Are US copyright industries doing poorly?

Apparently not! According to a recent report from the International Intellectual Property Association US copyright industries are in fact booming compared to US GDP. Ars Technica picked up the issue and highlighted it in this article recently.

So what’s this all about?

The IIPA recently released a commissioned report (the twelfth in the series) on the performance of US “copyright industries” compared to the US GDP. According to the report, the copyright industries continue to boom, contributing disproportionally to the US GDP and, with continued vigilant fight against copyright infringement, see a rosy future.

It’s a convenient conclusion. And it may be true. But it’s just not possible to tell from the information examined by the report.

The report first groups industries based on whether a significant proportion of the goods they sell would qualify for copyright protection. If most of an industry’s goods would qualify for copyright protection, then it’s part of the “core” (such as movies, music and software). If an industry sells goods which only partly qualify, then it’s part of the non-core copyright industries. Performance of the core and non-core industries is then measured and compared to GDP.

Ars Technica points out some issues with the numbers and comparative growth rates. However, there is a much more fundamental issue before you even get to the numbers.

Inclusion in the core and non-core categories should be based on the extent to which copyright protection actually contributes to or detracts from the business performance. It’s a much harder question, but only then can you start to discuss the contribution copyright regulation makes to the economic performance of a country. For example, there would be significant service related revenues from elements within the core industries which do not rely on copyright. There are also business models which rely on fair use, or are even disadvantaged by copyright, but still within the core. Finally there are also businesses which qualify for copyright protection, but which do not benefit (as significantly as they should) due to the practical difficulties of enforcement. It’s difficult to justify the those elements being counted towards an overall “copyright performance” measurement. Finally, as a measurement, the Gross Domestic Product includes a number of factors which are not directly relevant to copyright including, for example, government spending. It’s therefore not clear exactly what the comparison of “copyright industry” revenue compared to GDP actually means in practical terms – variations in unrelated issues like heath care and defence make the comparison meaningless without a very detailed explanation for cause and effect (which may have been prepared, but wasn’t included).

It will be interesting to see how the report is framed as the global financial crisis has a larger than normal impact on GDP independent of material changes to copyright regulation, enforcement or infringement.

(Photo credit: treadrinker)

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