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Tradable Music Certificates - the Protection of Music as a Global Commons

The music industry has suffered losses that are attributed to the existence of copyright piracy. The two principal forms of copyright infringement, CD piracy and Internet piracy, have distinct effects and peculiarities. Using a Public Good topology I categorize the different forms of piracy and derive optimal music distribution forms based on internalization mechanisms for external effects. CD piracy shows similarities to the problems that exist with the provision of Global Commons (in Germanic law: Allmende) goods while Internet piracy resembles a Club good situation. I show that a subscription model for online music distribution is a optimal provision model for Club goods. A digital rights management system based on the idea of emission certificates has advantages in situations where CD piracy is prevailing.