Spin This: Copyright Industries Grow at Twice the Rate of US Economy

A new report released today by the International Intellectual Property Alliance (IIPA) offers the following big headlines for FY2012:  the copyright industries, for the first time, contributed over $1 trillion to the U.S. economy, accounting for nearly 6.5% of GDP; these industries represent nearly 5% of all private-sector jobs (5.4 million) in the U.S.; these industries grew at an aggregate annual rate of 4.73%, which is more than twice the rate of the U.S. economy (2.1%) overall.

So, what are we to make of these numbers?  Or just as importantly, how will copyright’s antagonists spin this report?  They could try to punch holes in the findings themselves, but that seems unfruitful; numbers this big would have to be grossly inaccurate to suggest that copyright industries aren’t a critically important segment of GDP, as has been attempted in the past.  On the other hand, copyright’s foes could spin this report as “See, we told you internet phenomena like piracy aren’t hurting anyone. Look how good things are, you whiners.” But here’s the bottom line I think we should take away from this report and any pollyanna attempts to rebut or redirect its relevance:  copyright works, don’t break it.

Seriously, the only reason I write about this stuff is that a massively powerful — although not so economically valuable — minority of companies  spend a lot of time, energy, and money trying to reverse, weaken, or obliterate IP laws on a global scale; and if nothing else, I happen to think squandering the economic engine fueled by copyright is a really bad idea unless someone can demonstrate precisely why we should monkey with a trillion-dollars worth of GDP.  So far, for all the academic theorizing and economic divination that claims without any evidence that “copyright stifles innovation,” the record is clear that investment in these industries supports economic health, and that should matter to anyone with a job in any sector.  To put that in perspective, if you’re a truck driver, you are at least 5,000 times more likely to be delivering goods to someone who works in a copyright-supported industry than to someone who works for a company pushing to weaken this legal framework.  It should be understood that the antagonists to which I refer are not all technology companies by any means.  To the contrary, this report includes software and other technologies that rely substantially on copyrights.

This afternoon, the House Judiciary Committee resumes deliberations on an ongoing review of copyright; and while there are reasonable grounds for revising this body of law, the process should, in my opinion, be viewed as requiring surgical revisions with particular attention to more robustly protecting the independent entrepreneur in the digital market.  Beyond that, it is hard to fathom why any American would want to needlessly and recklessly tamper with a system that promotes this kind of economic prosperity.  We have enough real problems.  Copyright isn’t one of them.

© 2013, David Newhoff. All rights reserved.

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19 comments

  • Didn’t the CCIA show fair use was $4.7 trillion and Copyright was like $3 trillion ish? And ultimately when the ad models evolve it won’t be a prudent business move to enforce typical copyright and that a sharing economy approach to content usage will become de facto?

    • And fair use or creative Commons are not mentioned in the report, that’s the problem, I would imagine for the literarily minded audience that you think reads this blog, this is the ‘stifling’ innovation issue. Dormant media titles can be resuscitated via creative transformations of expression that could generate revenue, however due to your article’s framing copyright as only an IP issue, whole markets aren’t being developed that could use cable TV ads an expensive framed map to the net. Since whomever the gatekeeper moderating this won’t bother including these insights, it will seem like a happenstance transformation when these inevitabilities occur.

      • All participants need to be approved one time, and then their subsequent comments appear automatically. This a happy medium between allowing comments and not wasting a lot of time deleting a festival of trollish nonsense. By I’m the only “gatekeeper” moderating, and I don’t stay up all night doing so.

        Your thoughts are welcome, Richard, but the idea that there is a “sharing economy” is, so far, pure smoke. People talk about dormant media titles being resuscitated to generate revenue (meaning ad revenue), but take a serious look at the market and at the web so far, and be honest about how many middle-class jobs can be created and sustained on such activity. The biggest sites on the web don’t employ that many people. Even in the rosiest outcome of what you’re describing, are you suggesting cannibalising existing (dormant) media while undermining the mechanism for promoting investment in new works? No good can come of this over time.

        Fair use is a component of copyright, the US has one of the most flexible fair use regimes in the world. So, I’m not sure what you’re driving at. If your example of reusing dormant works is central to your goals, this is simply about copyright terms; and shortening those terms could well be a reasonable, surgical change to the law. Still, I have strong doubts that rolling back copyright terms 10 or 20 years is going to stimulate real economic opportunity; and I know for sure it isn’t what Google et al are after.

