The Trouble with the Copyright Debate
Does every illegal download represent a lost sale?
A few days ago, I committed an illegal act.
Instead of watching the latest episode of the British fantasy show Merlin on the SyFy channel and suffer through a hundred commercials and pop-up ads that sometimes deface the screen during the show itself, I got online and watched an illicitly streamed video. What's more, I intend to continue my crime spree and download the three-episode second season of Sherlock, which aired on the BBC earlier this month, rather than wait until May when it finally gets to PBS.
The point of this true confession is that the current debate about copyright enforcement and piracy on the Web largely misses the boat. Yes, creators and copyright holders have important rights and legitimate interests. And yes, some Internet users display an obnoxious sense of entitlement to "free" intellectual content. But media corporations and other owners would be far better helped by being savvy about consumers' wants and needs than by draconian and ultimately futile attempts to police the Web.
Right now, the copyright enforcement debate has focused on two controversial congressional bills, SOPA (Stop Online Piracy Act) and PIPA (Protect Intellectual Property Act), both withdrawn a few days ago due to a ferocious backlash from technology companies and websites—a backlash that culminated in a day-long blackout of popular sites including Wikipedia. Among other things, the legislation would have enabled the federal government to take down websites based on mere allegations of copyright infringement, even if the offending material was uploaded by users without the owners' knowledge.
Yet even without these bills, which may yet be revived in some form, there's plenty of heavy artillery in the war against Internet piracy. Even as SOPA and PIPA were breathing their last, news came of the government's seizure of Megaupload.com, a hugely popular file-sharing site, and the arrest of several of its top executives on charges of racketeering and criminal copyright infringement.
Megaupload, which has made $175 million since 2005, was a particularly juicy target due to its size, popularity, and apparently blatant moneymaking from enabling copyright violations. But most experts acknowledge that the raid will barely make a dent in the black market for copyrighted material. At most, Internet users looking for illicit movies or TV episodes may have to search a bit longer and settle for less convenience (for instance, having to download the video without the option to watch online).
It is commonly claimed that digital piracy causes huge revenue losses: $3.5 billion a year to the film industry, over $4 billion to the music industry. Yet these figures come from industry sources, which are hardly objective. A 2004 analysis by Harvard business professor Felix Oberholzer-Gee and economist Koleman Strumpf found the impact of file sharing on legitimate music sales to be negligible. In a 2009 paper, Oberholzer-Gee and Strumpf noted that several other studies supported their conclusion while others documented a real but small effect, accounting for no more than 20 percent of the overall sales decline.
The notion that every illegal download represents a lost sale, on which official claims often seem to be based, is frankly absurd. It's unclear whether these estimates even account for the impact of legal video streaming through Netflix and video-on-demand services. They certainly don't account for the positive effect of unauthorized content sharing—for instance, sales to people who buy a TV show on DVD set after sampling it online, as I and quite a few of my friends have done.
A common retort is that theft is theft. But do owners of intellectual property have a right to collect a profit from every consumer? Consistently applied, such a position should lead to a ban on libraries and make it illegal to lend a book or DVD to a friend—or even to resell used books, CDs, and DVDs.
Of course, if few consumers paid for media content, the entertainment and publishing industries would either collapse or require vast public subsidies. Most people understand this, and are willing to pay their way. But this is where entertainment companies should meet customers halfway. Why not make more content available via pay-on-demand? (To take my earlier example: if British shows with a substantial American following became available in the U.S. shortly after their original airing for a reasonable fee, many fans would gladly pay to watch them legally.)
In their 2009 paper, "File Sharing and Copyright," Oberholzer-Gee and Strumpf conclude that file sharing does weaken copyright protection—but does not discourage artistic production and, in fact, benefits society as a whole. It is important to remember that copyright was originally instituted, as the Copyright Clause of the U.S. Constitution says, "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." The "limited times" have been extended again and again, from an initial maximum of 28 years to the present term of author's life plus 70 years, or 95 years for corporate creations. Copyright law has also been extended to derivative works, raising roadblocks for authors and artists who engage in the sort of creative reimagining of classics—such as Gone With the Wind retold from through a slave's eyes—that has always been culture's lifeblood.
The defeat of SOPA and PIPA is the first time a proposed expansion of copyright enforcement has been stopped by those who champion intellectual freedom. Perhaps it should be the start of rethinking and rolling back an overgrown law that, in its current form, arguably hinders rather than promotes creativity and expansion of knowledge.
Contributing Editor Cathy Young is a columnist at RealClearPolitics, where this article originally appeared.