25 May 2011

A Decent Half-Measure

What would evidence-driven copyright law look like? (I won't discuss patents here, although this argument should roughly apply to patents as well as copyright.) The length should be determined by looking at earnings distributions for things like music and books, and cut the copyright protection period to only include, say, the first nine-tenths of the average distribution. Most copyrighted productions follow a power law – the bulk of their earnings from a novel or movie will usually be earned in the first couple of years (see diagram above). It’s the initial high earnings that IP should be aiming to protect, not the “long tail” that comes afterwards. This would reduce the stifling effects that copyright has, without reducing much of the innovation incentive, since most profits would still be protected.

Let’s say, for sake of argument, that 90% of all revenue earned by copyrighted material is earned within ten years of creation.  Let’s also say that, as a result, all copyright protections expire within ten years of creation date.  And let’s also say that this system is currently in place.

How would this impact, say, J. K. Rowling’s income right now?  Keep in mind that the first four books were released prior to 2001, so they would no longer be protected under copyright law.  How much income would Ms. Rowling forego as a result?

It is, of course, impossible to say.  Obviously, Ms. Rowling is still selling books.  It is likely, then, that bootleggers could cannibalize some sales, depriving Ms. Rowling of income.  However, Ms. Rowling’s publisher could compete with bootleggers on price by offering competing product and dropping the price of their books.  And Ms. Rowling could voluntarily drop the amount of royalties she received in order to make her book more competitive with bootlegged copies.

Thus, Ms. Rowling would lose out on some money.  However, the bulk of her sales have already occurred, at least in regards to books, so she wouldn’t lose that money.  Furthermore, lower costs of her books in bootleg form would spur an increase in overall sales, which might spur sales of tie-in products (keep in mind that Ms. Rowling has written a decent number of tie-in books), which would improve her bottom line. As it stands, then, it appears that while Ms. Rowling would miss out on some income, it is not likely that she would miss out on a sizeable amount of income, relatively speaking.

Therefore, the proposal to base copyright expirations on earnings distributions is quite reasonable.  A shorter duration of copyright does not appear to place a significant cost on creators, whom it is presumably designed to protect.  And a shorter copyright duration will better enable derivative works, which will only foster innovation.  Frankly, the tradeoff appears worth it.

While this will not be utopia for the anti-IP crowd, it is still an improvement on the current system and is definitely a step in the direction.  Significantly, this won’t impose major costs on creators, which should help to incentivize creation and innovation, which is the ostensible purpose of IP in the first place.  Why not take a chance on it?

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