Saturday, April 12, 2008

Dissertation Proposal -- Next draft

I got a few comments, spoke with a few folks, read a little more, and turned out a second draft. But before I post it, I just have to mention this photo, showing the contents of a package I got in the mail yesterday. It was a Christmas present (and it was not late, rather, it's a gift that literally keeps giving). This is the best Christmas present I've ever gotten and it's going to the top of my list for what to give people from now on: let's you give your friends and family the power to help very deserving teachers and their students achieve their educational goals. Check it out. It's pretty neat. They give your friends tons of options to choose from. I chose a teacher who wanted to buy an iMac for her class. You donate your gift card cash value, and then you get an acknowledgment. I didn't expect what came yesterday, however. I got this great notebook full of thank you letters from the students telling me what all they had learned to do with their computer, and 3 photographs of the students and their iMac. Wow. The kids are so cute. Great gift. Thanks Google Book Search.

But now, back to the dissertation. Here's draft 2:

When you wish upon a star –
be careful what you wish for


The copyright pendulum had been swinging towards broader, stronger and longer protection for 100 years, but it may have reached a turning point in the U.S. with the measures adopted in 1998. Those protections, including, among others, a term of life of the author plus 70 years and 95 years for works published before 1978, and the anti-circumvention measures designed to insulate the content industries from the realities of frictionless and costless reproduction and distribution in the digital environment, marked the end of the long trend.

Or so the story seemed it might go, as I began to ask what the next 10 years might bring in the development of copyright law, policy and practice. I focused initially on the effects of mass digitization projects on the health of the public domain, the deterioration of library prominence in the roles of discovery and fulfillment, and the evolution of business models in the music, publishing and film industries. I saw economic themes elaborated by Schumpeter, Christensen, Goldstein, Anderson and Boyle, among others, interwoven throughout.

While the surface story appears to be one of increasing access to and usefulness of the kinds of media that once were made artificially scarce (the purpose of copyright’s allocation of the exclusive right to copy to the copyright owner) to provide opportunities to creators to recover their investments, the deeper story is one of ever more adroit exploitation and control by copyright owners. On the surface, it appeared that if content industries (content or content industries defined herein collectively as the products and producers of the publishing, music, movie, theater, dance, two- and three-dimensional art, photography, gaming [and whatever other industries I’m leaving out] industries), and individual creators reduce reliance on copyright to exclude others from copying and distributing their works in digital forms, that is, if relatively free access to and use of such digital content becomes a normal public experience, there may not be much hew and cry in nine years when U.S. media conglomerates push for another 20 year extension to the term of copyright. More pointedly, if there were some downside of an apparent access and use utopia, proponents of the public domain would have those nine years to figure it out and be prepared with appropriate counterarguments. The counterarguments might go so far as completely rejecting any continuing need for copyright in a world where creators did not rely on exclusion to recover their investments, but even if that argument were unlikely to succeed, the full range of arguments against term extension in a milieu of much freer access to and use of others’ works in digital form warrants exploration.

As I examined the possibilities more closely, free access to digital copies only seemed like giving up control. In truth, copyright industries can potentially assert control in more subtle and nuanced ways, and in ways that could be more constraining (as I’ll describe below) than the statutory framework we have now. Jack Valenti may get his (conjectured) wish after all, if posthumously:

"So the effort [by the MPAA] to block something like the Eldred Act is not really about protecting their [motion picture industry] content. The effort to block the Eldred Act is an effort to assure that nothing more passes into the public domain. It is another step to assure that the public domain will never compete, that there will be no use of content that is not commercially controlled, and that there will be no commercial use of content that doesn’t require their permission first. The opposition to the Eldred Act reveals how extreme the other side is. The most powerful and sexy and well loved of lobbies really has as its aim not the protection of “property” but the rejection of a tradition. Their aim is not simply to protect what is theirs. Their aim is to assure that all there is is what is theirs" (Lessig, 2004, p. 255)

I am concerned that very good news for public access to and use of digital manifestations of creative content will, in reality, effectively deflect concern about attempts to extend the broad, powerful and lengthy protection copyright offers now to new lengths, and possibly even new breadths and depths. Today we are only on the cusp of some of the changes that I think will bring into play the forces, and provide the empirical data, that could radically reconfigure the contours of copyright.

