Sound Recording Market : The Ambiguous Case of Copyright and Piracy

This paper attempts to analyse the organisation and the economics of information industries starting from the case of the phonographic market. The focus here is on the relationships between copyright, the pivotal element of the market, and unauthorised sound reproduction, its main lamented infringement. The trade-off between the push to diffusion and the push to exclusion, at the root of the market functioning, is here discussed to show that unauthorised reproduction should be considered as an endogenous constituent because of the institutional setting and which has positive effects for the industry itself. The analysis of the structure of the phonographic market and of its competitive mechanisms leads to a complex model in which both horizontal and vertical product differentiation coexist, and in which the unauthorised reproduction of information allows a sui-generis price discrimination. In this perspective, copyright and unauthorised reproduction are closely connected and probably inseparable