Copyright Lobbyists And The $1 Trillion Fallacy

from the even-if-we-take-the-bogus-stats-at-face-value dept

Well, here we go again. Earlier this week, the IIPA (a sort of uber copyright maximalist lobbying group, made up of other copyright maximalist lobbying groups, including the MPAA, RIAA, BSA, AAP, NMPA, ESA and IFTA) released a new report on the economic impact of “the Copyright Industries.” This report comes out every few years, written by the copyright maximalists’ favorite economist, Stephen Siwek, who is well known for both these reports and another set of reports in which he tries to calculate “losses” due to infringement using the most ridiculous and misleading methodology imaginable. This report is slightly different. There’s not much in the way of direct methodology: he’s basically lumping together a bunch of industries as “core copyright” industries, and presenting some stats around them. There are also the “partial copyright” industries, which are kind of laughable, since it includes things like “furniture.”

The report is incredibly misleading (and is being used in a misleading way), but we’ll get to that. Instead, let’s start out by taking the report at face value, and assuming that it is accurate. The claim that the backers of the report (including NBCUniversal, which funded it) are latching onto is the big round number: the claim that:

for the first time, the contribution of the core copyright indus- tries of the U.S. economy surpassed one trillion dollars in 2012

One Trillion! Big number. So big that the IIPA was even able to get the head of the Copyright Office, Maria Pallante, to highlight it in her presentation that coincided with the launch of the report. She apparently put that number on a single powerpoint slide and asked people to remember that number.

As we’ll describe, that number doesn’t actually say what Pallante and others are pretending it says, but even if it did… doesn’t it suggest that the industries are doing fine? Even as infringement has continued to be a major issue, and there are new ways to share content around the globe, the data in the report suggests that the “core copyright industries” have continued to grow and thrive at a very consistent pace — completely contrasting the supposed doom and gloom these same folks tell us about how piracy is supposedly killing these industries.

Instead, the report shows a steady increase in revenue within these industries, a steady increase in employment and a steady increase in the salaries of those employed in those industries — in which they make more than people in many other industries. Basically, every chart in the report suggests that the “core copyright industries” are thriving, especially compared to the wider economy. Take, for example, the compensation chart:

<img src=”https://i.imgur.com/JzBG7KN.png” width=560″/> And yet, during those same years, we were being told, repeatedly, that those industries were dying, that jobs were going away and that we needed much stricter new copyright laws. This chart seems to debunk all of that.

But… of course, that’s not how the IIPA and its supporters are spinning this report. Instead, they’re using it to argue that “the core copyright industries” are “so important” to the US economy that they need to new laws and protection:

“This study represents a milestone,” said Steven J. Metalitz, counsel to the IIPA. “In order to preserve and enhance jobs, exports and economic contributions, it is critical that we have strong legal protections for U.S. creativity and innovation in the U.S. and abroad.”

[….] “This report makes it crystal clear that workers in the creative industries make a huge contribution to America’s economy,” said Matt Loeb, international president of the International Alliance of Theatrical Stage Employees, which represents crew members on movies and TV shows. “It also underscores the urgent need to do more to build, strengthen and protect employment in this dynamic part of our nation’s economy.”

But… neither of those claims follows from the numbers presented. If these people knew anything about basic economics, they’d know that protectionism doesn’t help grow markets — it constrains them. The way you “strengthen” employment in these markets is by allowing competition and innovation to flow, which is the exact opposite of the legal regime they’re pushing for. Of course, everyone knows what this is really about. The report is supplied by a few legacy players in this space, the ones threatened by innovation and upstarts. It’s being pushed by the gatekeepers who don’t want to compete. They don’t want there to be more competition and innovation, because that tends to allow artists and creators to go direct — and not to have to rely on gatekeepers, who take an 85% cut of all revenue.

Even worse, the report is incredibly misleading — in effect allowing Siwek, the IIPA, Maria Pallante and other copyright maximalists to blatantly use the success of others who did not rely at all on copyright to support their notions that we need more copyright. That’s because of a basic fact that is totally ignored in the report: just because you produce “copyright” covered content, it does not mean that you needed copyright to do so, or that you require copyright laws to do so. Instead, the report and its supporters are falsely claiming that every bit of revenue from the “core copyright industries” is because of strict copyright law. That’s provably false. Hell, technically, the revenue that this very site that you’re reading now produces is almost certainly included in that “$1 trillion.” We’re very much a part of the “core copyright industries.” And yet we don’t rely on copyright. At all. In fact, we dedicate all of our content to the public domain.

And it goes beyond that. A significant portion of the revenue they’re discussing actually comes from computer software:

But that’s an industry where there’s tremendous support for changing copyright laws so that there’s less protection and more sharing. The growth of the open source movement, and the fact that it powers so much of what we do today, is hardly an argument for stricter protectionism and ratcheting up copyright laws. But, by lumping them all in as “core copyright industries” and then pretending that means you need strict copyright laws to create that content, Siwek, his funders and their friends get to actually use the innovations and business models that show why stricter copyright may be a bad idea… to argue for stricter copyright law.

It’s not just blatantly dishonest, it’s co-opting the economic activity that disproves their argument to pretend it supports their argument. That Maria Pallante would quote that number and support it suggests serious problems in how the Copyright Office views things today. This kind of report has no business being taken seriously, let alone being used in any policy arguments at all. But, if it is, at the very least, people should point out that, if taken at face value, it pretty clearly shows that the copyright maximalists have been flat out lying about their industries struggling, and how they need things like SOPA, TPP and other legal changes.

Filed Under: copyright, copyright industry, copyright maximalism, core copyright, economic impact, fallacies, stephen siwek, steve metalitz
Companies: bsa, iipa, mpaa, nmpa, riaa