There may exist a massive corpus of freely available works, but I am not sure it will act as a sufficient counterbalance of choice against control over commercial exploitation of profitable works that approaches perpetuity. The emerging structure might remind us in some ways of our earlier U.S. copyright regime that only provided protection for works that promised some profitability, and only offered longer terms to those that were really profitable, through renewal – all the rest went into the public domain by either never getting a copyright at all or by not renewing. But in this possible future configuration, the division of works into those protected and those not protected (albeit voluntarily not protected, by refraining from enforcement) might break along a different set of lines – whether the manifestation of the work is digital or analog, where analog embodiments could enjoy near endless protection while digital versions would be freely used, reused and enjoyed for noncommercial purposes, but tightly monetized for commercial purposes, for the same long periods as analog works.


My argument consists of two propositions and three conclusions. The propositions are listed here as a, b and c; the conclusions are described in the paragraphs numbered 1, 2 and 3, followed by a paragraph that elaborates proposition b:

a. If selling, distributing, displaying and performing digital copies as a revenue generator is losing traction, causing the price of digital copies to trend to zero, and

b. if copyright owners voluntarily refrain from enforcement of the digital "copy" right, at least for nonprofit purposes, functionally (de facto) weakening it so that the strength of digital copyright trends to zero (that is, for digital copies, owners would refrain from all enforcement of their rights against nonprofit users),

1. Then, the floodgates will open on creativity in business model development, freeing content creators from dependence upon control over and sales of copies to recover their investments in creating copyright works. The corpus of digital free will explode.

2. This ubiquitous digital access can extend even to digital derivative works. It’s not clear that they will have any more monetary value than the digital originals from which they are derived. They will face the same pressures as their source materials – competition with immense amounts of free materials, which would seem to drive digital derivative prices toward zero also.

3. Sounds like a good thing from the perspective of access and use, but, as a consequence, will we need and be able effectively to argue before Congress in 9 years (2017) that we need, a vibrant and healthy public domain if there is a vast collection of digital works relatively freely available for mass nonprofit use, through voluntary non-enforcement of copyright?

The 2017 de facto digital copyright I imagine owners voluntarily creating by refraining from enforcement of their rights in digital copies against nonprofit users, might look like this:
1. [exclusive right to make and authorize others to make copies]
2. [exclusive right to create and authorize derivative works]
3. [exclusive right to publicly distribute and authorize public distribution of the work]
4. [exclusive right to publicly display and perform and authorize others to publicly display and perform the work]


The natural rights copyright – controlling ex post investment

With a copyright that is significantly de facto weakened (at least along one parameter – digital embodiments, and for nonprofit users and uses), opponents of longer terms will have a tough argument to make because as the perceived strength of copyright weakens (trends to zero), term can lengthen towards infinity without the public experiencing a negative effect (Pollock 2008). The public domain only has perceived value in contradistinction to the protected domain. If the protected domain diminishes in scope, the perceived value of the public domain should diminish too.

Where might the value of 1) digital and 2) non-digital copyright lie nine years from now? Digital copyright may be no more than a right to control ex post investment; non-digital copyright would exist in expression in non-digital (analog and live performances and displays) goods and services:

Digital copyright: The right to control commercial exploitation of derivatives (ex post investment) that is, uses that derive monetary value from use of or association with digital embodiments;

Non-digital (analog) copyright: Exclusive right to exploit the value of things that cannot be digitized or that are embodied in a physical copy (analog copyright: original works of art; works embodied in physical form (books) or applied to physical forms such as mugs/t-shirts/games/toys/etc.; experiences like plays, movies, concerts)

