Liebowitz and Margolis (2005)

From Copyright EVIDENCE

Advertising Architectural Publishing of books, periodicals and other publishing Programming and broadcasting Computer programming Computer consultancy Creative, arts and entertainment Cultural education Libraries, archives, museums and other cultural activities

Film and motion pictures Sound recording and music publishing Photographic activities PR and communication Software publishing Video game publishing Specialised design Television programmes Translation and interpretation

1. Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare 2. Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)? 3. Harmony of interest assumption between authors and publishers (creators and producers/investors) 4. Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption) 5. Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)

A. Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right) B. Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction) C. Mass digitisation/orphan works (non-use; extended collective licensing) D. Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability) E. Fair remuneration (levies; copyright contracts) F. Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Source Details

Liebowitz and Margolis (2005)
Title: Seventeen famous economists weigh in on copyright: The role of theory, empirics, and network effects
Author(s): Liebowitz, SJ, Margolis, SE
Year: 2005
Citation: Liebowitz, S. J., & Margolis, S. E. (2005). Seventeen famous economists weigh in on copyright: The role of theory, empirics, and network effects. Harvard Journal of Law and Technology, 18(2).
Link(s): Definitive , Open Access
Key Related Studies:
Discipline:
Linked by: Arai and Kinukawa (2014), Baker and Cunningham (2006), Buccafusco and Heald (2012), Heald (2007), Png and Wang (2006)
About the Data
Data Description: Alongside a literature review, the authors report an unpublished examination carried out during mid-1980s by Liebowitz on the longevity of titles. It examined the concentration of sales. In 1986, adult hardbound trade books and book club sales together totaled approximately $1.7 billion. Moreover, Liebowitz constructed a small data set consisting of a sample of titles reviewed in Book Review Digest in the 1920s, along with best-sellers (overall 236 books).
Data Type: Primary and Secondary data
Secondary Data Sources:
Data Collection Methods:
Data Analysis Methods:
Industry(ies):
Country(ies):
Cross Country Study?: No
Comparative Study?: No
Literature review?: Yes
Government or policy study?: No
Time Period(s) of Collection:
  • Mid-1980s
Funder(s):

Abstract

On May 20, 2002, seventeen economists, including five Nobel laureates, presented an amicus curiae brief discussing the economics of copyright extension in support of the petitioners in Eldred v. Ashcroft, a Supreme Court case challenging the constitutionality of the Sonny Bono Copyright Term Extension Act of 1998 (CTEA). Readers would have every reason to believe that the arguments set forth in this document are sound down to the smallest details. Yet this is not the case. This article provides a counterweight to the amicus brief, identifying some points the economists ignored, clarifying some discussions they did not quite get right, and providing data that runs counter to some assumptions they made.

Main Results of the Study

  • This article agrees with the Eldred economists on the inefficiency of copyright extension applied to existing works, if the analysis is restricted to incentives to create. However, there are other important considerations that might reverse this conclusion.
  • The economists’ second point (new works) is not as clear-cut and is incompletely explored in the brief.
  • The data that economists would need, but do not have, include (1) the number and value of new works created as a result of extensions of copyright duration; (2) the reduction of surplus for reproductions of copyrighted materials under extended copyright, relative to the surplus that would be generated if copyright protection were less lengthy
  • There is a possibility that for some authors, in some range of income and propensity to create, a small increase in present value could make an important difference in creative output, perhaps because they reach a point where they switch to full-time writing
  • An unpublished empirical research carried out by Lebowitz in the 1980s back up anecdotal evidence — that the distribution of book sales is very highly skewed toward the more successful book titles.
  • More than half of the best-sellers in the 236 sample remained in print for a long enough period of time that the 1976 extension to the copyright law would likely have affected the present value of future book sales
  • Even for non-best-sellers, a third still survived after fifty-eight years, indicating that a fairly significant share of other important books would likely be affected by changes in copyright law even when the copyright term is quite long.
  • The inferences about depreciation rates of books drawn from overall survival rates are likely to be misleading. The great majority of books are obscure


Policy Implications as Stated By Author

  • A more complete view requires consideration of the responsiveness of creative efforts to marginal incentives and the function of ownership of intellectual property beyond the incentive to create.
  • A more nuanced view requires attention to the limitations in the exclusionary aspect of copyright law.
  • A more correct view requires an examination of empirical magnitudes that no one has fully undertaken.


Coverage of Study

Coverage of Fundamental Issues
Issue Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
Green-tick.png
Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)?
Green-tick.png
Harmony of interest assumption between authors and publishers (creators and producers/investors)
Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption)
Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)
Coverage of Evidence Based Policies
Issue Included within Study
Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right)
Green-tick.png
Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction)
Mass digitisation/orphan works (non-use; extended collective licensing)
Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability)
Fair remuneration (levies; copyright contracts)
Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)
Green-tick.png

Datasets

Sample size: 1700000000
Level of aggregation: Books
Period of material under study: Mid-1980s


Sample size: 236
Level of aggregation: Books
Period of material under study: Mid-1980s