Absence of copyright has its own economic value, social benefits

April 14, 2015 by Phil Ciciora, University of Illinois at Urbana-Champaign
New research co-written by Paul Heald, the Richard W. and Marie L. Corman Research Professor of Law at Illinois, explores the cost of excessive copyright law and the value of the public domain. Credit: College of Law

A new study co-written by a University of Illinois expert in intellectual property law demonstrates that the value of creative works in the public domain such as books, images and music can be estimated at least as precisely as the value of commercially available copyrighted works.

The implications of the study for both term extension and orphan works legislation are substantial, says law professor Paul Heald.

"Copyright owners frequently talk about the private value of copyrights, which isn't difficult to see: If you have a monopoly on something, you get to make a lot more money," said Heald, the Richard W. and Marie L. Corman Research Professor of Law at Illinois. "What they conveniently ignore is that the absence of copyright creates value, and that creative industries rely on works as building blocks for many valuable new creations."

The paper, co-written by Kristofer Erickson and Martin Kretschmer, both of the University of Glasgow, is one of the first attempts to quantify in monetary terms a portion of the public domain.

"Calculating the entire value of all public domain works would be overly ambitious, so we attempted to calculate the value of a small slice of it," Heald said.

To put a monetary value on how much creative works in the public domain contribute to the creation of new works, the authors used Wikipedia pages as an example of new authors creating new works that rely on the public domain in the authorship process.

"We studied the biographical Wikipedia pages of a large data set of authors, composers and lyricists to determine whether the public domain status of available images leads to a higher rate of inclusion of illustrated supplementary material, and whether such inclusion increased visits to individual pages," Heald said.

The authors found that the most historically remote subjects were more likely to have images on their Wikipedia pages, most likely because their lives predate the existence of in-copyright imagery. They also discovered that the vast majority of photos and illustrations used on subject pages were obtained from the public domain.

By estimating their value in terms of costs saved to Wikipedia page builders and increased traffic corresponding to the inclusion of an image, and then extrapolating from a random sample to a further 300 Wikipedia pages, the paper concludes that the total value of public domain photographs on Wikipedia is between $246 million to $270 million per year.

"That really highlights the cost of excessive ," Heald said. "As we show in the paper, it's not just a net win for everybody when we extend copyright. There are clear, measurable and palpable losses. And we believe that the empirical example we provide can demonstrate to policymakers how the absence of copyright can add economic value to a discrete set of works."

Even though the estimates make use of several proxies, the implications are considerable and significant, according to Heald.

"As long as lobbyists for copyright expansionists assert that royalty checks going to private owners is a proper measure of public welfare, then policymakers will need to be confronted with dollar figures on the monetary value of the public domain," Heald said. "There's no reason why the public should want to see income streams created through copyright law continue. It increases the private wealth of individual and corporations, but outside of that it's nothing but a drag on consumer surplus and social welfare. As long as the copyright term is long enough to stimulate the creation of the work in the first place, then society actually has no interest in seeing copyright law enforced at all."

According to Heald, the most convincing policy implications of the paper concern photographs.

"We show that photographs have significant value in the Wikipedia context, and that photographs pose a particular problem that other copyrighted works don't," he said. "And that's because it's very difficult to find out who owns a photograph."

Photographs from magazines or newspapers from the 1940s, 1950s, 1960s or 1970s could still be protected by copyright – if they were properly registered and published with the proper notice, Heald said.

"But you can't easily find out if a copyright was renewed or registered properly in the first place, or who owns it, because there's no easily searchable database at the copyright office," he said. "Chances are, many if not most of the photos from that period are in the public domain and could be used for free, but there's no system for people to make that determination with any confidence."

The study also provides a strong justification for the enactment of orphan works legislation that has languished in Congress for years.

"Orphan works are creations that are technically protected by copyright, but their owners are unknown or can't be found," Heald said. "That type of legislation was proposed by the Library of Congress a couple of years ago. Then the economic crisis hit, and it got buried. But I think our paper provides a nice argument for resurrecting it. It doesn't strip copyright; essentially, you get a compulsory license to use the photograph and have to pay fair market value for it if the owner steps forward. So it doesn't hurt copyright owners because they get a fee, and it would really be a boon to those who find a photograph they want to use and, in good faith, try to track down the its rightful owner. It's really a win-win situation."

Explore further: A healthy public domain generates millions in economic value—not bad for 'free'

More information: "The Valuation of Unprotected Works: A Case Study of Public Domain Photographs on Wikipedia": papers.ssrn.com/sol3/papers.cf … ?abstract_id=2560572

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Eikka
3 / 5 (4) Apr 14, 2015
As long as the copyright term is long enough to stimulate the creation of the work in the first place, then society actually has no interest in seeing copyright law enforced at all.


What he's talking about here is the fact that creators want profits. The longer the term, the more they may profit, so essentially the question about the length of copyright terms is about negotiating over how much profit one should have from creative works.

The problem is that copyright is a poor mediator because it doesn't guarantee profits, nor does it ensure that some particular creative work doesn't get paid a million times over its worth because each paying customer is unaware of how much everyone else is paying.

