Submitted to the US Department of Commerce in response to their call for comments on Copyright Policy, Creativity, and Innovation in the Information Economy.
Let's allow musicians to choose to give up their monopoly on distribution rights. In return, let's give them money in proportion to the popularity of their works, starting with money the government and ISPs would have spent on copyright enforcement.
Copyright is a poor mechanism for encouraging creation
The premise of copyright is that the monopoly rent of a work is a good proxy for the benefit to society of the work's existence. This is no longer the case, at least for recorded music.
Copyright limits the societal benefit of the work's existence, because:
- People who can't afford recorded music don't get to enjoy it.
- People often can't listen to songs before purchasing them, so they purchase too few songs or the wrong songs.
- People are denied the joy of sharing music with their friends.
The portion of the societal benefit that is apparent in the monopoly rent is very low, because:
- Transaction costs form a large portion of the purchase price.
- Promotion costs are high in order to overcome consumer reluctance to spend money on an unknown.
Because of copyright, most of the potential societal benefit of a new song goes to deadweight loss and transaction costs. Only a tiny portion makes it to the musician.
Copyright harms society
Since the rise of the Internet, copyright has begun to have negative externalities that go beyond musicians and listeners:
- Government resources are spent on copyright enforcement.
- A hidden tax is levied on internet connections as ISPs are forced to filter, forward notices of infringement, and respond to subpoenas.
- User-generated content is at risk from fraudulent takedown notices.
- Popular infringement, combined with sporadic-but-harsh enforcement of copyright laws, diminishes respect for all laws.
Attempts to enforce copyright through DRM software create additional problems:
- DRM conflicts with fair use.
- DRM disadvantages open-source software.
- DRM anti-circumvention laws conflict with free speech among software developers.
- DRM legitimizes infringement in the minds of users who find they cannot listen to purchased music on a new device.
Copyright is becoming increasingly inefficient and harmful. Let's try an alternative, and let musicians experiment with a wider range of promotion models.