Copyright law has two main economic justifications. One is familiar—the idea that copyright promotes the production of creative work by ensuring that creators, and not copyists, gain the value of their creations. Yet production is not enough, since works also need to be distributed over time. And here lays the second main justification: copyright’s power does not end at the moment of creation, but instead provides a continuing incentive for creators (or their financial backers) to distribute and market works. Absent that incentive, creative works will not be readily available to the public.
In a fascinating new paper (available on SSRN) by Paul Heald analyzes this second claim. Here is a snippet from the introduction. We’ve bolded the most striking part of the study:
Influential copyright lobbyists presently circle the globe advocating ever longer terms of copyright protection based on this under-exploitation hypothesis–that bad things happen when a copyright expires, the work loses its owner, and it falls into the public domain. By analyzing present distribution patterns of books and music, this article tests the assumption that works will be under-exploited unless they are owned and therefore questions the validity of arguments in favor of copyright term extension…
[Our research] collects data from a random selection of new editions for sale on www.amazon.com (“Amazon”) and music found on new movie DVD’s for sale on Amazon. By examining what is for sale “on the shelf,” the analysis of this data reveals a striking finding that directly contradicts the under-exploitation theory of copyright: Copyright correlates significantly with the disappearance of works rather than with their availability. Shortly after works are created and proprietized, they tend to disappear from public view only to reappear in significantly increased numbers when they fall into the public domain and lose their owners. For example, more than twice as many new books originally published in the 1890’s are for sale by Amazon than books from the 1950’s, despite the fact that many fewer books were published in the 1890’s.
For the average consumer, 19th century books are far easier to acquire than 20th century books. That’s compelling evidence against the claim that long copyright terms are necessary to ensure adequate distribution; in fact, Heald argues the opposite is true.
Heald’s findings speak to a disconnect between politics and economics in copyright law. There are clearly some 20th century works that are quite old (think Mickey Mouse), that have enduring commercial value, and for which their owners (think Disney) carefully study how best to exploit them in a 21st century market. But for the typical older work, no one is paying any attention because demand for the work in the market is low. Books from the 1940s, for instance, are very often out of print and while they may be available in some libraries and in the occasional well-stocked used book store; you or I would have a very hard time tracking one down for purchase.
An economically-rational copyright policy would balance these sorts of works against the very rare works that maintain high demand over long periods of time. Instead, our copyright policy in Congress is driven by the interests of copyright owners such as Disney, for whom longer terms are better and the best copyright term (for their own works, at least) is infinite. At their behest, copyright terms have grown longer and longer—now life of the author plus 70 years. Yet, as Heald suggests, availability to consumers has diminished.
Changing this dynamic is going to be hard. But what makes Heald’s study notable is that adds to the body of evidence suggesting that our intuitions about copyright—that it is essential for both creation and distribution—may have surprisingly weak empirical foundations. Whether this will change anything in Congress is another matter entirely. As one friend who worked in the Obama administration once said, “in Washington, logic is for losers.”