The public has no interest in wasting money on over-rewarding some works while others, potentially more valuable works go undercompensated - yet this is invariably what happens with copyright.

Rarely does the value and the price of copyrighted works meet.
Eikka
3.4 / 5 (5) Apr 14, 2015
With copyright we have created this fiction that intellectual property rights as they are, are the only means by which a creative author can get compensated for their work.

In reality, it only benefits the people who own the publishing channels - radio, television, internet streaming services, movies, news, venues, advertizing - who choose what content the public sees and hears, and thereby choose what sells. You won't buy what you don't know exists.

Naturally, they choose to show and sell what they own the copyright to, refuse to show what they don't own rights to - actually, they'd have to pay to - and so the actual authors of the works get shafted. As a consequence, the public ends up paying this layer of middle men several times the worth of what they're selling - which is several times what they paid the actual authors for the rights.
Eikka
2.8 / 5 (4) Apr 14, 2015
So the argument that copyright is the only means to secure the creation of new works is really a circular one.

Copyright is only necessary because of copyright - because by copyright it becomes necessary to sell your works through these privately owned and controlled publishing channels and media, which refuse to publish and sell your work unless you copyright it and grant them exclusive license if not the copyright itself.

In the absence of copyrights, publishing channels and media would all have access to the same pool of creative content, so they couldn't discriminate against works based on who owns them. They'd publish whatever is good, instead of what is cheap.

That in turn enables authors who are good to secure publicity and an audience, and thereby secure an income by simply asking for the money up front before they create anything.
Intuition
4 / 5 (3) Apr 14, 2015
Perhaps this author should ask a musician or a visual artist what a copyright means to them and of its value if it is enforced. Removing copyright protection will inhibit the creation of original works. It's as if he thinks works of art are easily made and that just anybody can make them. Ask artists and ask businesses how they feel about the Chinese ripping off their products and selling them at cut-rate prices. What this article is suggesting is that we as a society reward thieves because they make money by stealing others' valuable work. That's absurd! To even imply that work shown to the public somehow belongs to the public even if the creator is unknown is morally bankrupt and tyrannical. Hmmn, the house down the street is nice looking. I don't know who owns it but I think it should belong to everybody. What kind of sense does that make?
Eikka
1 / 5 (1) Apr 14, 2015
The most perverse thing about copyright is the rights organizations and licensing.

Any public establishment is legally required to obtain a performing rights license in order to play music to the public. Artists sign up with various rights organizations, who issue blanket fees onto the establishments, and the money gets distributed to the artists according to however the rights organizations decide - keeping however much they desire. They are basically private companies that represent their members.

So if you set yourself up on a street corner and start to play a guitar, you need to pay BMI and ASCAP for the permission, who then distribute the money largely to themselves. Even if you play your own music, you pay, and if you are a member you may get a fraction of a cent back. If you don't and they catch you, they can sue you for the money.

Even for a club that plays only Public Domain music - still got to pay

http://entertainm...ing3.htm
Eikka
1 / 5 (2) Apr 14, 2015
To even imply that work shown to the public somehow belongs to the public even if the creator is unknown is morally bankrupt and tyrannical.


Why? The author who made it gave it away by showing it to everybody, unless it was literally beaten out of him.

Generally speaking, you should take the money first and then sing the song, or at least agree to get paid before performing it. Doing it the other way around is just dumb, and actually morally corrupt if you try to force other people to pay for stuff they didn't ask for.

Hmmn, the house down the street is nice looking. I don't know who owns it but I think it should belong to everybody. What kind of sense does that make?


Apples to oranges. A house can have an owner because it's a real physical thing - claiming that a bunch of information has an owner is patently absurd. It's like patenting the number Pi.

Intuition
5 / 5 (1) Apr 14, 2015
To even imply that work shown to the public somehow belongs to the public even if the creator is unknown is morally bankrupt and tyrannical.


Why? The author who made it gave it away by showing it to everybody, unless it was literally beaten out of him.

Generally speaking, you should take the money first and then sing the song, or at least agree to get paid before performing it. Doing it the other way around is just dumb, and actually morally corrupt if you try to force other people to pay for stuff they didn't ask for.



GAVE IT AWAY! By trying to sell it or showing others your work? Imagine being an artist and putting your work on the web to sell or show—that to you is giving it away? Should you be able to make a print of somebody else's work for nothing? Or a recording of a song for nothing? Or even use the digital version on the web? It is a real thing. You didn't create it! Just because it's on the web does not mean it's everybody's.
Intuition
5 / 5 (1) Apr 14, 2015
Hmmn, the house down the street is nice looking. I don't know who owns it but I think it should belong to everybody. What kind of sense does that make?
Apples to oranges. A house can have an owner because it's a real physical thing - claiming that a bunch of information has an owner is patently absurd. It's like patenting the number Pi.