      • Didn’t the CCIA show …
        http://www.wired.com/images_blogs/threatlevel/2010/04/fairuseeconomy.pdf

        No. When I and the other 1000 employed on this site use a computer at work we are creating copyright software there is no fair-use employed in the process or what is is minimal. When I turn my speakers on, or car CD player I’m playing copyright music there is no fair-use being employed. When I use a camera there is no fair-use being employed when I take photos.

        The CCIA lumped a whole bunch of things together where some fair use could conceivable be employed in some application and said that all usages were fair-use. In reality fair-use is minimal.

  • I don’t trust their methodology. Making money by producing things that are copyrightable is not the same as making money from the “legal protection” (roflamo) afforded by copyright. For instance, Google is ENTIRELY an “IP”-based organization but I’m sure it would be hard for you to say that if copyright didn’t exist they’d have no business… 🙂

    • Google wouldn’t exist without patents, and yet is shamefully leading the charge to revise patent law in its favor as well.

      • Oh they would exist with patents. Historically, Google hasn’t been known as huge fans of the patent system. You’ll also notice that Google is missing on the letter sent to Congress opposing software patent reform. The pro-patent’ers in the tech community are the “old guard”, the IBMs and Microsofts, big and old companies with huge patent portfolios. Newer Silicon Valley companies tend to be strongly anti-patent, and the main entities driving patent reform right now.

        Patents are not a good way to protect actual important/competitive technology at all. Because in the patent itself, which is public, you must perfectly describe your invention. It’s an invitation for anyone to copy you, if they can do it a way that you won’t know about or in a country where the patent is invalid anyway.

        If you can keep your inventions secret, you’ll be much better off. That’s what Google does: all the details about how their search engine works isn’t publicly known. It’s running on their servers, you never get to see anything but the end result.

      • Dude, the original algorithm that became Google was patented, and its sale earned Stanford a couple hundred million. And now that they have theirs, they want to change the system to suit their world view and bottom line. The pro patent companies are the majority of companies in the country. The “reform” crowd are a tiny group whose wealth is through the roof, but whose economic value is questionable.

      • True Google’s economic value is minimal. It is probably even negative. What it has done is displaced economic activity that would have taken place anyway and in the process destroyed businesses.

  • Even further analysis of the report:

    – Books and magazines are barely higher then statistical noise. If we disregard copyright on books and magazines, you can put them all on the Internet for the whole world to access: a massive digital library if you will. This would be a couple billion dollars in “economic damage”. Keep in mind, this is based on the numbers from THEIR VERY OWN REPORT, a report written by an organization with every interest in promoting the cause of copyright.

    – Software is the largest “copyright” sector by a huge margin. Software is usually sold B2B (business-to-business) – one of the few places where copyright still sort of works. Software can also be sold “as a service”, which totally does not rely on the legal protection of copyright. So not surprising. Probably this is also what is inflating the numbers for salaries too.

    • M wrote: “If we disregard copyright on books and magazines, you can put them all on the Internet for the whole world to access: a massive digital library if you will. This would be a couple billion dollars in “economic damage”….”

      If you wish to have MORE books and NEWER creations, copyright is the mechanism; Copyright is the vehicle; Copyright is the INCENTIVE.
      What incentive, in a world without copyright, would ANYONE have to publish/ make available their works?
      I tell you, I wouldn’t stop creating in a world without copyright, but I WOULD STOP PUBLISHING.
      If you’re happy with the status-quo of entertainment, knowledge, research, creation and want progress to grind to a halt, getting rid of copyright would serve your goals…

    • Take news reporting. It takes 100s to put a journo in place with the requisite support network. Without it you get wikinews and RTV.

    • M wrote:
      “Software is the largest “copyright” sector by a huge margin. Software is usually sold B2B (business-to-business) – one of the few places where copyright still sort of works.”

      Do those numbers for the software sector include console/computer games and apps?

      As for B2B transactions being one of the areas where copyright still works, that might have something to do with the hefty penalties for companies who infringe the copyright. i.e. there is enforcement of those copyrights.

      • It’s also easier to catch B2B copyright infringement, especially as the size of the company increases. It takes just one employee to rat you out, and software companies pay substational rewards for it.

        Every time you buy a computer with Windows, a non-trivial amount of money you paid for the computer goes to Microsoft. When you think about a company like Microsoft doing business with huge companies like Dell and HP, you are paying for Windows if you like it or not. But the key thing is not directly, it’s in the price of computer itself. So there isn’t as much room for copyright infringement.

      • Last time I got a computer from DELL they asked me whether I wanted Windows on it.

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