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, 25 Apr 2013 @ 3:24pm

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

    You're making an awfully specious argument: it's not okay to steal my diary, but it is okay to steal the information on my diary. I don't agree, and you're not going to come up with an argument that will convince me that it's ethical to copy my personal papers or my confidential business documents.

    Personal property law deals with the diary as a physical object, made out of paper. Copyright law deals with the diary as a creative work, which may be fixed into not just the particular physical object you originally wrote in, but also in many other objects. For example, Anne Frank only wrote the one diary, but there are many copies of it now.

    As for ethical, I never weighed in on that one way or the other. Copyright law (and property law) are both utilitarian bodies of law, without a moral component. Copying a work against the author's wishes is neither ethical nor unethical.

    And it's interesting that the private papers are now business papers. They weren't before.

    It grants rights and restrictions to the creator and the consumer of content.

    What restrictions does copyright place on an author that he would not suffer from if he immediately placed the work into the public domain upon fixation? What is he now obligated to do or not do that he was not obligated to do or not do otherwise? I'm genuinely curious about this.

    AFAIK copyright grants no rights to anyone to do anything that they couldn't already do, places no limits on the author that he is obligated to accept. Basically all it does is restrict the public from doing things that it could do but for copyright, all else being equal, and gives the author the option as to whether to lift or enforce those restrictions at his whim. Oh, he may have to jump through the odd hoop or two to back up his commands, but no one ever forced him to exercise the copyright in the first place.

    It also LIMITS the rights a creator has in regards to his content: things like parody, news reporting, or classroom use are rights that are explicitly granted by Copyright.

    No they're not. If a work was not copyrighted, parodists could parody, news reporters could report, and teachers could engage in classroom use. Nothing is granted to them by copyright law. Hell, those aren't even solid fair uses -- just the other day I mentioned Harper & Row v. The Nation, in which news reporting was infringing and not fair use. Fair use depends on the circumstances, there are no canonical uses that are always fair.

    Now look at industrial espionage regulations: it is illegal to steal trade secrets from a business, for example. What does that have to do with Copyright? Absolutely nothing.

    If you can maintain a trade secret (which many works won't qualify for, at all) then kudos to you. But that still shouldn't dictate our copyright policy, nor should it be mistaken as a substitute for copyright. As Dastar made clear, there is no substitute for copyright. Trade secrets may provide a cause of action against the first pirate, maybe, but it will rapidly fizzle out if you try to apply it to the rest of the world, which is what copyright is for.

    In my opinion, a trade secret and an unfinished manuscript are both in the same category: none of the public's business.

    Except that, of course, the public need not listen to you. It's common to impose regulations on businesses that compel disclosure of trade secrets in actual use. And in some areas, this needs to be pushed further.

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