Re: filmscanners: Importance of Copyright on Images

["Steve Greenbank" <steve@gccl.fsbusiness.co.uk>]

> Not if royalties are abolished entirely.  Everyone would be paid just once
for
> the work he does, at the time he does the work.
>

The car mechanic charges the same for each car he fixes because he has the
same work to do on each car. The lawyer is much the same as each contract is
just like one of the previous contracts. He no doubt buys in the initial
wording from elsewhere and inserts the appropriate names as applicable.

The artist would need to charge prohibitively large sums of money to the
first customer as nearly all the work is performed for the first customer.
Subsequent customers only need a very small amount of work. The only way
this system can work is if large companies are sold the control of the
product. They would have too much power and would exploit both the artist
and the end customer.

The royalty system works because each party can limit their risk and is
ultimately financially better off.

     The artist can sell a product much cheaper and hence find customers
much easier. If the product is particularly good the artist will make a lot
of money if it is not he will make very little.
     The publisher does not need to find a large sum of money to purchase
the rights of a product that might flop and hence avoids expensive mistakes.
He can make a small profit for a small run and a much larger profit on a
very successful product.
     The end customer will get more choice at more reasonable prices as the
flops are weeded out at little cost. If the customer

ARM Holdings have made a very successful business out of licensing chip
designs and collecting the royalties.

ARM have no expensive manufacturing facilities so have low overheads.
The chip manufacturers get new chip designs faster, more reliably and
cheaper.
The general public get new products that are better and cheaper.

I hardly think that Intel/TI/Motorola go to ARM for chip designs because it
costs them more money!

Steve

P.S. I have used ARM as an illustration as it is an obvious example of how
the royalty system does work as the chip manufacturing industry has been
transformed in a matter of a few short years by ARM.
I would like to declare a small interest as I do have a few ARM shares, but
I am in no way wishing to recommend/ramp the shares. In fact they are an
"unfashionable" tech stock with an unusually high PE ratio (not good).
Whatever happens to the share price the business model undoubtably works to
the benefit of everybody.