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Eg Phd, Mphil, Dclinpsychol This thesis has been submitted in fulfilment of the requirements for a postgraduate degree (e.g. PhD, MPhil, DClinPsychol) at the University of Edinburgh. Please note the following terms and conditions of use: This work is protected by copyright and other intellectual property rights, which are retained by the thesis author, unless otherwise stated. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge. This thesis cannot be reproduced or quoted extensively from without first obtaining permission in writing from the author. The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the author. When referring to this work, full bibliographic details including the author, title, awarding institution and date of the thesis must be given. TEST FOR ECHO: COMPETITION LAW AND THE MUSIC INDUSTRIES FROM A BUSINESS MODEL PERSPECTIVE Evgenia Kanellopoulou Thesis submitted for the degree of Doctor of Philosophy University of Edinburgh, School of Law Academic year 2016/2017 DECLARATION I declare that this thesis was composed by myself and that the work contained herein is my own except where explicitly stated otherwise in the text. This thesis contains parts of work submitted to the University of Glasgow for the award of the LLM in International Commercial Law (academic year 2010/2011). Signed 1 Table of Contents DECLARATION ............................................................................................................... 1 ABSTRACT ..................................................................................................................... 5 LAY SUMMARY .............................................................................................................. 6 ACKNOWLEDGMENTS ................................................................................................... 7 Table of cases & Legislation .......................................................................................... 9 EU ......................................................................................................................................... 9 UK ....................................................................................................................................... 11 US ....................................................................................................................................... 12 International Treaties .......................................................................................................... 15 Glossary ...................................................................................................................... 15 PART ONE .................................................................................................................... 18 CHAPTER I ................................................................................................................... 18 1 ‘Overture’: Business Models for the Music Industries .............................................. 18 1.1 Introduction .................................................................................................... 18 1.2 Main research question .................................................................................. 21 1.3 Employing business models to examine the creation of relevant markets for the music industries and raise the thesis’ hypothesis ................................................. 26 1.3.1 Business models: studying and defining a concept ................................................... 27 1.3.2 The music industries as a field of study for the Business Model Generation .......... 30 1.3.3 The 9 Building Blocks of the Business Model Generation in detail ........................... 31 1.3.4 Taking the Building Blocks further .............................................................................. 38 i. Business model innovation and innovation in the creative industries: what does a business model reveal? ......................................................................................................... 38 1.3.4.1 Business models and copyright ............................................................................ 40 1.3.4.2 Business models and markets for music .............................................................. 43 1.3.4.3 Business Models for music and competition law ................................................. 44 1.4 ‘Grand Designs’ .............................................................................................. 46 1.5 Jurisdiction ...................................................................................................... 48 1.6 ‘Language’ ...................................................................................................... 48 CHAPTER II .................................................................................................................. 49 2 ‘Permanent Waves’: The Copyright Story of a Business Model ................................ 49 2.1 Introduction .................................................................................................... 49 2.2 The early days of the music industry: key resources and key activities ........... 52 2.2.1 The patent as key resource ......................................................................................... 53 2.2.2 How the hardware business became the music business and role of copyright: a change in key resource and the standardisation of the industry’s key activities .................. 60 2.2.2.1 Recording ............................................................................................................... 60 2.2.2.2 Publishing and performing .................................................................................... 65 2.2.2.3 The protection of sound recordings...................................................................... 70 2 2.3 Conclusion ...................................................................................................... 72 2.4 A timeline of events ........................................................................................ 76 CHAPTER III ................................................................................................................. 79 3 ‘Moving Pictures’: Examining Old and New Business Models, and the role of the End Consumer in the Music Industries .................................................................................... 79 3.1 Introduction .................................................................................................... 79 3.2 The old business model of the music industry ................................................. 84 3.2.1 The record company and its dominant business model: towards the creation of an oligonomy for the supply of music ........................................................................................... 84 3.2.2 The oligonomy gets established.................................................................................. 96 3.2.3 The behaviour of the oligonomy: supply and distribution of a product for music to the mass market ........................................................................................................................ 98 3.2.3.1 The oligonomy as gatekeepers ............................................................................. 98 3.2.3.2 Gatekeeper function: controlling supply and distribution ................................ 104 3.2.4 The oligonomic ‘empire’ of music: a brief look into mergers, acquisitions, and integration .............................................................................................................................. 108 3.2.5 The Business model of the oligonomy and the product for music: assessment ... 112 3.3 Innovation beyond the oligonomy ................................................................ 115 3.3.1 Dawn of the digital era: gatekeepers in peril .......................................................... 115 3.3.2 Live Music Industry: where is the consumer going? ............................................... 124 3.4 Conclusions on business models in the music industries: an assessment of creativity and innovation .......................................................................................... 133 PART TWO ................................................................................................................. 138 PREFACE ........................................................................................................................... 138 CHAPTER IV ............................................................................................................... 145 4 ‘The Spirit of Radio’: Assessing the Business Models of the Music Industries from the Perspective of the Competition Authorities ex post ........................................................ 145 4.1 Oligonomy and the radio: intervention by proxy? ......................................... 145 4.1.1 ‘Pay me my money down’ ........................................................................................ 145 4.1.2 Thoughts beyond payola .......................................................................................... 154 4.2 Intervention and appreciation of industry’s business model ex post: US and UK perspectives .............................................................................................................. 156 4.2.1 Columbia Broadcasting System, Inc.,
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