Could copyright encourage creativity?
This past summer Anish Kapoor, the creator of Chicago’s ‘Cloud Gate’ bean sculpture in 2006, demanded that the Chinese government take action against the town of Karmay in northwest China, which had unveiled a sculpture that looks remarkably similar to Kapoor’s bean.1 “It seems that in China today it is permissible to steal the creativity of others”, the artist complained. Unlike in Europe and the US, copyright protection is extremely low in China and many other parts of the world, and instances of piracy, such as in the case of the famous bean, are widespread.
Could the adoption of basic copyright laws in these countries encourage creativity? Analyses of piracy in popular music indicate no significant effects of copyright violations on sales or the quality of recorded music (Oberholzer-Gee and Strumpf 2007, Waldfogel 2011a,b). But data constraints and the paucity of experimental variation in modern copyright laws make it difficult to identify the effects of adopting basic levels of copyright protection.
New evidence on adoption of copyright laws: Italian operas
In recent research (Giorcelli and Moser 2015), we exploit quasi-experimental variation in the adoption of copyright laws – as a result of the timing of Napoleon’s military victories in Italy – to examine the effects of basic copyright protection on the quantity and quality of creative output. Lombardy and Venetia adopted copyright laws in 1801 after they fell under French rule. Due to the timing of their annexation, these two states remained the only ones in Italy to offer copyright until 1826, while six other Italian states continued to offer no copyright (see Figure 1).
Figure 1. Map of Italian states that adopted copyright law in 1801
Notes: In 1801, after falling under French rule, Lombardy and Venetia adopted the French copyright law of 1893. Other Italian states, which came under French influence after 1804, did not adopt copyright laws until the 1820s.
To measure how creative output responds to copyright laws, we have collected a new dataset of 2,598 operas that premiered across eight Italian states between 1770 (the beginning of the Italian bel canto period) and 1900 (the end of the verismo period and the Italian ottocento).
Comparisons of new operas per state and year reveal a substantial increase in the number of new operas in states with copyright (Figure 2). Baseline estimates indicate that Lombardy and Venetia produced two additional operas per year compared with other Italian states after 1801, which implies a 150% increase. Analysis of the full dataset – including all copyright adoptions until 1900 – implies that states with copyright produced 2.7 additional operas a year compared with other states. Relative to a mean of 2.2 new operas per state and year, this implies a 120% increase.
Figure 2. New operas per state and year in Italy, 1780-1821
Notes: Data include 478 new operas that premiered between 1780 and 1821 within the year 1900 borders of Italy. We have collected these data from Loewenberg (1978), Dassori (1903), and Ambiveri (1998). Lombardy & Venetia adopted copyright laws as part of a broader packet of French laws in 1801, after they had fallen under French rules. Other states include Sardinia, Parma and Piacenza, Modena and Reggio, the Papal State, and the Two Sicilies.
Was this increase in output driven by low- or high-quality creative work? If the existence of basic copyright laws increases the profitability of creative output independently of quality, their adoption can reduce average quality by raising low quality output above the threshold of profitability. If, however, the copyrights laws give composers intellectual property rights in repeat performances, they can strengthen incentives to create durable work, and increase average quality.
Moreover, if copyright laws raise the income of composers (see, for example, McGarvie and Moser 2014) they may free up some of their time to create higher quality work, and thereby increase average quality. Scherer (2004), for example, reports that Guiseppe Verdi felt that the existence of copyright protection freed him from creating new low operas like a “galley slave”.
Measuring the quality of output
An exceptional wealth of historical records on operas allows us to create alternative measures for the quality of operas, based on their historical popularity and durability. A variable for historical popularity captures operas that entered a standard work of notable performances between 1597 and 1940 (see Alfred Loewenberg’s Annals of Opera from 1978, which includes 245, or nearly 10%, of the operas in our dataset).
- Analysis of these data implies a five-fold increase in the creation of historically popular operas in response to the adoption of copyright.
An alternative measure captures the creation of exceptionally durable operas that continue to be available as full-length recordings on Amazon today.
- Analysis of these data indicates a ten-fold increase in response to the adoption of copyright laws.
Comparisons of composers’ places of birth and the places of premieres further indicate that the creation of copyright encouraged composers to move to Lombardy and Venetia after 1801. Even though native composers also began to produce more operas after 1801, immigrants produced the majority of additional operas in these two states after 1801 and they accounted for a disproportionate share of high quality operas.
- Overall, our findings suggest that offering some basic level of copyright protection can increase both the quantity and quality of works that create revenue through repeat performances.
