Information goods have private costs and public benefits. Pharmaceutical research requires upfront investment from one firm, but once a certain compound is known to be effective it’s cheap for any company to produce. Writing a novel or filming a movie takes hundreds of hours of work from an author, but once the first copy is stored digitally it doesn’t cost anything to make a million more.
I think nowadays text is actually somewhat harder to copy effectively than video or audio. You tend to lose all the formatting information when the text is copied into its new environment. For example, books that are out of copyright tend to have many ways to buy it on a Kindle. But it's still worth paying a few dollars for an "official" supplier, because the other ones are often degraded in some way, with errors, or missing formatting.
For video and audio, on the other hand, all of the formatting information is canonically contained in the file. If all videos created before, say, 2004 were out of copyright, Netflix would be able to reproduce them essentially perfectly for free.
Not sure how this points to either shorter or longer terms, just a curious thing.
> This upfront investment is what copyright is made to reimburse so if it decreases, copyright shouldn’t reimburse as much.
No. Copyright exists for the effects of the works that would not have been created, not to 'reimburse upfront investments'. If that was the purpose of copyright, J. K. Rowling would have made a few hundred thousand pounds (the cost of a UK woman living at welfare level for a decade or two) and that would be it. And if that was the purpose of copyright, authors would not need to receive royalties at all nor control the rights; did no one buy it? That's fine, the point was to reimburse you and you get a check for whatever receipts you held onto while writing. There, you've been reimbursed for your upfront costs: Mission Accomplished?
Obviously, neither of those is the case nor should they be the case. The upfront investment has little to do with the optimal regime, and so rises or falls in it do not affect copyright much. It has to do with the tradeoff between the deadweight loss of no one but the author being able to use a work, the value of the counterfactual works to a global public (including the compound long-term returns), and the elasticity of creator response to stronger/weaker copyrights.
1 Assume we have a dial that can adjust copyright from 1 year to 100 years. What are the tradeoffs? One year has dead weight loss from underinvestment. Be explicit about the dead weight loss from 100 years - and discount that loss to the present day.
2. Expand on the comparison with drugs. Developing and testing and getting FDA approval on a drug is the same order of magnitude of investment as a Marvel movie, and marginal cost in both cases almost trivial. I personally benefit from cheap generic drugs after 17 years, but maybe it should be longer to encourage investment.
I think nowadays text is actually somewhat harder to copy effectively than video or audio. You tend to lose all the formatting information when the text is copied into its new environment. For example, books that are out of copyright tend to have many ways to buy it on a Kindle. But it's still worth paying a few dollars for an "official" supplier, because the other ones are often degraded in some way, with errors, or missing formatting.
For video and audio, on the other hand, all of the formatting information is canonically contained in the file. If all videos created before, say, 2004 were out of copyright, Netflix would be able to reproduce them essentially perfectly for free.
Not sure how this points to either shorter or longer terms, just a curious thing.
In your opinion, would it make sense to impose a Harberger tax on copyrighted/patented works to make them more "liquid?"
This is something I have mulled for a while, it would reduce the incentive to squat on IP for the full duration of validity.
> This upfront investment is what copyright is made to reimburse so if it decreases, copyright shouldn’t reimburse as much.
No. Copyright exists for the effects of the works that would not have been created, not to 'reimburse upfront investments'. If that was the purpose of copyright, J. K. Rowling would have made a few hundred thousand pounds (the cost of a UK woman living at welfare level for a decade or two) and that would be it. And if that was the purpose of copyright, authors would not need to receive royalties at all nor control the rights; did no one buy it? That's fine, the point was to reimburse you and you get a check for whatever receipts you held onto while writing. There, you've been reimbursed for your upfront costs: Mission Accomplished?
Obviously, neither of those is the case nor should they be the case. The upfront investment has little to do with the optimal regime, and so rises or falls in it do not affect copyright much. It has to do with the tradeoff between the deadweight loss of no one but the author being able to use a work, the value of the counterfactual works to a global public (including the compound long-term returns), and the elasticity of creator response to stronger/weaker copyrights.
Two thoughts:
1 Assume we have a dial that can adjust copyright from 1 year to 100 years. What are the tradeoffs? One year has dead weight loss from underinvestment. Be explicit about the dead weight loss from 100 years - and discount that loss to the present day.
2. Expand on the comparison with drugs. Developing and testing and getting FDA approval on a drug is the same order of magnitude of investment as a Marvel movie, and marginal cost in both cases almost trivial. I personally benefit from cheap generic drugs after 17 years, but maybe it should be longer to encourage investment.