Why Copyright Law May Have a Net Negative Effect on New Creations: The Overlooked Impact of Marketing

Abstract:     
[Note: the substantially revised published version of this article is available at www.ssrn.com/absract=489762]

This article questions whether copyright law's prohibition against unauthorized copying and sales is either necessary or beneficial to the production and dissemination of creative content. Building on the thesis of Stephen Breyer's 1970 Harv. L. Rev. article, The Uneasy Case for Copyright, it questions the necessity of copyright by carefully identifying and explaining how new technologies and social norms provide many viable business models for financing new creations without the need for the current broad copyright protection. More significantly, it contends that, in the current lottery-like media entertainment environment, the higher revenues that copyright law enables the most popular creations to generate are generally dissipated on promotional efforts (rent seeking), which tend to drown out marginal creations. Thus, current copyright law may actually reduce the production of new creations. As background, the article reviews the six categories of costs that must be covered to enable content to be published effectively.

JEL Classifications: C7,D2,D3,D4,D6,H2,J3,K0,K3,L1,L2,L8,M3

Working Paper Series