The Productivity Commission and Term of Copyright
From an Author’s Perspective…
Term of Copyright
To recap: The Productivity Commission in Australia is considering making changes to Intellectual Property Arrangements. Some suggestions in the draft report have some merit. For example, the sharing of information from pharmaceutical companies to help advance research, instead of each company or research institution recreating the wheel. Some suggestions, I fear, don’t. One of the proposed changes looks at copyright, and I’m going to present my understanding of the whole scenario.
*WARNING: this is a very involved and lengthy post.
So, firstly, what is copyright? In Australia, copyright applies from the moment an idea is created. There is an automatic protection applied to all creative works. Please note, that’s not the idea itself, but the documentation, planning, preparation, implementation, production, etc of that idea.
For example, as soon as I start writing a novel, I have copyright of that novel. That means I own that novel, it’s my baby. I’ve spent considerable time and effort (and perhaps cost) in creating that story. That means I, as the owner, can exercise certain rights. For example, I can sign over those rights to a third party (publisher). These rights may include (but aren’t limited to) producing the work in print and digital format, and selling it in….say, Australia. I can specify that, because it’s my work. If a publisher then wishes to sell the ‘work’ in…Estonia, then I can sign over foreign rights, also, and receive recompense. I can sign over rights for the ‘work’ to be adapted into a TV series or movie (from my fingers to God’s ears), or a play – interpretative dance, if I wanted to. But that’s because it’s my right to do so. Copyright means I can sell it, perform it (and be grateful I don’t), publish it, adapt it and communicate it to the public.
So, that’s copyright in a nutshell. There’s a lot more to go along with it, and if you have a spare few hours, you can read the rest of the Copyright Act 1968 for shits and giggles.
At present, the Copyright Act stipulates that I own my work (you know, that work that I spent hours, days, weeks, months and years on) for the duration of my life, and for 70 years after my death. In effect, it’s an asset, that I can will to my family and heirs. Like any other asset – a diamond necklace, a house, a claptrap car that holds more sentimental value than monetary value…it is tangible property. So, if I die, and my contract is in effect with a publisher, those royalties that my ‘work’ earn will be paid to my heirs, and so on, until the end of the contract term, my rights revert, or seventy years pass.
From what I can learn, the Berne Convention set the minimum international standard to life plus 50 years (and Australia has signed this). As per the current AU-US Free Trade Agreement 2004 (and I dare you to read that for shits and giggles), we extended our copyright from author’s life plus 50 years to the term of the author’s life plus 70 years.
So, my first novel, Viper’s Kiss, has a copyright of 2010. For the purpose of this exercise, let’s say my age was 30 (no, that wasn’t my age, we’re doing a hypothetical here). The average age of a woman in Australia is 84.3 years. That means, operating on best case scenario for me, that the Viper’s Kiss copyright is due to expire in 2134 (feel free to check my numbers, I’m a writer, not a mathematician).
Another hypothetical: I’ve written some books, it caught the eye of a Hollywood studio, and they decided to make a movie out of Viper’s Kiss. A few years down the track, there’s a remake, maybe even a computer game (yes, it’s a fantasy, but stranger things can happen). This means that I could quite reasonably earn an income from that book well into the future, and if I died, that income could be inherited by my heirs – like portfolio shares, or the rental and sales from a property development.
Important to note: once copyright expires, the ‘work’ effectively enters public domain, and others can copy and recreate the works without compensation to the rights holder.
Eg; Jane Austen’s works are in public domain, hence anyone can pretty much pick her novel, package it and present as their own work. (Sense and Sensibility and Sea Monsters, etc., but at least Ms. Austen is listed as a ‘co-author’).
The Productivity Commission has specified the following argument:
Numerous studies have attempted to estimate the ‘optimal’ duration of copyright protection. Landes and Posner (2002) argue a term of around 25 years enables rights holders to generate revenue comparable to what they would receive in perpetuity (in present value terms), without imposing onerous costs on consumers and suggests that a term of around 25 years is sufficient to incentivise creative effort.
Methinks 1) somebody has forgotten the minimum standard as set by the Berne Convention, and 2) somebody has neglected to truly look at the cost of books in the market, and author earnings. Certainly, print books attract a higher price, but bear in mind the author receives a percentage only of this price (I outlined ‘standard’ contract values in my previous Productivity Commission and Copyright article)…
Let’s look at print books. We’ll go with a standard of 5% (because it’s easier to work with, and some contracts fluctuate between 4-6%). Let’s go with Australian work, sold in Australia (calculating international sales can be diabolical). And I’ll be putting my hand up and saying yes, there are a number of mechanisms that factor into this, and costs, discounts, etc that can have an affect, but let’s keep it simple, for argument’s sake.
On average, an Australian adult working full time earned $1556.30 per week, as per ABS figures. I’m not even going to address the gender pay gap, as that will just make us all teary. Anyway, average annual income would be $80,927.60. Best case scenario, it took me about a year to write a book (let’s not count the weeks and months of editing, copyediting, proofreading, graphic design and marketing discussions and strategic planning performed by the publisher). If my book sold for full recommended retail price forever (and it doesn’t. It goes on sale, it gets distributed through third and fourth parties, etc), but for argument’s sake, best case scenario. For me to get an average income, at 5% of a standard recommended retail price of a book (approximately $29.99, give or take). That’s roughly $1.50 per book.