Proponents of a vibrant public domain will argue that the copyright owner should only be able to control investment by licensing the right to commercial benefit associated with or derived from digital copies, or through exclusive control over analog or live-experience exploitation, for a limited time. But ex post investment as a justification for any term has no theoretical stopping point, that is, if I should have the right to control exploitation of my work not because I need the monetary incentive to create, or even to support me while I create new works, but rather, on principle (because I created it), what is the rationale for this right to ever end? Landes and Posner’s indefinitely renewable copyrights suggest one model for providing this kind of extensible right (2002). Their proposal may be quite appealing when balanced with ubiquitous unencumbered digital access. Longer terms are also advocated by proponents of competing conceptions of copyright such as Christopher Yoo, who argues that a term as long as constitutionally allowed (some might say, forever minus a day) will encourage entry into the market (2007). There will be no shortage of arguments in favor of longer terms.

Longer copyright terms will mainly affect (bind) popular cultural works, making them unavailable for commercial exploitation without a license. Disney will argue that it should be able to control commercial uses of Mickey so long as Mickey makes money, especially in light of all the free digital content Disney (by then) will be providing the public. As for less easily identified and reached copyright owners of older works, Paul Heald counters the argument that the copyright owner should control investment in his work (i.e., the derivative right) to increase use of older works, by showing that investment actually increases upon release to public domain. But his study was conducted under conditions of significant transaction costs during the term of copyright (2007). These costs will likely diminish or possibly even disappear entirely in the future. Already we see evidence of this in the combination of growing use of Creative Commons and other online licenses, both market-based and possible statutory solutions to orphan works problems, as well as the development of practical ways to identify and pay creators to use their works (development of copyright evidence bases). Additionally, much of the massive corpus that is born digital can either explicitly or implicitly be relatively freely used and reused for noncommercial purposes and its owners are often easier to contact for commercial exploitation rights if needed. Thus, the economic life of a creative work, the “long tail” of potential consumer demand for use of the derivative right, would theoretically increase with increased access and reduced transaction costs. Authors who see their newly discoverable older works potentially able to earn long tail payments for the entire life of the copyright (even if this proves somewhat illusory given the trend to zero price for digital works) will be standing shoulder-to-shoulder with Disney. Theirs may be entirely a natural rights argument, but that argument tends to resonate with the public and with legislators. “I should be able to control making money from my investment of time and effort in creating my property...”

The counter argument will be one of utility, technical legality and public policy (which, as we saw in Eldred v. Ashcroft (2003), was not persuasive with the Court), that a utilitarian copyright must have a stopping point, and 95 years is long enough. This will likely be a difficult argument to win, although, in fairness, the argument was not forcefully made before Congress agreed to term extension in 1997 (see for example, Dennis Karjala’s account of the only hearing on the issue, which was not announced to the public, and only attended by supporters of the legislation). Further, the same technical and market factors that will likely enable identification of and payments to authors and publishers for uses of their older works will also likely yield data that could demonstrate the relative values to them and to the public for access to and use of both their works and public domain works. These data may show that the public benefit from use of public domain works outweighs the monetary benefit to any particular author or even all authors combined. It will be a challenge to quantify the benefit to the public, but that’s precisely the reason to get started now, because these same data may make it easier to support economic theories of copyright that suggest that the longer terms are, the better (Yoo, 2007, p. 85-86).

Countering a natural rights ex post investment right

The choice to use and enjoy free

Suppose stronger (natural rights’ based) and longer copyrights are in our future. Is the corpus of freely available content the sufficient counterweight to ever more expansive copyrights that it may seem to be? If people have a clear choice when they create to choose from source materials that cost and source materials that are free, is that all that we should ask of a market economy? One might ask the same question with respect to consumption: if one has comparable choices with respect to quality, and wants to pay for something, even if one must pay for it forever (that is, it virtually never becomes public domain), should that be the consumer’s choice?

