Does One-Size Copyright Fit All? Copyright and Innovation in Small Record Companies

This paper discusses empirical evidence on the importance of copyright as an incentive for technical innovation. It focuses on the case of small, 'independent' record companies in the context of widespread digital copying and a severe recession in the primary market of sound recordings. The evidence presented here implies that this type of firms: (1) regard copyright related factors hampering innovation to be of minor importance in comparison to other innovation obstacles; (2) consider problems with clearing copyrights to be a greater obstacle to innovative projects than problems with enforcing their own copyrights. We conclude that the innovation costs of copyright (and how to mitigate them) require greater attention.