The "One-Hit-Wonder" Rule of Copyright Compensation

From a podcast listener named Ed Morgan, in response to our recent episode called “Who Owns the Words That Come Out of Your Mouth?”:

While listening to your podcast on British copyright laws I was thinking you missed an important point. If you want to keep content providers producing, you can’t pay them too much. It’s what I call the “one-hit-wonder” rule. If a single piece of copyrighted work is so popular that fair compensation to the creator eliminates the incentive for the copyright owner to ever produce anything else. The same could apply to the creator’s heirs. Would Churchill’s descendants produce new and more content if they were not getting paid for the work their ancestor did?

I think Ed’s observation is more relevant for the heirs than the creator him/herself. Thoughts?


Mike

1) I highly doubt musicians are going into it for the money. It's silly to apply an economic calculus to something that someone enjoys doing. The fact that "starving artist" is a common term is proof enough that people aren't making music because it's a ticket to riches.

2) Some might argue that encouraging one-hit wonders to stop at one song is good for music. Do we really need another Tommy Tutone?

Adam W

1) I think of the music industry like the lottery. Most people will not win, but it doesn't stop people from playing thinking they will be the one that makes it big. (Same applies to acting and professional sports). This isn't to say that there aren't "true" artists out there who make art for the sake of art, but more than a few are in it for the chance of making it big.

2) It's a supply and demand thing. He supplied it, and others demanded it. We may not like it, but someone obviously did.

Nylund

It reminds me of a scene in the documentary made by the heir to the Johnson and Johnson fortune. There's a big wealth management seminar and one of the selling points the financial advisers keep harping on is how to manage these family fortunes so that they can last 5 or 6 generations.

It is indeed applicable to copyright, but it's more about wealth accumulation in general. It's entirely possible for certain people to live off the interest and dividends from investments stemming from the hard work of a great-grandparent they never even met. When you're born knowing you never have to work, that your parents never had to work, and that your children will never have to work, what effect does that have on a person, their family, etc?

Gary

My wife is a financial planner. When she works with people who have inherited a lot of money from an early age, many of them want to be productive in some way, but admit to quitting things when they become the least bit challenging.

Alan T

Yes, and this observation is also an argument for higher taxes, particularly higher estate taxes. While lower taxes increase the incentive to work, lower taxes also lead to greater wealth, which decreases the incentive to work.

marfita

Witnesseth J. K. Rowling

James

I'll see your Rowling, and raise you a Terry Pratchett :-)

johngalt47

Suppose Joe Kennedy had not been allowed to pass on his wealth to his heirs. Think how many fewer politicians we would have today.

Also note that these heirs are not cpmpeting in the job market, allowing others to work that need to because of insufficiently productive antecedents.

Geoff Cowper

This question reminds me of Isaac Asimov's answer to what he would do if he was told he had a brief period of time to live: "Type faster" was his answer. The incentives operating on this type of individual was rarely exclusively, or even chiefly, economic.

Mike B

If artists are not motivated by money then that is another argument against strong copyrights as they should exist to promote the useful arts. Providing incentives for work that would be produced anyway is inefficient and steals from the public good. Remember the 18th century concept of copyright is that art and ideas belong to humanity as a whole, but that limited monopolies would be granted to encourage its production. Today that has morphed into the idea that people can "own" ideas and art.

Seth

"If a single piece of copyrighted work is so popular that fair compensation to the creator eliminates the incentive for the copyright owner to ever produce anything else."

...and I suppose after Goldman & Sachs made their first big million-dollar trade, it removed the incentive for them to make more money. And I suppose after Derek Jeter's first million dollar contract it removed the incentive for him to sign a new on when it expired, and continue playing baseball. And I suppose After "Born To Run" Bruce Springsteen didn't feel the incentive to write any more music, nor did Pink Floyd after "Dark Side Of The Moon" etc, etc. Max Martin had no incentive to write any more songs after "Hit Me Baby (One More Time)" I guess. And Kim Dotcom has no urge to make any new websites after Megaupload - hahahahaha.

The very thought is so laughable it isn't even worth discussion, to be honest.

Contrarian

Apparently you have never heard of J. D. Salinger?

Phil

Here a relevant and interesting video of Milton Friedman about the incentives to accumulate wealth for your heirs. In particular, when you get older the incentives to leave something for your kids and wife grow and get quite substantial (for many people, not all). https://www.youtube.com/watch?v=MRpEV2tmYz4

Another interesting argument supporting your point stems from psychological scholars. Intrinsic motivation can be crowded out by extrinsic rewards. Assume a kid loves to shovel snow. One day you pay the kid $10 to do it. Suddenly, the kid might perceive the shovelling as work and refuses to shovel without money. Intrinsic motivation was crowded out by external rewards.

Finally, one argument that doesn't come across often in the copyright/piracy debate: Assume you create a create piece of art (you are highly intrinsically motivated). But who informs the public about your work and who installs a convenient way to access your art (e.g. music distribution channel)? In other words, creating art is only the first step and without intermediaries promoting and marketing art, steps that cannot derive utility from the "art-for-art-sake-argument, society would lack art supply.

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Sly Reference

I think the people who are looking at this as just in the music field are missing the point of the metaphor. It's about getting paid enough to stop working, no matter what field it is. In the music field , though, there's a web reviewer called Todd in the Shadows who has started a series of reviews of One Hit Wonder bands to see if there was more to the bands than just the one song. Many of the bands wanted a second hit so badly that they "sold out," trying to recapture the lightning of the first song in the proverbial bottle, often by tightly imitating their first hit. Sometimes it isn't about giving up songwriting as much as it is about giving up your individual vision.

I think Seth is also looking at it the wrong way; the OP was the beginning of a conversation that he's trying to shut down, when we should tease out some of the implicit meaning. Stephen's right when he says the bigger question is about the heirs. The original creator often had their "hits" after working in their field for a while, and have built their lives in that field. They're not going to give up their dream. However the people who gain the financial benefits from their work don't have the same commitment. Look at all the children of stars who tried to but failed to succeed in their parent's field.

There are also companies like Disney that gain a lot of revenue by maintaining control of successful products. I wonder how much of a financial hit they would take if the copyrights to material released more than 30 years ago were taken away from them? They obviously would still have an income, but it certainly would have an effect. One might wonder if letting people/groups hang onto copyrights in near perpetuity is suppressing a certain amount of creativity from the people/groups that receive the benefits from past successes.

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Jon

What if we had a "property tax" on copyrights and patents -- 0% for the first X years and then growing with time? Renounce the exclusive right and be freed from the tax whenever you think it worthwhile.