Fixing Copyright: The Purpose Of Copyright

from the holding-the-debate dept

Since the GOP decided to chicken out on holding the very necessary debate on copyright reform, let's keep the debate going without them, and hope they join in. As we've discussed, the Republican Study Committee released a fantastic report from staffer Derek Khanna, and then retracted it under lobbyist pressure. The RSC wants to claim that the paper didn't go through its full review process, but we've heard from multiple sources that this is simply not true, and that the RSC is pushing this story to appease angry lobbyists (apparently the US Chamber of Commerce has taken over as the leader of the cause on this one, following the initial complaints from the MPAA and RIAA). Either way, all this has done is draw much more attention to the report, which you can still read here.

But, clearly, some in Congress realize this is a debate worth having. So if they're too afraid of some industry lobbyists, we might as well kick off that debate for them. We're going to do a series of posts digging into Khanna's paper. The paper, of course, starts off by debunking three commonly believed myths concerning copyright law, which are often used by policy makers to justify bad policies.

The purpose of copyright is to compensate the creator of the content: It's a common misperception that the Constitution enables our current legal regime of copyright protection -- in fact, it does not. The Constitution's clause on Copyright and patents states:

"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries" (Article I, Section 8, Clause 8)

Thus, according to the Constitution, the overriding purpose of the copyright system is to "promote the progress of science and useful arts." In today's terminology we may say that the purpose is to lead to maximum productivity and innovation.

This is exactly correct, as we've discussed numerous times before. This is not to say that one of the results of copyright law is to compensate the creator. That's clearly a large part of how the law is supposed to function. The thinking behind this is not too complicated: if we can ensure greater compensation through limiting competition and supply via artificial monopolies, it drives up the price of those goods, leading to greater income.

But that theory includes several assumptions which may not be true. Let me present a hypothetical to make the point. I am not saying this is absolutely the case, but let's say we have scenario A and scenario B:

Scenario A
Artist's works are locked up under copyright, but he sells them for $1 per song downloaded.
Fans pay for and download 100 songs.

Scenario B
Artist frees up his work to the public domain, and encourages them to be spread freely. Thousands of copies of the song are downloaded. Artist sets up a Kickstarter to fund next batch of songs, and quickly raises $10,000

Again, I'm not saying that this is what happens in all cases. I'm just making this point: I don't believe that a single, sane person would argue that scenario A is better than scenario B. In scenario B the artist has more fans, more ability to make new music and more money. It's a much better position. But that income does not rely on copyright.

And that's the simple point that seems to get lost in this debate. Because copyright exists and is so prominent in the business model of artists, many incorrectly believe that it is the business model for content creators, and there can be no other. But, what we've really done is set up a crutch. Because the government has "picked winners and losers" by backing copyright as the core piece of a business model, most content creators have focused almost exclusively on monetizing via copyright. And thus, they argue, any attempt to change copyright is an attack on their incomes.

But, if we all agree that scenario B is a better scenario for the artist and for the consumer, then we've already shown that copyright, itself, may not be the best tool for artists seeking to make a living. I'm not saying that it absolutely isn't -- but that we have little evidence that copyright is actually the best such tool, and plenty of evidence that it can stifle and limit speech and creativity along the way.

There are many ways to make revenue as an artist. The Future of Music Coalition's Artist Revenue Streams worked out 42 different revenue streams for artists. Certainly, many of them rely on copyright, but a significant number do not. But content creators rarely get the chance to fully explore those other methods, because they're so wed to the idea that copyright is it.

Either way, if the idea is to maximize artist revenue, then we should be looking at what actually does that -- what actually results in greater artist revenue? Because there is no evidence that expanding copyright law seems to have that impact.

So all Khanna and the Republican Study Committee (briefly) were saying, was that the purpose of copyright law is to benefit "the progress of science and the useful arts." Part of that certainly may be to help artists make money, but that is not the ultimate goal, nor would it be reasonable as the ultimate goal. If we want to maximize artist revenue, let's explore that issue, but just assuming that's the goal of copyright is clearly faulty, leading to a very distorted market.