This pretty much means I would have to sell 53,952 books. The average print run in Australia is about 3,000 books.
I might need to legally change my name to JK Rowling. To put it plainly, this scenario is NOT AN AVERAGE REPRESENTATION. It’s difficult to obtain figures of numbers of books sold for bestsellers. I’ve seen varying reports of 3,000-5,000 within 24hrs on Amazon, to 4,000-9,000 in the first week to reach the New York Times Bestseller list – but nothing substantiated. Basically, you need to sell a LOT – and if we all reached bestseller figures, well, then, none of us would be bestsellers. BUT, seeing as most authors won’t reach the bestseller lists, it makes the average fall far shorter.
But wait, we now have e-books, with a massive potential for sales, right?
Did you know some books are actually sold at $0.99? (Some are even free, so I don’t class this as a sale, but giving the book away). So we might have higher royalty rates in the digital market, but the sales price is considerably lower. The Author Earnings website has reported on sales figures for some time, and are worth checking out, but their stats show average cost of Big 5 ebooks is in the $9.00-$9.99 range, and for indie/self-published authors its lower at $3.00-$3.99 range. If we look at Amazon pricing and royalty structures, it’s even more of a quagmire to calculate, but you get my drift. It’s going to take a looooooonnng time to sell the amount of books for an author to consider this a ‘just reward’ for the creator – as specified by a judge of the High Court of Australia in a 2009 case.
*Admittedly, this is looking at one single book as having the earning capacity equivalent of a year’s salary, which is not quite the case for most writers. My point is, writers love to write, and if they could make a good living out of it, they would do so. Most writers, based on sales, can’t live solely on their writing income.
We presently have a market that is chipping away at the price of a book already, and minimising the earning capacity (and cost vs value of books is a discussion best saved for another day). With the erosion of book prices in the digital market, and the slowdown of print book sales, authors are already facing a marked reduction in earnings. Fact.
The Productivity Commission is making the following recommendation:
DRAFT FINDING 4.2
While hard to pinpoint an optimal copyright term, a more reasonable estimate would be closer to 15 to 25 years after creation; considerably less than 70 years after death.
Copyright/Book writing 101 for the uninitiated: ‘creation’ is when I start writing the book. If it takes me about 1 year to write it, it can be another year or so before that book hits the shelves, whether that’s in-store or online (lots of editing, proofreading, cover design, etc). So, already I’m looking at 2yrs down out of my 25yrs.
Using my previous hypothetical and adapting it to the proposed change, my first novel, Viper’s Kiss, will have its copyright expire in 2035. At the grand old age of 55 yrs (and this is based on the earlier hypothetical, and by no means implies anyone aged 55 yrs or older is considered ‘old’), that book won’t be mine, anymore. In effect, something that I worked hard at to create will be taken from me within my lifetime. I will no longer receive the ‘just reward’ from it, and anyone else can use it as ‘theirs’, even if I keep producing books and readers want to find my earlier works…
Sorry, but that totally sucks. That would be like a builder designing and building a home, and after 25 years, the government hands the keys over to the public and invites them to move in. That would be like me taking an Elvis song, recording it and selling it as mine.
It would be like me breeding and owning a milking cow, feeding it, nurturing it, administering to it, paying vet bills, etc, and having the potential to create earnings into the future for me and my family- from it’s milk, and then from it’s meat, it’s leather, etc, and then after a certain time the government removes the cow and offers it to anyone who wants it, along with the future earning potential. Basically, depriving me of the reward that comes from the initial hard work. That. Sucks.
As I mentioned above, authors are actually earning less for their work, and now the government is wanting to introduce a mechanism that reduces the length of time we can receive recognition and reward for our work. In effect, reducing our earn-out capability by taking something that belongs to us away from us. This word has been bandied about in various blog posts and articles, and it’s a powerful word, so I didn’t want to use it without realising the full impact of it:
Pretty much all of the Australian states have a similar definition.
In essence, stealing is dishonestly appropriating property belonging to another person without their consent with the intention to permanently deprive that person of their property.
To be clear – I do not give my consent to have my ‘property’ removed from my ownership within my lifetime, and my heirs.
There are mechanisms where parts and/or all of my material can be requested for use.
Just ask. Don’t take – because it’s rude, it’s offensive – and it’s NOT FAIR. (Will look at the Fair Use proposed change in another post – it’s a doozy, and yes, it’s unfair).
I want the option to exercise my right of ownership, as I’m currently entitled.
So this is one issue I have with the recommendations made by the Productivity Commission’s draft report on Intellectual Property Arrangements. I’ll be looking at authors as consumers – the beneficiaries of this report – as well as Parallel Importation Rights, etc. – time allowing.
Please feel free to comment, and if you think I’ve misunderstood these conclusions, or that my conclusions are flawed (and yes, I took a very, very basic approach to some of the calculations), please feel free to educate me – because I think it’s important to understand this draft report and the ramifications for authors. Submissions to the Productivity Commission close Friday, 3rd June. If you’d like to make a submission, click here for instructions on how to do so.