Value of Fair Use

May 1, 2010

I’ve posted a couple of notes here in the last few weeks about  copyright, and how it seems to have gotten rather far away from its original limited scope.  The content-producing industry — the people that produce movies, music recordings, and publicaitons, and their trade groups, like the RIAA and the MPAA — are always pushing for greater protections of longer duration to be built into the law.  In support of their position, they present studies which posit large economic losses to themselves due to illicit copying of protected works.  The Government Accountability Office and I have both expressed some considerable skepticism about the resulting numbers.  One of the key problems with the analysis in these industry studies is that they assume that money not made by the content producers just disappears.

Now Wired has a report that another industry group, the Computer and Communications Industry Association [CCIA], has published a study that examines the economic impact of “fair use” provisions in the copyright law.  These provisions are statutory exceptions to the legal monopoly on copying granted as part of copyright.  Along with other provisions of the copyright law, they are contained in United States Code, Title 17.   Most of these fair use exceptions either codify accepted practice (for example, quoting short passages from a book in a review), or allow copying that is necessary for functional reasons (copying a computer program into the machine’s memory in order to run it).   There are  numerous legitimate activities that depend on fair use:

Fair-use-dependent industries include educational institutions, search engines, web hosting providers, software developers and device manufacturers, among others.

The study, which can be downloaded here [PDF], estimates that fair use businesses contributed $2.2 trillion in value added to the US economy; it estimates that these businesses employ more than 17 million people.

I have not read all of the report yet, and I don’t suggest that anyone take these figures as Received Truth, any more than they should the figures from the content industry’s studies.  Members of the CCIA include firms like Yahoo! and Google, who are not disinterested observers in this debate.

The most important thing to realize is that trying to measure these effects is a very complicated business, and the results one obtains are very significantly affected by assumptions made along the way.  The world is generally not a one-dimensional sort of place.

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