Copyright Intensive Firms Are Excessively Profitable
from the that's-what-monopolies-do... dept
For all the talk from the copyright intensive companies out there lately about how they need stronger and stronger copyright laws because their business is collapsing, a new study points out that copyright intensive firms appear to be inordinately profitable.
We found that the firms in the copyright-intensive industries were significantly more profitable than the firms in the other industries in every period examined. Moreover, in this ten-year period, the copyright-intensive industries’ profit margins on average grew by 3.98%, while the other industries’ profit margins on average decreased by 0.75%.
The high level of profitability of the copyright-intensive industries suggests that the copyright system serves these industries effectively, and that they are not in need of special government assistance in the form of new legislation or law enforcement resources.
Actually, you can go even further than that. If entire industries are making profits well above the norm, it actually suggests an inefficiency in the market — which is basically exactly what you’d expect when you’re talking about an industry that’s given a set of government-granted monopolies. What those do is limit competition, create artificial scarcity, drive up the prices for consumers, and limit innovation that might provide more consumer surplus. The fact that the industries appear to be quite profitable suggests that may be a key issue at play here. At the very least, it certainly suggests that there’s no reason to strengthen copyright laws at this point.
The details of the report show that, as you’d expect, some companies in the space are doing quite well, while others have had a bit more trouble. That’s not a surprise. Some companies are adapting better than others. But, on the whole, the trends are pretty clear: greater revenue, greater profits. But we keep getting told that those companies need the government to step in and save them? Really?