On Incentives in Copyright Theory: Are the Distributors Welcome to the Spoils of Copyright?
The 2023 writers’ guild and SAG-AFTRA strikes highlight rampant exploitation and distributional wealth inequality in the content industries. There are a variety of reasons for the dominance of corporations over creators and the public. It is an opportune moment to unmask copyright law as a tool of monopoly. The popular conception of copyright is that it acts to incentivise and reward creators. However, corporations ultimately acquire the copyright and seize the benefits intended for creators.
Copyright law should accommodate creators, consumers and distributors with their respective positions and desires.[1] It is contemplated that creators require ‘reward’ in the form of incentives, protection and, impliedly, income.[2] This is in part explained by natural rights theory or the labour-desert theory.[3] Despite the complexity of balancing various interests, it is clear that copyright was designed to bestow specific benefits on authors among other parties.
If we fast-forward to the current market for digital video content, the benefits designed for authors are not owned by authors. Rather, the major production companies and distributors own the copyright – ‘corporate copyright’. The original creators of the content, by law[4] or because of industry norms and practices,[5] assign the rights given to them under copyright to the production companies and distributors. The production companies and distributors are empowered to control, and profit greatly from, the copyright. The creators may be paid for their rights, but concerns are raised when a system designed for creators inevitably supports the monopolisation of video content. The platforms reap the spoils of copyright law, despite not being the vulnerable creator contemplated by copyright law as requiring substantial protection and incentives. These are the same industry actors who are currently being exposed for vast distributional wealth inequality and exploitation in the SAG-AFTRA and writers’ strikes. It is inappropriate that they receive the benefits and the majority of profits from copyright. Copyright law has been silent on potential exploitation and power imbalances in the content industries. The law has been generally forced onto digital video content without consideration of the nuances of the video streaming industry. The divergence between the purpose of copyright and the practical outcomes raises concerns. It indicates that the purpose of copyright, with respect to authors, is not being implemented because of the legal position and power imbalances.
For clarity, distributors assume great risk in the content industry,[6] and are ‘the central segment in the value chain’.[7] They put our favourite content in front of us for consumption. The SVOD platforms are a major actor in the market. It is clearly justifiable, on utility and equitable grounds, that corporations reap spoils from their investment or distribution. However, the principal ‘labour’ of producing the content is exerted by creators, the individuals. This is what is contemplated by copyright law. The distributors facilitate, rather than originate the creative process. Is it possible that the proportion of value gained by the SVOD platforms and production companies through corporate copyright, to the detriment of the public and other parties, is too great? As discussed in a previous entry, the distributors should have responsibilities to the public when they market access to cultural heritage.[8] Profiting from investment is fair and should be protected – profiting in great excess of one’s contribution, while harming the public and creators, is exploitation. My project examines how copyright empowers the SVOD platforms as distributors to reap exuberant spoils from the public by limiting access to cultural goods. An additional side-effect of this power imbalance is distributional wealth inequality in the content sector, but this exceeds the scope of the project.
It has been said that we must interrogate legal positions and their practical outcomes.[9] Institutions have largely stayed silent and operated laisse faire during the SVOD revolution, not just in relation to copyright but also in broader platform regulation. For example, the SVOD platforms are not bound by local content rules.[10] The SVOD platforms remain largely unregulated, especially in comparison to television.[11] The SVOD platforms have assumed great significance in our lives and their substantial cultural power must be regulated. For television, spectrum regulation and licences are employed as a tool for effecting policy outcomes.[12] Regulating the SVOD platforms will require different tools to television.
My project is concerned about the legal and practical outcomes for the public in SVOD platforms benefiting the most from copyright. So what do we do about it? A connected question is ‘What regulatory tools are best suited for shifting the balance towards the public and original creators of content?’ For the sake of my project, the focus is on the rights of the public to access works. Although, the issues of distributional wealth inequality are also linked to and have effects on creators as well. Whilst my project focuses on the rights of the public in the copyright bargain, the work may prove useful for research into the rights of creators. The project will investigate whether a compulsory licensing scheme could be a viable vehicle for rectifying issues of public access to video content. The clear benefits of such a scheme, and the plethora of issues raised, will be deconstructed in time.
References:
[1] L Ray Patterson and Stanley W Lindberg, The Nature of Copyright: A Law of Users’ Rights (University of Georgia Press, 1991) xi.[2] Ibid 79.[3] Wendy J Gordon, ‘Property Right in Self-Expression: Equality and Individualism in the Natural Law of Intellectual Property, A’ (1992) 102 Yale Law Journal 1533, 1535; 1542 (‘Property Right in Self-Expression’).[4] Copyright Act 1968 (Cth) 98(3)-(5).[5] T Wu, ‘Copyright’s Communications Policy’ (2004) 103 Michigan Law Review 278, 339.[6] Gabriel Natividad, ‘Financial Slack, Strategy, and Competition in Movie Distribution’ (2013) 24(3) Organization Science 846, 848.[7] Ibid.[8] Gordon (n 63) 1556.[9] Jessica Litman, ‘Revising Copyright Law for the Information Age Symposium: Innovation and the Information Environment’ (1996) 75(1) Oregon Law Review 19, 28 (‘Revising Copyright Law for the Information Age Symposium’).[10] Graeme Turner, ‘Netflix and the Reconfiguration of the Australian Television Market’ (2018) 5(2) Media Industries Journal 133 <http://hdl.handle.net/2027/spo.15031809.0005.208>.[11] Ibid 132.[12] Convergence Review: Final Report (n 60) 91.