White paper on creativity - ebla center

Part IIIis easy to see that such content can be rapidly spread and simultaneously used by manyconsumers.Secondly, the high costs of content creation and low costs of their reproductionaugment the risk of economic losses for the producers.Investing in the creation of a new film or the launch of a new book is the largest cost forthe content industries. But this investment cost is written off independently of thesuccess of the work, since the investment is made before the market value of theproduct is known.Therefore the many failures on the content and information market always mean lossesfor producers. And losses can only be recovered through greater profits due to thelaunch of a few successful products. In this sense, a key strategy for the contentindustries is to offer a vast and highly differentiated product portfolio.Intellectual propertyThe goods in the content and information industries have a high creative content andare part of the sphere of intellectual property, especially as concerns copyright andrelated rights.The easy reproduction and distribution of copies of works not only influences businessmodels in the content industries but raises the question of how to protect the intellectualproperty rights of these goods.Given that the investment in the production of new content is per se an irrecoverablecost which can only be covered by profits from successful sales, then the greatest dangerfor the content industry is digital piracy.Precisely because reproduction and distribution costs of copies are minimal, the originalproducers could sell their goods at very low prices. But to ensure the creator has a returnon the initial investment, the price of goods must be kept high.The illegal distribution of copies of content can erode the possibility of making profitsfor the producers, thus reducing the incentives to invest in the creation of new works.That is why the protection of intellectual property becomes crucial for the productionand distribution of content goods.We must not be led to believe, however, that greater intellectual protection always meansgreater incentives to produce content and therefore greater social well-being. The causeeffectnexus between the protection of intellectual property and the creation anddissemination of content is very complex and depends on various factors. Since thediffusion of content and information goods generates positive externalities in thesubsequent consumption and underlies the production of new content, excessiveprotection of intellectual property may have positive effects on the illegal distribution ofcopies, but may also limit the positive externalities.WHITE PAPER ON CREATIVITY 157