The Agenda

NRO’s domestic-policy blog, by Reihan Salam.

How Should We Interpret the Expansion of Copyright Protection?


Cory Doctorow has a post highlighting new findings from Joel Waldfogel of the University of Minnesota and Brett Danaher of Wellesley College:

Economics researchers at Wellesley College and U Minnesota have published a study showing that feature films’ US box office returns are not correlated to BitTorrent sharing. They also show that shorter delays between the US exhibition and overseas releases result in less file-sharing — that is, people outside the US download movies because they can’t buy tickets to them.

And then Doctorow adds the following observation:

“Anti-piracy” efforts are often painted as life-or-death struggles for the studios. But in the case of international windows, this is about profit maximization, not survival. If the studios can outsource the titanic expense of policing copyrights in delayed-release nations to the countries themselves, they can wring a few more points of profit by delaying release to an otherwise optimum moment. But considered as a societal problem, it makes no sense to spend a million euros on copyright enforcement just so Disney can save a few thousand euros on the cost of making new 35mm prints.

One is reminded of a discussion we had in the fall of 2010 about firefighting. In a number of areas, e.g., areas exposed to frequent wildfires, large, sprawling homes purchase an additional layer of fire protection beyond that provided by local authorities from insurers. Some consider the purchase of an additional layer of private fire protection an offense against civic equality. But another way of looking at it is that building a large, sprawling, hard-to-defend property is the responsibility of the individual in question — I shouldn’t have to subsidize this kind of decision. Matthew Kahn touched on this idea in the context of flood insurance:

In 1993, a major flood in Missouri, where the Mississippi, Illinois, and Missouri rivers meet, caused roughly $15 billion of damage and fifty deaths. Tens of thousands of people were evacuated. At least 10,000 homes were totally destroyed, and hundreds of towns were hit hard, with at least seventy-five towns completely under flood waters. And yet today, more than $2.2 billion worth of new development in the St. Louis area stands on land that was under water during the 1993 flood. Between 1993 and 2003, offices, shopping centers, and highways covered at least 4,200 acres of Missouri flood plain, most of which were under water during the 1993 flood. Why so much development? The federal government, both through disaster relief and by providing flood insurance, has reduced risk to the point where developers felt comfortable building in a zone that is really unsafe. The building boom did bring jobs, services, and tax revenue to the region, but it could lead to more damage in future floods. Encouraging development in a flood plain is risky—but that’s exactly what the federal government’s well-intentioned actions did. And climate change will make it even riskier. …

Right now, government policy is allowing businesses in the St. Louis region to flip a one-sided coin. If no flood occurs, then the investment in developing in the flood zone was a wise move. If a disaster does take place, the region’s congressional representatives and senators will claim that their constituents are the victims of horrible luck, are suffering, and need federal disaster money.

One could argue that Big Media is, in a similar vein, flipping a one-sided coin. We have known for some time that copying digital media is easier than it had been in the past. This has not prevented the entertainment industry from flourishing. It has, however, put pressure on profit margins. As distribution costs have plummeted, there are new entrants that are willing to translate those savings into much lower prices for consumers, thus broadening access to media. Incumbent record labels and movie studios have been well aware of these trends for decades. But instead of accepting that prices and thus profit margins will have to come down, and instead of hiring their own firefighters to protect their large, sprawling, wildfire-prone estates, they are trying to get you, i.e., the taxpayer, to pay to protect their old business model.

I happen to reject what I take to be the social-democratic view — that private firefighting and security are terrible — because I think that while people should be allowed to engage in risky behavior, they should be willing to bear the risk in question. This isn’t to say that we should disband all public firefighting and police services. Far from it. But if you’re transporting huge amounts of cash to bank branches, you should buy insurance and an armored truck.  

(And as Nina Paley argues, cultural products have a number of distinctive properties that ought to shape how we think about the public interest in protecting intellectual property.) 


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