The Three-Legged Stool of Value of Copyrighted Music: Hertzian Radio, SiriusXM, and Spotify (The Working Paper Version – v2)
Pricing copyrighted works or assets has always been a difficult task given the information good character of such works. Doing it in the digital era is even more challenging. This paper proposes an approach to infer the competitive market value of copyrights in music from choices made by users namely the operators of Hertzian radio (HR), satellite radio (SiriusXM), and interactive music streaming services (Spotify). The inferred competitive values, which are obtained independently, fall in the same ballpark, although they need not be equal or even close as business models and cost structures differ significantly between those music delivery technologies. Nevertheless the estimated competitive market values of music copyrights clearly indicate that rightsholders are significantly shortchanged and poorly served by the current copyright pricing framework. Appendix A presents the data from which one can infer the value of music in HR. Appendix B presents an overview of the debate before the Copyright Board of Canada following the presentation of the model from which the value of music in HR can be inferred.