Rejecting state support of monopolies unjustified by public necessity

On the other hand, copyright is a state-granted monopoly in the U.S., not a natural right, and it ought to bear some demonstrable relationship to the achievement of a goal that can’t be achieved without a monopoly. As creators rely less on copyright’s exclusive monopoly as an incentive to create and rely on it instead to control ex post investment forever (minus a day, or course), is there really a utilitarian justification for copyright at all? A comparison with physical building materials (manufactured and sold to the public without a government monopoly entitling the owner to control others’ investment in creative works that use and build upon the materials) suggests difficulty justifying a government granted monopoly if in fact recovery of investment is simply not problematic because it is not based on control over the sale, use and reuse of copies (the exclusive way that the Copyright Act confers its benefit on creators), but instead, derives from selling other goods and services besides the work itself. If others can earn a living from exploitation of creative works without negatively affecting the creator’s ability to make a living, and perhaps even enhancing his or her ability to make money from the works in some cases (for example, the Brazilian musicians who encourage street vendors to freely copy and distribute recordings of their works while the musicians make their own living from their live concerts), where is the need for a state-granted monopoly as an incentive, at least in digital manifestations?

Indeed, is there even a need to prevent others from performing the musician’s music live as in the Brazilian example, or selling copies of a book right alongside the creator? Often a musician’s particular nuances are what make his or her live performances unique and attractive (Vaidhyanathan, 2003). As examples of freely distributed creative content upon which others are invited to build services and additional products proliferate (for example, the body of open access scholarly literature, book reviews, blogs that post news, freely licensed images, videos and even books), the many ways one can make a living while creating content without relying on control over others’ use and reuse of that content in order to flourish would seem to undermine the argument that copyright is required to stimulate creativity. Given available alternatives to recover investment without resort to monopoly pricing (enabled by artificially preventing duplication, distribution and even public live performance), where would the justification for invoking a state-granted monopoly be?

As the benefits of a limited monopoly diminish, in copyright’s case, its intended incentive to creators, the anti-competitive costs of monopoly increase in comparison. Viewing the economics of copyright from the “innovator’s dilemma” perspective (Christensen, 1997) is helpful in this regard: economic forces that normally operate in the presence of technological opportunities to reduce costs and provide better services or goods from competition are suppressed by imposition of a limited monopoly vested in those who benefit from current cost recovery models and pricing strategies. Creative destruction does not operate within copyright industries the way it does in industries where entrenched interests cannot prevent entrepreneurs from using new technologies to explore new markets. Note that Christensen does not discuss copyright industries (1997). In contrast, in copyright industries, monopolists are able to shut down any innovation that exploits their source materials (examples abound – the string of early lawsuits against innovators in the digital sphere from mid 90’s through the present day).

But the imposition of monopoly rights to stop what would otherwise be normal economic development processes forces innovators to either absorb increased costs by licensing rights from copyright owners (in the unlikely event that the owners want to enable their more entrepreneurial competition) or wait for the development of a corpus of alternative source materials (as has developed in the last ten years), to experiment with new business models built on this freely available corpus, free from dominance by the owners of copyrighted materials for whom it is not in their perceived interests to accommodate innovation. Once a sufficient body of works exists on which experimentation can proceed, the new models can compete with the old and creative destruction resumes. This suppression of competition has significant costs that may be justified if we need the monopoly to stimulate creativity, but where creators are able effectively to reap rewards similar to those of other industries without control over copying, distribution and public display and performance of their works, what benefit does the public gain from the grant of the monopoly?


