Revised 26/01/02 1 To be published in Economics, Law and Intellectual Property ed. Ove Granstrand. Kluwer Academic Publishers. Copyright and Cultural Policy for the Creative Industries1

Copyright, which was initially introduced for the encouragement of authors of literary and artistic works, is not able to offer artists sufficient economic incentive to create. Royalty payments to all but the top artists are typically small and firms in the creative industries are typically large, making for a very unequal bargaining situation. Already, though, digital delivery of cultural products is beginning to change this scenario and we can consider possible effects on markets and the implications for copyright and cultural policy