Risk Sharing and the Distribution of Copyright Collective Income

Copyright collectives are groups of individual copyright holders who join together in order to save on the important transactions costs that exist in the market for their individual rights. However, transactions costs savings are not the only manner in which copyright holders can benefit from the collective administration of their copyrights. In particular, whenever there is uncertainty as to the final market value of individual copyrights, by joining together and offering a blanket license in the entire repertory, a copyright collective is able to offer a distribution of net income to the members that gives each one a better risk bearing situation than can be obtained by acting alone. Curiously, however, this aspect of collective administration of copyrights has been entirely ignored, both in the theoretical literature concerning copyright collectives, and in the way that real-life collectives distribute their income. The objective of this paper is to analyze the risk sharing benefits that copyright collectives can offer, but currently do not.