Landes and Posner argue in their article “Indefinitely Renewable Copyright” that an indefinitely renewable copyright is more economically efficient than allowing limited copyright duration and eventually allowing creations to become public works. As Ryan Friedl discussed in an earlier post, one fear of public domain works is that the commercial value of works will deteriorate from congestion and overkill. Another concern is that publishers will not have the incentive to rediscover old works and attempt to publish them because of the “free rider” effect it could create. However, as we discussed in class, it appears the free rider problem may be defeated with the help of time and a little creativity.
The basic premise behind the free rider concern is that there are relatively few old works that are capable of making a profitable resurgence in the market and it can be very costly to do the initial testing and research to discover theses works. Posner and Landes suggest this initial spending would be futile since once a work is found to be profitable any free rider may skip initial research and testing costs and go straight to publishing the new work for a profit. Landes and Ponser use the following example to illustrate this point.
Suppose an enterprising publisher has only a 20 percent chance of success with obscure public-domain authors. He publishes the works of five such authors in order to have one success. In the absence of copyright protection, other publishers can wait and see which author sells and then bring out their own version of his works. Publishers who wait avoid the costs of failure, but their free riding on the market information developed by the first to publish reduces the incentive of any publisher to search for potentially successful public domain works. The tendency would be for only works of already well-known and safe authors whose works were in the public domain to be published.
At first blush, their rationale seems very logical and potentially troubling for the vitality of rediscovering lesser known authors in the public domain. However, there are some potential ways of defeating the free rider problem and still making it profitable for publishers to expand the time and money to rediscover past authors. The culmination of the first mover advantage, thin copyright, and extras could provide publishers the incentive to rediscover works, despite potential free riders.
The first mover advantage is the concept that there will be an initial surge when a work becomes popular and there is a time lag before another publisher can publish a copy of the same work to compete with the initial publishers’ sales. This initial surge period will produce high sales at the outset, potentially high enough to make a worthwhile profit from the get go. Further, the time lag will restrict competition with your sales for hopefully a sizeable period. While the turnaround time to publish a work can be relatively short, the time is typically proportional to the quality as well. So the faster the competitors work is released, the lower the quality may be. The competing work may not even take away many sales because the quality is not very high and people are willing to spend a little more or even the same price to get the nicer version. If competitors wanted to compete, it would seem they would need to create a work of similar quality, which would take more time – more time in which the initial work has to sell without any competition.
The next aid is a thin copyright. The thin copyright will protect the format of the work you publish including the style, any new art, revisions made to the work and other nuances that make your version unique. The oft used adage, “you can’t judge a book by its cover” may be very true, but when it’s the same book, you might as well get the one that looks nicer. It would seem the use of better cover art on a book or DVD folder will entice people to buy your work over the same thing without the great designs. Also, tying in with the time lag, it is doubtful and free rider will be able to expend the time or money to produce original cover art or other unique attributes to his version, thus maintaining the initial works appeal. Plus, hopefully the first work will be of better quality – whether it be nicer paper, better DVD media, clearer words, better font, etc., which will maintain the original works luster on the shelf.
Obviously, if your work is priced way higher, there will come a point where no matter how pretty the pictures are people will not buy your version. However, it would seem there is a certain threshold where your version with the pictures or other particularities would make it worth the little extra money.
Another feature that could preserve the initial works vitality is the creation of extras. Extra footage, alternative endings, biographies on the author, pictures or anything else that would make your work unique and more appealing than a cheap knockoff. Granted these extras might take more time and money upfront, but they could enable long term success as opposed to reliance on just the initial boom and time lag.
A final concept could be the spin you put on your version. The initial creator can plug and market the extras, making any other version completely inferior and a waste of time. He can also market his book as the original republishing – not to buy cheap imitations or knockoffs. I’m sure there could be a ton of different angles publishers could take to hype up their version of work over another.
It appears that free riders may pose a problem as they do force the initial publisher to really make a unique and quality product. However, these characteristics would seem very beneficial long term and to make the most out of the initial surge as well – people like better products. We live in a competitive market where there are many similar products out there that compete with each other. It really just comes down to who sells their product better and takes advantage of the situation. It seems the initial publisher just needs to take full advantage right away and he will be just fine in outlasting the free riders.
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