NYT Calls for Stronger Copyright Protection Without Calculating the Costs

Pharrell Williams (photo: Christopher Polk/Getty)

The New York Times (5/31/16) presents musicians like Pharrell Williams as the face of calls for strengthened copyright protections–though only a small percentage of the costs of such protection will end up in musicians’ pockets. (photo: Christopher Polk/Getty)

All New York Times readers know that protectionism is stupid and self-defeating. It hurts everyone involved. So where were all the economic experts to give the usual lines on protectionism in response to efforts to change the Digital Millennium Copyright Act?

The Times reported on these efforts without ever once mentioning the economic costs that would be implied by making listeners pay more money for music and the cost that intermediaries like YouTube would have to incur to comply with stronger copyright protection. The failure to mention these costs is remarkable, given how much space the Times and other media outlets have devoted to denouncing proposals from Donald Trump to impose higher tariffs and plans by Bernie Sanders to chart a different course for trade policy.

Economics works the same, regardless of whether the item in question is a car, a ton of steel or a song. Barriers that raise the price impose costs on consumers and the economy. The biggest difference is that in proportionate terms, the barriers involved with copyright protection are likely to be far larger than any trade barriers that Trump or anyone else might impose on imported manufactured goods. While the latter are unlikely to exceed 50 percent of the sale price, and would almost certainly be far less, copyright protection can make music that would otherwise be available for free very costly.

To get an idea of how costly such protections can be, New Zealand’s government estimated that increasing the length of copyright protection from 50 to 75 years, as required by the Trans-Pacific Partnership, would cost it 0.24 percent of annual GDP, the equivalent of $4.3 billion in the US economy in 2016. It would have been helpful to include some estimates of the costs associated with the stronger protections being discussed in this piece.

It is also worth noting that only a very small portion of the costs associated with this protection is likely to end up in the pockets of the performers. Much of it is simply deadweight loss—the lost benefit that consumers would have had from being able to listen to music at its marginal cost, which they will forego now that it is selling at its higher, protected price. A large portion will go to costs associated with enforcement, including new locks that would be put in place. And much would go to intermediaries in the process, including the lawyers and lobbyists working on changing the law.

It is likely that performers will get less than 10 cents for every dollar of lost benefits to consumers, and their take may well end up being less than one cent per dollar. Unfortunately, the New York Times never mentioned these losses at all, ignoring the well-known benefits of free trade.

Yes, musicians and singers need to be paid for their work, but there are more modern and efficient mechanisms for this task.

Economist Dean Baker is co-director of the Center for Economic and Policy Research in Washington, DC. A version of this post originally appeared on CEPR’s blog Beat the Press (4/30/15).

You can send a message to the New York Times at letters@nytimes.com (Twitter:@NYTimes). Please remember that respectful communication is the most effective.

This piece was reprinted by RINF Alternative News with permission from FAIR.