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:
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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.
Amazon has just released its third annual list of the Most Well-Read Cities of America — a ranking based on per-capita “sales data of all book, magazine and newspaper sales in both print and Kindle format.” Here are the top 5:
1. Alexandria, Va.
2. Knoxville, Tenn.
3. Miami, Fla.
1. Do customs and postal service discriminate against “atheist” parcels?
2. Now there are wristbands to monitor whether doctors are washing their hands. (HT: R.E. Riker)
3. Dan Ariely is offering a free online course: “A Beginner’s Guide to Irrational Behavior.” Sign up here.
4. Dan Pallotta argues that non-profits should be run like real companies.
5. A new study of English literature finds that the use of mood words is steadily decreasing.
Arbitrage is defined as taking advantage of price differences between two markets. A few years ago Supap Kirtsaeng, a math major at Cornell, found that his textbooks could be purchased more cheaply in his native Thailand than in Ithaca, so he asked friends to buy the books there and ship them to him. He started selling them on eBay and soon cleared almost $40,000. Eventually a major textbook publisher, John Wiley & Sons, got wind of Kirtsaeng’s business and filed a copyright lawsuit.
That the suit involved copyright may seem odd, since Kirtsaeng wasn’t copying anything. He was just re-selling items that he’d already paid for — a time-honored way to make money in almost any economy.
But because the items were books, some special rules applied. The textbooks were foreign editions (i.e., printed abroad), and Wiley had inserted the following language into the title pages: “This book is authorized for sale in Europe, Asia, Africa, and the Middle East only and may be not exported out of these territories. Exportation from or importation of this book to another region without the Publisher’s authorization is illegal and is a violation of the Publisher’s rights.” Wiley argued that by importing the books Kirtsaeng was violating the copyright owner’s exclusive right under the U.S. Copyright Act to authorize distribution. Read More »
I admire both of these books, and their authors, and even their covers. Read More »
The next battle in the Google Books dispute comes in a week, when lawyers on both sides meet to consider their next move after a federal judge rejected a settlement proposal. Should Congress step in? Read More »
… today’s Wall Street Journal:
Once upon a time, Americans got dogs for their sheep. Now they get sheep for their dogs. “I never dreamed it would go this far,” says Ms. Foster, 56 years old. Read More »
… Economic Lives: How Culture Shapes the Economy, by Viviana A. Zelizer, an economic sociologist at Princeton: Suppose for a moment that this is the year 2096. Let’s take a look at American families: although by now money often takes postelectronic forms unfamiliar to the twentieth century, in the “traditional” home, “housewives” and “househusbands” receive monthly stipulated sums of money as salaries from their wage-earning spouses. Read More »