But these effects appear to be limited to the first introduction of copyright laws; there is no clear evidence of any effects of extending copyright beyond the duration of a composer’s life (Figure 3). This is consistent with data on repeat performances, which indicate that 37% of operas are only performed in the year of their premiere and 47% of operas are performed only within the first five years (Figure 4).
Figure 3. Performances in the first 100 years after the premiere of an opera for all 8 states and operas that premiered 1780-1800
Notes: Performances per year for the first 100 years since the premiere for 165 operas that premiered across Italy between 1780 and 1800 (from Loewenberg 1978). Performances to the left of the vertical line would be on copyright under a regime of life + 10, which Lombardy and Venetia began to offer in 1801. The expected length of copyright under life + 10 equals 39.23 years: 10 years plus the expected remaining years of life for a composer in the year of the premiere for 705 composers and 2,598 opera that premiered between 1770 and 1900 (29.23 years). See Appendix Table A1 for life table calculations of remaining years of life. Expected lengths of copyright for life+12 (41.29 years), life+30 (49.23 years), and life+40 (59.23 years), are calculated in the same way as life + 10.
Figure 4. New operas premiered per state and year in Lombardy and Venetia, 1820-1900
Notes: Data include 580 new operas that premiered between 1820 and 1900 in Lombardy and Venetia. We have collected these data from Loewenberg (1978), Dassori (1903), and Ambiveri (1998). The vertical line corresponds to the bilateral Treaty between Kingdom of Sardinia and Austria that extended copyright length from life+10 to life+30, and Italian copyright law of 1865 that extended copyright length from life+30 to life+40.
This suggests that extensions in the length of copyright beyond the duration of the author’s life create a negligible increase in income for the average author. Instead, copyright extensions only benefit the authors of an extremely small number of exceptionally long-lived works. To the extent that it is difficult to predict which types of works will continue to be popular 100 years after their original creation, copyright extensions are unlikely to encourage rational investments in creative work.
More generally, our results suggest that narrowly defined intellectual property – in the form of copyright – can encourage innovation. This finding contrasts with historical evidence on more broadly defined intellectual property rights such as patents, which suggests that policies that weaken patents encourage innovation, while policies that strengthen patents discourage innovation (Moser 2013). For example, my analyses of 19th century innovations indicate that the adoption of patent laws may affect the direction, but not the level of creative work (Moser 2005).
Intuitively, the narrow scope of copyright, which protects an individual expression of a work, prevents a key problem with patents. When patent rights are broad and their boundaries are poorly defined, innovators are at risk of unintentionally infringing on existing intellectual property, and patent examiners may issue overlapping patents for the same invention. These characteristics of patent laws increase the risks of litigation and discourage innovation. Comparison of patents and copyright suggests that intellectual property policies that reduce the breadth of patents (for example, by disallowing patents for abstract ideas) can encourage innovation.
Kaufman, T (2005), “Loewenberg: Annals of Opera, 1597-1940”,Opera Today, January 5, 2005.
Giorcelli, M and P Moser (2015), “Copyright and Creativity: Evidence from Italian Operas”, presented at NBER conference on Economics of Digitization, March 2015 (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2505776).
Loewenberg, A (1978.), Annals of Operas (1597-1940). Oxford University Press, 3rd edition rev. and corrected. First published 1943; revised 1955.
Li, X, M MacGarvie, and P Moser (2013), “Dead Poets’ Property - How Does Copyright Influence Price?”, SSNR Working Paper.
MacGarvie, M, and P Moser, ed (2013), “Copyright and the Profitability of Authorship”, Forthcoming in A Goldfarb, S Greenstone, and C Tucker. The Economics of Digitization: An Agenda.
Moser, P (2005), “How Do Patent Laws Influence Innovation? Evidence from Nineteenth-Century World Fairs”, The American Economic Review, Volume 95(4): 1214- 1236.
Moser, P (2013), “Patents and Innovation – Evidence from Economic History”, Journal of Economic Perspectives, Volume 27(1): 23-44.
Oberholzer, F and K Strumpf (2007), “The Effect of File Sharing on Record Sales: An Empirical Analysis”, Journal of Political Economy, 115 (1): 1-42.
Scherer, F M (2004), Quarter Notes and Bank Notes: The Economics of Music Composition in the 18th and 19th Centuries. Princeton University Press.
Waldfogel, J (2011a), “Bye, bye, Miss American Pie. The Supply of New Recorded Music Since Napster”, NBER Working Paper 16882.
Waldfogel, J (2011b), “Copyright protection, technological change, and the quality of new products: evidence from recorded music since NAPSTER”, NBER Working Paper 17503.
1 To see pictures of both sculptures, see http://www.bbc.co.uk/news/entertainment-arts-33886678.