Disneyland and the Texas Tower


A local artist paints landscapes and various Austin sights, including the Texas Tower (the university’s main building). He must pay the university a flat fee per year for the right to sell paintings of university property, emblems, or even anything containing the burnt-orange color. All are copyrighted. Also, if his sales rise above a certain level, he must pay the university 10 percent of his extra revenue.

This two-part tariff is fairly common, but why does it exist? Why not just a percentage, or why not just the fixed fee? A wonderful old paper (Walter Oi, “A Disneyland Dilemma,” Quarterly Journal of Economics, 1971) showed conditions when this pricing scheme makes sense for a price-discriminating monopolist. Looking at those conditions, I think that they are less relevant today than 40 years ago due to increased monitoring costs.

I would bet that, like Disneyland, more monopolists now charge only a fixed fee and forgo the percentages. That makes me wonder why my university imposes this two-part pricing scheme.


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  1. Vincent Clement says:

    I’d be wondering why he even pays a single cent to the university.

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  2. Joe says:

    Perhaps they are not monitoring (thus reducing those costs to 0). In that case, they are anticipating the fixed fee, but if a particular photo goes viral, they can cash in on the windfall.

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  3. Holme says:

    I agree with Vincent Clement. Why does he have to pay for selling his own paintings? The US laws on copyright are ridiculously extreme.

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  4. Noah says:

    In Paris, the Eiffel Tower’s image lapsed into the public domain so the city placed copyright on a new lighting design they installed on the tower. Now, if you want to shoot a movie or a still of Paris and focus on the tower at night, you have to pay (http://en.wikipedia.org/wiki/Eiffel_Tower#Image_copyright_claims)

    I’m a filmmaker in New York and a long source of frustration is the claim that brands can make to public space. For example, you can think of almost no movies that take place in Time Square. Why? Not because of permits. It’s because of copyright fears. When Vanilla Sky used it for an iconic scene they digitally replaced all the signage.

    I feel that if companies choose to place themselves into the public space that they should not be afforded the same level of protection for their iconography. This doesn’t mean that people get the right to use those brands and imply endorsement or the like. In the case of art in museums, they should be afforded different rights since they have control over access to the work and have not placed into the domain of the public (ie: public spaces).

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  5. Kevin says:

    My favorite line from that paper is this:

    “the imagination of a greedy entrepreneur outstrips the analytic ability of the economist.”

    Now if we could only find a way to get greedy entrepreneurs into economic academia…

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  6. nate says:

    imperfect information about the artist’s quality/popularity?

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  7. Tim says:

    It seems highly implausible to me that a color can be copyrighted. Can it? Really? Really really?

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  8. Donnie says:

    A building can be copyrighted?

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