Can creative firms thrive without copyright? Value generation and capture from private-collective innovation

Accounts of the ‘copyright industries’ in national reports suggest that strong intellectual property rights support creative firms. However, mounting evidence from sectors such as video game production and 3D printing indicate that business models based on open IP can also be profitable. This study investigates the relationship between IP protection and value capture for creative industry firms engaged in collective/open innovation activities. A sample of 22 businesses interviewed in this study did not require exclusive ownership of creative materials, instead employing a range of strategies to compete and capture value. Benefits for some firms resemble those for participants in private-collective innovation (PCI), originally observed in open source software development (von Hippel, von Krogh, 2003). Advantages of PCI include the ability to commercialize user improvements and a reduction in transaction costs related to seeking and obtaining permission to innovate upon existing ideas. Some creative firms in this study were able to generate and capture value from PCI in two directions, upstream and downstream. These dynamics offer a mechanism to understand and articulate the value of openness for creative industries policy and management of creative organizations. Keywords: private-collective innovation, copyright, creative industries, appropriability, business model