George Mason University Antonin Scalia Law School

Where Are the Creators? Consider Creators in Copyright Reform

Note:  This post was cross-posted at the CATO Unbound on 2/1/2013.  The January 2013 issue of CATO Unbound feature a debate on copyright reform, Opportunities for Copyright Reform This post responds to the discussion in that issue, but it also stands alone as a critique of copyright reform proposals that favor to consider the importance of creators.

One of my biggest questions after reviewing the other responses as well as the lead essay is this: “Where are the creators?” The copyright policy debate is often rather vague on certain key points. Amid the discussion of weighing and balancing interests, “corporate welfare,” and tragic obstacles to remix culture, there is a notable silence.

Too often, the modern copyright debate overlooks the fact that copyright concerns creative works made by real people, and that the creation and commercialization of these works requires entrepreneurial risk taking. A debate that overlooks these facts is factually, morally, and economically deficient. Any reform that arises from such a context is likely to be both unjust and economically harmful.

I am genuinely puzzled when copyright discussions treat creative works as if they were a pre-existing resource that the government arbitrarily allocates. They are not. They aren’t an imaginary regulatory entitlement, such as pollution credits. They aren’t leases or mineral rights on public land handed out to political cronies. Creative works are, instead, the productive intellectual labor of private parties. Real people make this stuff.

At this point in the discussion, a common rhetorical move is to reject what some scholars describe as the romantic myth of authorship. Copyright skeptics point out that authors build on the work of others and that many creative works are the work of corporations, not individuals. This argument was provoked by many decades—a couple centuries, really—of rhetoric that put the individual author on a pedestal. Even if one concedes that authors have, perhaps, been idealized, taking them for granted goes too far.

The absence of creators from the critique of copyright is one of many reasons I doubt the political (and moral) appeal of much of the case for copyright reform we have heard from a few libertarians and conservatives. At the risk of dredging up tiresome memories from the recent presidential election, the argument over “you didn’t build that” was very familiar to me as a scholar of copyright. In both instances, there is a divide between those who value (or, even, romanticize) individual achievement and those who emphasize how much that achievement depends on a social context.

Instead of rehashing that recent discussion, I will make a political point instead: Do aspiring libertarian and conservative reformers of copyright really expect their comrades to embrace a cause that recalls the refrain “you didn’t build that”? I’m skeptical that most free marketers, outside of the echo chamber of the blogosphere, are concerned that allegedly unbalanced copyright is rewarding copyright owners too much and believe that our primary concern should rather be social welfare. Regardless of the merits, I don’t see such arguments bringing conservatives and libertarians to the barricades.

I suppose a further response here might say that my talk of creators is misplaced. After all, this argument goes, big media corporations, not individual creators, are the true beneficiaries of copyright. This is the point in the discussion where people often try to point out how unsavory the entertainment business is by rolling out the Hunter S. Thompson misquotethat the entertainment business is a long plastic hallway where pimps and thieves roam free. And, as Timothy B. Lee argues in his second response, these big companies have received everything they wanted from Congress these past twenty years. Everything, that is, except effective enforcement, as Ryan Radia points out in his reply.

Once again, I’m skeptical of the political appeal to libertarians and conservatives of a push for copyright reform, particularly based on a distaste for powerful corporations and their influence. Aren’t you the same people who defend oil and pharmaceutical companies?[1] Yes, it makes sense to worry about cronyism and public choice problems when big business meets big government. We have seen far too much of the dubious results of this union in recent years. However, there is a difference between auto and bank bailouts and bungled green energy subsidies, on the one hand, and media businesses looking for effective ways to enforce their rights against an onslaught of infringement, on the other.[2] I hope that most free market advocates can discern a difference between receiving a windfall of other people’s money and fighting to protect one’s own property.

I also hope that free market advocates understand the value of media corporations that finance the creation and distribution of creative work. We don’t vilify venture capitalists and others who seek a return after putting their capital at risk in the hands of entrepreneurs, and so we should not vilify media companies for seeking returns by making risky bets on musicians, movies, and other media products.

In any event, much of the urge to battle Big Media and its allegedly overbearing use of copyright seems increasingly outdated. Big Media is less big than ever before. Meanwhile, many parts of the creative industries are looking more entrepreneurial than ever before. As production and distribution costs fall (although it’s harder than ever to get noticed), creative businesses become more entrepreneurial.

We ought to get to know individual creators better. Let’s start by considering some statistics: Nationally (as of January 1, 2012), there were 905,689 businesses in the United States involved in the creation or distribution of the arts. They employed 3.35 million people, which represents 4.42 percent of all businesses and 2.15 percent of all employees. These are individuals and small businesses located all over this country—the sorts of entrepreneurs who are usually the heroes of free market conservative and libertarian discourse.

