred, however, the fact that only a limited market exists for dealing with collecting societies, should be taken into consideration. Difficulties using market comparisons in calculations of Copyright Management Organisation royalties are due to the problem of collecting accurate data in different countries, and finding comparable markets.

Market comparison methodology supported by taxonomic measures was applied to find comparable markets. The objective of the investigations presented in the paper is to show the advantages and disadvantages of different methods of valuations and market comparison.

The presented method is useful to determine the fair value of copyrights and was prepared to help in legal disputes related to misusing dominant position by copyright.