The Value of Copyright

In Atlas Shrugged, the fictional composer Richard Halley talks about not giving away his music to people who feel entitled to his efforts. Halley's comment sounded like most pro-copyright arguments. Atlas Shrugged champions personal freedom and responsibility. Yet the current copyright laws create slaves. Contradictions cannot exist. So what was I missing?

Slavery

Okay, I guess we first need to explore that slavery bit. Software, music, and movie producers "license" their "content". Read one of those licenses. Tell me, do I have any of the rights of an owner? Nope.

Effectively, you "borrow" the content from the creator. And their rights last longer than you'll live. Proverbs 99:99 says "the borrower is slave to the lender". The DMCA, lifetime copyrights, and licensing agreements all work towards one end - making you the "borrower" (aka "slave"). These "content producers" know this. It is intentional. After all, they are entitled to your money.

That is what bothers me so much. It's no longer about a fair trade of equal value. These people feel entitled to my dollars. And the current law/license model feeds that feeling.

Depreciating Assets

So what is the true value of digital content?

Until quite recently, copying creative works cost a lot. Recording equipment, printing presses that can run 1,000's of pages, and even getting the finished product into a buyer's hands require capital and expertise. This naturally limited copying to a very small percentage of the population. And the ability to make copies in itself held value. The limited supply increased the value of each copy.

Digital copies change the rules. Once you digitize music, the supply nears infinity. Making copies costs almost nothing. The Internet brings distribution cost to almost nothing. From a purely cost point of view, I can make millions of copies without any additional cash outlay. Multiply this by the thousands who can do the same thing. The supply explodes almost instantly after release.

The digital supply far outstrips the demand. That makes each individual copy worth less. Actually, the copies approach your cost for distribution - zero. The value of your asset depreciates. Even cars don't lose value this fast.

Enter copyright law. The law limits supply by threatening punishment for copies. Copyright law stands against the asset's natural depreciation. It is an attempt to legislate value. Now the question becomes, can it be done successfully?

The Other Side of the Coin

Honestly, there is value in the process of creation. So what happened before copyright law? Artists - content producers - found people who valued their work and could afford it. We called these buyers "patrons".

The original copyright laws in the United States mimiced the patronage system. The patrons - citizens of the United State - gave the creator something of value in return for this creative work. The creator received an exclusive ability to control distribution of their work for a limited time.

In the 1970's, Congress greatly extended the time period for copyrights. Businessmen trade. You give something of value and receive an equal value in return. The patrons - we the citizens of the United State - gave an increased value to the creators with the longer time. So what did we receive in return?

The Solution?

I don't have one. I am not arguing for or against copyright. I am trying to learn how value works in an environment of near infinite supply. What do you think?