Bureau Of Economic Analysis Shows Why Copyright Terms Should Be Greatly Diminished

from the half-life-of-economic-usefulness dept

We've pointed a few times in the past to a chart from William Patry's book, looking at how frequently copyright was renewed at the 28 year mark back when copyright (a) required registration and (b) required a "renewal" at 28 years to keep it another 28 years. The data is somewhat amazing:
As you can see, very few works are renewed after 28 years. Only movies, at 74% are over the 50% mark. Only 35% of music and only 7% of books tells quite a story. It makes it quite clear that even the copyright holders see almost no value in their copyrights after a short period of time. It appears that the Bureau of Economic Analysis is coming to the same conclusion from a different angle. As Matthew Yglesias notes, as part of its effort to recalibrate how it calculates GDP, the BEA is considering money spent on the creation of content an "investment" in a capital good, which needs to be depreciated over the time period in which it is valuable. Frankly, I'm not convinced this is the smartest way to account for money spent on the creation of content, but either way, the BEA's analysis provides some insight into the standard "economic life" of various pieces of content, which match up with the chart above in many ways.
The most ephemeral cultural works turn out to be musical records, which depreciate at a staggering annual rate of 26.7 percent—meaning they earn a huge share of their lifetime income in their first year of release, and only a tiny number of works have a meaningful level of back-catalog sales. Television shows come next, depreciating at a 16.8 percent rate. Then you have books at 12.1 percent. Movies turn out to be far more durable than TV, music, or books, depreciating only at a fairly low 3.8 percent rate.
While books and music flip flop from the chart above, movies seem to be the only one, in both measurements, that have a particularly long economic life. Yglesias wonders if that's also about to change for movies, especially as studios are forced to move away from windowed releases.
The reason for that, presumably, is that movie studios are quite sophisticated about selling the same product repeatedly. First in theaters, then in DVD and pay TV stations, then to cable networks, and with simultaneous rollouts happening abroad. My guess is that when the BEA looks back in five or 10 years, they're going to find that they've miscalibrated this number because the movie industry is facing substantial business-model transformation on precisely this point. The rise of on-demand entertainment options and the falling quantity of films produced in any given year is putting pressure on traditional market segmentation practices, and this number may not hold up.
I'm not sure if that's really going to be true, especially since one of the advantages of on-demand systems like Netflix is that they open up a wide back catalog to viewers. Prior to the VCR, that was non-existent, and even with the VCR, the back catalog was limited to what a video store could hold, and old products were regularly on the chopping block. So I could see how movies could still have an extended economic life.

Still, as Andy Howard noted in alerting us to this story, this actually gives us yet another tool for evaluating a more reasonable copyright term. If the Bureau of Economic Analysis is saying that the economic life of a piece of music is just a few years, after which it's basically a zero, it seems silly, pointless and counterproductive to keep that work locked up under copyright. Instead, it would make tremendous sense to move it into the public domain, where it might be useful. As we had just discussed recently, when works are in the public domain, it often inspires more creativity as people build on the original work. From an economic standpoint, all of the time between the end of the economic life of a work and when it finally goes into the public domain is simply a massive loss to society and culture.

Filed Under: copyright terms

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  1. identicon
    cpt kangarooski, 24 Apr 2013 @ 5:57pm

    Re: Re: Re: Re: Interesting, but is it still relevant?

    The problem with requiring registration is that so many works are not formal publications: for example, if I post a poem on a forum somewhere to cheer up a friend, do I need to register that with the LoC?

    Only if you want a copyright on it. Since the vast majority of posts to fora are trivial enough that the authors do not want copyrights on them if there is even the slightest hurdle placed to test their desire (e.g. A $1 registration fee and a simple form), this is no problem. Whereas granting copyrights automatically is reckless and wasteful -- vast quantities of material that could immediately enter the public domain don't.

    The person in the best position to tell us if a work should be copyrighted is the author. Registration serves many vital purposes, one of the most important of which is to let the author tell us that he wants a copyright.

    And certainly, unpublished works should be inviolate: until the day I actually publish something, it should be my property.

    Absolutely not. The purpose of copyright is not to kowtow to your miserliness, it is to cause the greatest number of works to be created and published which otherwise would not be, to enter the public domain as fully and quickly as possible.

    Unpublished works do not help the public. If the work is still in progress, or is being shopped around to different publishers, then I'd agree that we should grant some protection to allow the author to have it published as he intends, and to discourage people pirating manuscripts. But if the author just sits on it, he does not deserve a copyright; the public would be better served by the manuscript pirate in that case. There is a similar policy for patents intended to discourage inventors from sitting on inventions.

    I'd say that an automatic grant for unpublished works (where the status of being unpublished is read narrowly) is tolerable so long as the protections are fairly weak and even then only last for maybe a decade or two, tops. Authors should be strongly encouraged to publish (and register, if they like) quickly.

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