Zero is a special price (Shampinier, 2008). Consumption rates increase disproportionately when products and services are free. The future of copyright is bound up in this fact about the nature of the digital networked environment. But the digital environment does not simply encourage free; it actually impairs a creator’s ability to exact a price for digital content. But, in exchange for giving up pricing by the piece, creators are invited to sample (indeed to invent) a plethora of alternative ways to make their livings, alternatives that were never possible (or necessary) before digital networking. Once creators know that there are effective options to recover investment and make a profit that do not pit them against the strengths of the digital network, the need for a state-granted monopoly, the only legal exception to an otherwise illegal business strategy, may be seriously questioned. Long before we reach that point, however, the explosion of freely available digital content may deflect concern about the effect on the public domain of another extension to the copyright term. The opportunity to expand the term will come well before we have sorted out whether, or to what extent, we really need to grant creators a monopoly to increase production (see for example, Pollock, 2007; Yoo, 2007).

If we have not thought through and cannot easily articulate the value of a public domain in a world where the ubiquitous digital network truly recalibrates the relationships among creators, between creators and intermediaries, and between those groups and those who enjoy creative works, we will not be prepared to defend the public domain when copyright owners ask Congress for another term extension in 2017. What difference will another 20 years make? We must be prepared to answer that question effectively for a creative landscape that will be quite different from the one that existed in 1997 when we last faced the question.

Research questions

I would like to explore these problems and opportunities by researching two of the foundational propositions that I suggest, if valid, will potentially erode support for the public domain by 2017, and set the stage for a redefinition of copyright itself beyond that. While I believe there is considerable published support for both propositions generally, it will be helpful to situate the evidence within the milieu of current copyright industries in transition.

The two propositions are 1) that there are viable business models for creating and distributing creative works that do not depend on control over access to or use of digital copies and 2) that zero is a special price for intellectual works. The first proposition may depend for its full manifestation on the validity of the second, that is, it may be that only when copyright owners accept that they must give up reliance on pricing digital manifestations of their works are they likely to be able to envision alternative ways to make their livings as creators. Open access provides a good example of both propositions and their relationship to each other. Open access publishers who provide access to intellectual works without charge have been exploring new business models to recover their costs and produce return on investment for over a decade.

We normally expect that intellectual works are not fungible, and that price, therefore, is not a strong determinant of choice. But studies of rates of citation for journal articles that are freely available online (self-archived by their authors), compared to rates for articles from the same journals that are only available behind barriers of cost and inconvenience, suggest that either price or convenience, or perhaps both, do indeed disproportionately affect choice of what to read in the digital environment (Open Citation Project, 2008). Open access works are more highly cited than comparable toll access works. I would like to explore the citation phenomenon to demonstrate whether there are broader effects of zero price on choice of intellectual content. Free may be a greater determinant of choice in the digital environment than it is in the bookstore or the physical research library.

1. Where is the value in owning a copyright if the owner permits his/her copyrighted works to be digitally distributed, consumed and reused without remuneration?
a. Interview copyright owners who serve content for free, allowing reuse and derivatives, but who nonetheless cover the costs of creating their creative works, for insights into what role the exclusive rights to control copies, derivatives, distribution, public display and performance play in their business models.
i. I may approach this study using focus groups, surveys and interviews, in that order.
ii. I would choose for in-depth interviews creative professionals from industries that are both distribution- and performance-based
1. Publishing
a. Periodicals
b. Books
2. Music
3. Theater or dance

2. Is zero a special price when intellectual content, rather than chocolate or televisions, is the commodity?
a. Analyze usage statistics for a set of books from [existing commercial databases of paid and free written works] to determine if there is a relationship between price and number of downloads, specifically, if a zero price has a disproportionate effect on downloads.
i. Condition 1: free books
ii. Condition 2: very inexpensive books
iii. Condition 3: moderately expensive books
iv. Condition 4: expensive books
v. If zero has the special value here that it has in other contexts, the freely available works will be chosen at a higher rate than the paid works, even if prices for paid works are very low.
b. The four groups of works to be compared (free, low, medium and high priced) can be matched (the groups made similar) by analyzing their usage statistics across a number of libraries over a period of time, to try to assure that all were comparably used/not used when access was the same for all – visit the library and check one out (proxy-pretest quasi-experiment).

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