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THE ECONOMICS OF THE MUSIC BUSINESS

THE ECONOMICS OF THE MUSIC BUSINESS. Competition Law and Intellectual Property Protection in the Music Industry. Overview. Key industry characteristics Implications for competition in the music industry Impact of digital downloads? Future possible competition law issues.

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THE ECONOMICS OF THE MUSIC BUSINESS

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  1. SIMON BISHOP THE ECONOMICS OF THE MUSIC BUSINESS Competition Law and Intellectual Property Protection in the Music Industry

  2. Overview THE ECONOMICS OF THE MUSIC BUSINESS • Key industry characteristics • Implications for competition in the music industry • Impact of digital downloads? • Future possible competition law issues

  3. Music Industry is Highly Dynamic THE ECONOMICS OF THE MUSIC BUSINESS • Technological developments • New music products released almost every day

  4. The Music Industry is Characterised by… THE ECONOMICS OF THE MUSIC BUSINESS • Highly differentiated products • Demand is highly variable • Demand is often short-lived

  5. The Music Industry is also Characterised by… THE ECONOMICS OF THE MUSIC BUSINESS • High fixed costs / low marginal costs • Prices can not be related to manufacturing / distribution costs • Protection of IP rights is extremely important

  6. Implications for Competition THE ECONOMICS OF THE MUSIC BUSINESS • Non-price factors are an important parameter of competition • Pricing is complex and non-transparent

  7. Physical product Retail Store Internet Internet Download Mobile The Internet and its Implications for Competition THE ECONOMICS OF THE MUSIC BUSINESS Changes in Music Distribution

  8. What is the Impact of Piracy? THE ECONOMICS OF THE MUSIC BUSINESS • Pricing constraint? • Demand impact?

  9. Future Possible Competition Law Issues THE ECONOMICS OF THE MUSIC BUSINESS • Mergers • What lessons from Sony / BMG? • Apple the next MS? • Network effects? • Interoperability?

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