Re: actuaries and copyright

On 4/24/96 jsebby[_at_]unlinfo.unl.edu (Jayne Sebby) wrote:
>
> Very few creative people do things just for the financial reward or
> create faster/more things in order to make more money, immediately or
> down the road. Copyright extention therefore means little to the
> artist.

But creative people DO tend to do more creative things when they get paid for them. Sometimes the financial reward is a direct factor. More usually it is an indirect factor in that it supports the creator so that he can spend his time creating, rather than, say, waiting tables.

> Also most creators (except possibly authors and muscians)
> sell their creations, including copyright, to others or create under
> a "work for hire" scenario, so any copyright term is irrelevant.

You sell your work for a price which is dependent on the value of the work to the publisher (or art gallery, or software house, or client). Part of that value is whether or not the buyer has an exclusive on the work. A software house or music, video, or book publisher is not going to be ecstatic over paying you a lot of cash for something that someone down the street can copy for peanuts. An artist knows the value of scarcity and exclusivity. If the artist works in prints, she will number the prints and break the plate when the run is done. A copyright is a way of legally ensuring that exclusivity.

That said, I certainly agree with Paul J. Heald that the current value to the creator (or publisher, or anyone) of an extra 20 years 50-80 years in the future is absolutely negligible.

I thought y'all might like some numbers ( I AM a numbers person, after all). If we make the assumption that we will receive 10,000 per year in royalties from our work, and that the risk is such that a bank would give us a loan at about 10% based on the prospective stream of income, then the current value to us of the entire income stream from now (at creation) to 50 years is $99,000. If we tack on another 30 years of copyright, still at 10,000 per year of royalties, the additional value of the added thirty years to me, looking from year zero, is only another $803. If we tack on yet another 20 years worth of royalties, because of the powerful effect of discounting on income so far into the future, the additional value of the entire added 20 years is only $42.

AND, that assumes that 10% is a reasonable discount rate considering the risk involved that you will still be receiving that 10,000 per year fifty, eighty, and even 100 years into the future. My guess is that a more reasonable rate would be 30%, not 10%. At 30% the current value to us of the entire income stream from now to 50 years is $33,330. Tacking on another 30 years adds absolutely zero to that value. Tacking on a further 20 years of course also adds nothing to that value.

Basically, adding another twenty years to the end of the copyright life does nothing from the point of view of either the author or the publisher at year zero. It cannot have any measurable effect on raising the number of works authored. Where it DOES have an affect though is to the copyright holder whose copyright is about to expire. If my copyright is about to expire, adding another 20 years of our hypothetical case is worth an additional $33,160. Not an amount to sneeze at.

But adding that 20 years buys the public nothing. It cannot affect the rate of the production of new works. It cannot even give publishers of new works an added incentive to publish. It just gives a windfall to those who hold expiring copyrights.

Martha Luehrmann
Lawrence Berkeley National Lab
MRLuehrmann[_at_]LBL.gov
510-486-4303 Received on Thu Apr 25 1996 - 23:00:18 GMT