An image of a painting is pixels with which a print can be made from and the same is true of music . . . a recording can be made from that or music can be heard digitally. These are real things, not random bits of data. Why would you want them otherwise? If it's not real then why will the government (or society) not let you take a picture of and print out the dollar bill in your pocket? Because it would be detrimental to the value of the original among other things!
ab3a
4.5 / 5 (2) Apr 14, 2015
I am entirely in favor of copyrights. Authors and artists should be rewarded for their work. Sometimes that hard work can take years to be discovered and accepted.

Nevertheless, copyrights would be respected if they were more reasonable. The question is what a reasonable copyright period should be. Copyright terms have been extended beyond what many consider a reasonable length of time, mostly thanks to the Disney Corporation and the late Representative Sonny Bono who spearheaded the last round of copyright term extensions.

The problem is defining a countervailing value to the absence of copyright. If there were a value estimate, then legislators and the public could make a value judgement as to how long a copyright should last. If we can agree that this valuation method is realistic, then it would lead to a much more equitable situation.
Eikka
1 / 5 (1) Apr 17, 2015
The question is what a reasonable copyright period should be.


None, because copyright isn't a reasonable means to reward authors and artists for their work. It's mostly just abused.

These are real things, not random bits of data. Why would you want them otherwise?


Wanting something doesn't make it a real physical thing. I want happiness, I can even buy happiness, does that mean someone can own happiness?

If it's not real then why will the government (or society) not let you take a picture of and print out the dollar bill in your pocket? Because it would be detrimental to the value of the original among other things!


That has nothing to do with copying the image of a dollar, and everything to do with frauding someone else with money you don't actually have.

It is actually legal to reproduce the dollar bill, as long as it's not of the correct size. It has nothing to do with copyright - the image is public domain afaik.

antialias_physorg
not rated yet Apr 17, 2015
Authors and artists should be rewarded for their work. Sometimes that hard work can take years to be discovered and accepted.

So how about we'll all pay into a pool of "author and artist renumeration" (i.e. a flat 'culture tax')..and then authors and artists get an appropriate share based on the amount of use of their work each year for the past year.
That way they could make their work openly available immediately and we could do away with copyright.

I've had numerous occasions when a project of mine (private - and even some professional ones) benefitted hugely from some piece of code somone just put online for the heck of it (under CPOL or similar). In some cases the project would not have been completed if it hadn't been for that.
Eikka
1 / 5 (1) Apr 17, 2015
The problem is defining a countervailing value to the absence of copyright.


The countervailing value of the absence of copyrights would be, naively speaking, that you'd pay about 10% for all the art and media you consume since we wouldn't have a massive industry based solely on extracting money out of the public through the copyright system.

That's simply because the publishers and media channels take such a big cut of all the money in the chain of getting content from the authors to you.

This expense is justified by the need to advertise and promote works of art and artists, which wouldn't be necessary if everyone could just freely show whatever they want without paying anyone. The good stuff would automatically promote itself, and things like making movies and tv series wouldn't cost tens of millions due to royalties and licenses for playing.

Eikka
1 / 5 (1) Apr 17, 2015
So how about we'll all pay into a pool of "author and artist renumeration" (i.e. a flat 'culture tax')..and then authors and artists get an appropriate share based on the amount of use of their work each year for the past year.
That way they could make their work openly available immediately and we could do away with copyright.


We, and I suppoose you too, are already doing that. In the US, the Copyright Office collects royalties off of digital media and distributes it to the rights organizations, which are then supposed to distribute them to their member artists.

Problem being that most of that money dissapears along the way into "administrative costs" and running lawsuits against copyright infringements.

The conceptual problem of a culture tax is that there's no good way to determine what the tax should be - what proportion of the GDP should we devote to culture? And how to prevent abuse?
Eikka
1 / 5 (1) Apr 17, 2015
And all those rights organizations are a horrible bureaucratic mess anyhow. Running the paperwork, registering members, collecting fees, distributing payments, tracking who plays or shows what and where, how much, to how many people... is just a massive and totally unnecessary waste of time and money.

Our society is spending huge effort into ensuring that a few media moguls get richer and richer, and we're wondering why the economy is going down the drain?

antialias_physorg
not rated yet Apr 17, 2015
what proportion of the GDP should we devote to culture? And how to prevent abuse?

We seem to be able to put a percentage on what we should spend on weapons or science (neither of which has a defeinite cost-benefit analysis to back up that amount. The former much less than the latter).
I see no reason why we should not be able to put a similar 'value' on artistic endeavours. Pumping that money through a regulated and non-profit oriented administration (with the reelevant losses along that buraeucracies seem to be unable to prevent) can't be worse - from the artists' POV - than going through completely opaque systems like RIAA.
Eikka
not rated yet May 26, 2015
I see no reason why we should not be able to put a similar 'value' on artistic endeavours.


Please, do establish what is the concrete value of the Mona Lisa.

National safety, or even the ability to invade another country, or new discoveries of science have concrete value. Art doesn't - unless you treat art purely as public entertainment, in which case you should value Go-karting more than classical music because more people enjoy it.

The question of funding art by tax is, whether it's justifiable to spend public resources to fund a video game or a hollywood movie rather than helping the poor and homeless. Pointing to a hypocricy in other tax spending doesn't solve the dilemma.

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