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April 24, 2002
CONTACT: David Fish
(202) 289-8928

Property Rights Crucial to Growth of Online Music
Foundation Provides Online Content "Primer" for Policymakers

WASHINGTON, D.C. - With the debate in Congress heating up over the proper legal and institutional framework for online music and other digital content, The Progress & Freedom Foundation has produced a new paper, “The Debate Over Online Content: Understanding the Issues,” to aid policymakers in their deliberations.

What should Congress do? According to co-authors Jeffrey A. Eisenach and William F. Adkinson, Jr., who serve as the Foundation’s president and senior policy counsel, “the market for digital online content is a dynamic one in a very early stage of development,” and policymakers should “exercise caution, since policy choices based on ‘the way things are’ are likely to be obsolete by the time they are implemented.”

Eisenach and Adkinson say “The development of an efficient market depends crucially on the existence of clear, enforceable property rights.” They conclude that “the current framework of copyright laws is falling short of this goal,” and that “the lack of a robust framework of property rights disrupts and distorts the marketplace and thus prevents all participants, including consumers, creators, producers and distributors, from enjoying the full benefits of these new technologies.”

“We believe a robust and growing market for online music and other rich digital content is crucial not only to the producers and consumers of such services, but to the restoration of growth in the IT sector overall,” they write. “Creating the conditions for a market that works should therefore rank near the top of the list of priorities for those concerned about the future health of the digital economy.”

Citing early experimentation by radio manufacturers, Eisenach and Adkinson write that markets for such technologies “have tended to develop along an ‘S’ curve, with growth in the early years generally relatively flat until an ‘inflection point’ is reached where growth accelerates exponentially.” During the early period, it is typical for firms to experiment with different business models. “Such experimentation is now well underway in the market for digital online content,” they write.

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation