Earlier this decade, production studios and music labels didn’t much want to hear what Harvard Business School professor Felix Oberholzer-Gee had to tell them. While the entertainment companies claimed that unauthorized file-sharing was robbing them and their clients of income, Oberholzer-Gee’s research showed little relationship between piracy and CD sales.
Now Obherholzer-Gee and collaborator Koleman Strumpf return with new research to challenge another shibboleth: Copyright protection motivates artists to create, and lack of it dissuades them.
In fact, looking at recent history, there is no proof artists are creating any less even though digital technology has weakened copyright protection. As the authors note, millions of people this decade have downloaded or shared billions of copyrighted books, movies, and songs, for which the creators were not compensated.
The result?
- From 2002 to 2007 publication of new books increased 66 percent.
- Since 2000 the annual release of new albums has more than doubled.
- Since 2003 worldwide feature film production since 2003 is up by more than 30 percent.
Apparently, weakened copyright has benefited society, Obherholzer-Gee and Strumpf argue in a recent working paper, File-sharing and Copyright.
Why has file-sharing not dented the motivation of artists? The researchers provide three possibilities.
- Cannibalization of sales due to file sharing has been overstated.
- File sharing increases demand for complements to protected works such as concerts, raising prices and adding to artists’ incomes.
- Monetary incentives play a reduced role in motivating authors to remain creative.
“The policy discussion surrounding file sharing has largely focused on the legality of the new technology and the question of whether or not declining sales in music are due to file sharing. While these are important questions, the debate has been overly narrow,” the researchers conclude. “Copyright exists to encourage innovation and the creation of new works; in other words, to promote social welfare. The question to ask is whether the new technology has undermined the incentives to create, market, and distribute entertainment.”
(Tape recorder photo by Jen SFO-BCN, CC 2.0)

