Copyright Extremophiles: Do Creative Industries Thrive or Just Survive in China's High Piracy Environment?
77 Pages Posted: 15 Jul 2014 Last revised: 20 Jul 2015
Date Written: May 5, 2014
The Article takes its title from extremophiles in biology, i.e., organisms that have adapted to survive and even thrive in environments deadly to most life forms. Just as microorganisms have evolved to thrive in superheated or highly acidic environments, so too can a subset of creators find ways to monetize their creativity even in a high piracy environment. Just as the existence of extremophile organisms adapted to severe living conditions tells us little about the optimal conditions for thriving biological diversity, however, the fact that some monetization models can work for some types of producers or artists in China does not mean that optimal or even near-optimal conditions exist for the development of flourishing, healthy, and stable creative industries.
This Article analyzes and responds to six themes developed in recent commentary that suggest endemic copyright piracy has been inconsequential or even beneficial to China's copyright industries and Chinese society. These themes are: (1) Evidence indicates that piracy has not harmed China's creative industries because production continues apace and is even increasing; (2) Piracy benefits the creative process and consumers by lowering access barriers to a wide variety of information goods; (3) Piracy incentivizes copyright owners to adopt innovative business models; (4) Piracy is especially important for political discourse in China because it helps information goods circumvent heavy-handed state censorship policies; (5) Piracy confers benefits on foreign rights holders in China by providing free advertising and branding for their works; and (6) Piracy is less of a threat to domestic Chinese creative industries than is foreign content that threatens to dominate popular culture.
An analysis of China’s music and film industries shows that each of these six themes about piracy in China is wrong, or at least incomplete. In responding to them, this Article claims there are three critical functions of copyright that are undermined in a high piracy environment such as China. First, copyright helps nurture and enable a professional class of creators, including an ecosystem of support professionals who are critical to the development and maintenance of a vibrant creative sector. Second, copyright enables creators to monetize diverse revenue streams — a crucial but often overlooked function of copyright. Diminished revenue stream diversity harms the creative ecosystem by reducing monetization opportunities for smaller and independent producers, distorting market signals sent to producers, and disproportionately exposing producers to the idiosyncrasies of peculiar markets and exploitation by intermediaries. (The dangers of an industry relying on a single revenue stream are well illustrated by the Chinese recording industry, which survives almost entirely off mobile music revenue but receives a mere 2 percent share of China's $4 billion annual mobile music sales.) Third, a functioning copyright system enables the growth of market-supported creative industries independent of government largesse, thereby aiding the long-term development of a more open and diverse public discourse. With these three functions of copyright diminished, China’s high piracy environment threatens the long-term stability, growth, and cultural potential of its creative industries. Lastly, the Article argues that these lessons are applicable beyond China, and shows in particular how widespread unauthorized downloading in the United States threatens the stability of its creative industries, particularly by diminishing revenue stream diversity.
Keywords: copyright, copyright law, China, piracy, Chinese copyright law, creative industries, music industry, film industry, movie industry, Chinese music industry, Chinese film industry, internet law, digital copyright
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