In my work with the Copyright Alliance, a membership organization that works to represent and educate creators across the country, I’ve had a chance to learn more about creators and their interests. Take, for example, the photographer Michael Stern. In an interview with the Copyright Alliance, Stern’s tremendous passion, work ethic, and love of independence shines through. For one of his works, a time-lapse video lasting about 30 minutes, he took 103,937 photographs and spent 60 hours on every 2 minutes of video. Such hard work is not supported by a large employer or a subsidy. Rather, he is a fiercely independent entrepreneur:

“The real benefit of being a self-employed photographer,” he says, “is that I can move through life on my terms and do what I want in the way I want to do it. That freedom drives me.” But, it’s not for everybody, he warns. “Nobody loves you like your mother, and even sometimes not even her. So ya gotta do it for yourself. If you don’t, you won’t have the drive needed to reach your goals.”

Similarly worth considering are the Copyright Alliance’s video interviews with musician Lucky Dub and with indie record labelESL Music. They speak of the importance of being both good businessmen and great artists, and the ability to secure a return on that art. These, and millions of entrepreneurial creators like them, are the face of today’s creative industry. They represent the sort of entrepreneurs that free market advocates justly celebrate.

If we are to have copyright reform, we must consider the interests of such creators first. Timothy B. Lee says we should have copyright reform that promotes property rights. Well enough. However, it is strange to find a libertarian prioritizing reforms such as orphan works and re-formalization in the name of property rights. In theory those reforms have some merit; in practice they threaten to make copyright owners’ rights less secure.

Why not instead wade into the morass of exceptions that condition and limit the rights of copyright owners to freely transact and negotiate prices? When I teach copyright law, I warn my students that the rights of copyright owners, set forth in 17 U.S.C. Section 106, seem deceptively simple. Section 106 constitutes an easily grasped scheme of property rights (albeit with its own complications). However, Section 106 includes the statement that those rights are “subject to Sections 107 through 122.” Those Sections[3] greatly condition and limit the rights of copyright owners, with their complexity often rivaling anything found in the Internal Revenue Code. Among other things, they set up schemes of compulsory licensing where an expert body, the Copyright Royalty Board, sets prices through proceedings with titles such as “Determination of Rates and Terms for Preexisting Subscription Services and Satellite Digital Audio Radio Services, Docket No. 2011-1 CRB PSS/Satellite II.”

Such provisions create the sort of problems that free market advocates would expect. As Hayek predicted, once government restricts the ability of parties to freely transact, and removes the price signal, then price-setting becomes a political issue. Industries are beholden to the government, and what once were market decisions become political decisions. Thus, Pandora founder Tim Westergren spends his time trying to set his prices by rallying public opinion and negotiating in the media and Congress, rather than with copyright owners. The bill that Pandora backs, the Internet Radio Fairness Act certainly is fair—to Pandora, but perhaps less so to musicians and other copyright owners. I’ll be more assured of their property rights commitments when reformers seek to simplify copyright and put transactions and pricing back into the private sector.

Other pro-creator reforms that we should consider are:

  • Making copyright registration more accessible to individual creators and small firms. Those currently proposing to “re-formalize” copyright often fail to take into account the transaction costs imposed on creators. The system is set up well to handle high-value, low-volume works—for example, the output of a movie studio. The system is not set up well to handle low-value, high-volume works—for example, the output of a photography studio. As a result, the Professional Photographers of America estimates that only 1% of professional photographers register their work. Sound property systems are supported by clear titles, so registration, in theory, could be useful. However, it should take into account the needs of all creators.
  • Making the DMCA notice and takedown system practicable for individuals and small firms. We have heard the stories for years about the potential chilling effects of the DMCA’s notice-and-takedown regime. Larger copyright owners find the regime frustrating and less than effective. However, the DMCA notice-and-takedown process is often a draining and debilitating game of Whac-a-Mole for individuals and small firms.
  • A process for resolving small copyright claims without going to court. The US Copyright Office is already considering such a reform at the direction of Congress. Such a process would be a welcome development for creators attempting to address consequential, but small scale infringement.

Copyright law has been reformed in the past, and it likely will be reformed again. The goal of such changes has largely been to ensure that the Copyright Act remains relevant and useful to creators first, and the broad public second. Creators ought to remain central to any future copyright reform discussion. Most of the current proposals don’t really take the needs of today’s entrepreneurial creators into consideration.

[1] Not that there’s anything wrong with that.
[2] Not all of their legislative proposals have been great ideas—case in point, Rep. Howard Berman’s 2002 bill that would have allowed copyright owners to engage in hacking to thwart filesharing.
[3] Section 107 will be familiar to many as Fair Use, which is straightforward in its statement , but difficult to apply. I would wager that few outside the legal and media worlds (including would-be reformers) are familiar with many of the complex provisions in the sections beyond 107.