71 Am. U. L. Rev. 111 (2021).
According to popular and scholarly belief, video killed the radio star. The golden age of radio, culminating in the 1930s and 1940s, was gone with the rise of television in the 1950s and 1960s. In this Article, we advance the claim that television’s role in the “death” of the radio star has been more limited than commonly believed. A major culprit, we argue, is the common licensing practice of musical content for broadcasting, or more precisely, the blanket license issued by copyright collective management organizations (CMOs). By setting a zero marginal price for broadcasting additional songs from the CMO’s repertoire, CMOs’ blanket licensing drives commercial radio stations to dedicate a larger portion of their programming to the broadcasting of recorded songs and to reduce the time and resources spent on producing or procuring other content.
This Article makes three main contributions to three fields: competition law and policy; copyright law and policy; and cultural history. For competition law and policy, this Article reveals that the analysis of blanket licenses should not be limited to their static effects (i.e., the trade-off between lower transaction costs and supra-competitive pricing), but should also include the dynamic effect of blanket licensing on the type and quality of content production. This dynamic effect also poses a challenge for copyright law and policy: while collective licensing may be beneficial to one class of copyright holders, it may hinder the production of other content and harm creators of such content, by depriving them of important opportunities for market and cultural participation. Regarding cultural history, our Article provides a novel explanation for the well-documented phenomenon of the “death” of the radio star and re-evaluates some of the existing explanations. Finally, we discuss some alternative models for music licensing that can mitigate the distortion created by blanket licenses.
* Ariel Katz, Associate Professor, University of Toronto, Faculty of Law; Eden Sarid, Lecturer (Assistant Professor), University of Essex, School of Law. For helpful comments and conversations, the Authors thank Haim Abraham, Omri Ben-Zvi, Michael Birnhack, Kristelia Garcia, Stavroula Karapapa, Barak Orbach, Flint Patterson, Marc Perlman, Lorna Woods, and Eugenio Vaccari. The Authors also thank participants of the Cambridge-University of Florida Antitrust Virtual Series; University of Essex, Business Law Research Cluster; the Canadian Law and Economics Association Conference; the European Policy for Intellectual Property Conference; Tel-Aviv University Law and Technology Workshop; Conference of the International Society for the History and Theory of Intellectual Property; Society for Economic Research on Copyright Issues Annual Congress; Tilburg Law and Economics Center Workshop on Competition Policy and Regulation in Media and Telecommunications; and the IP Scholars Conference at Stanford University. The Authors also thank the Canadian Social Sciences and Humanities Research Council for its financial support. Finally, the Authors wish to thank the editors of the American University Law Review for their insights and suggestions.