Copyrights and the new information economy

Joan Cheverie1 differs with Yochai Benkler2 regarding the changes brought by digital technologies. Although both authors believe that computer networks provide cheap distribution of information, they disagree about the importance of copyrights and other intellectual property protection.

According to Cheverie, copyright systems have been balancing incentives and the public domain. Until now, they have been effective tools to allow authors to profit from their work, but the ease of distribution provided by the internet has made them less efficient. Cheverie believes that the copyright system will have to expand or publishers may have to create ‘digital fences’ to preserve the incentive to create. However, she thinks that digital fences will also enclose portions of the public domain. The author emphasizes that changes in technology or law may reduce the importance of libraries, which have been offering free education, research and content legally.

Conversely, Benkler points out that the majority of businesses don’t depend primarily on copyrights or patents to derive benefits from their research investments. The author shows that there are nonmarket sources (ex: government agencies) and market actors that don’t rely on intellectual property rights. He uses the newspaper industry as an example because their revenues from copyrights are very small compared to advertising and sales at newsstands or subscriptions.

Benkler also writes that there is a little support in economics for regulating information using intellectual property laws: “In the overall mix of our information, knowledge, and cultural production system, the total weight of these exclusivity-based market actors is surprisingly small relative to the combination of nonmarket sectors, government and nonprofit, and market-based actors whose business models do not depend on proprietary exclusion from their information outputs” (pp. 41). He cites other strategies to produce information that do not depend on patents or copyrights, such as “Scholarly Lawyers” who write articles to get clients (pp. 43). Benkler believes that the networked environment allows people to adopt cooperation strategies rather than accept proprietary claims.

1 Cheverie. J. (2002), “The Changing Economics of Information, Technological Development, and Copyright Protection”. Washington, D.C: The Journal of Academic Librarianship 28 (5), pages 325-331.

2 Benkler, Y. (2006). The Wealth of Networks. New Haven: Yale University Press.

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14 Responses to Copyrights and the new information economy

  1. […] * Raquel – [Joan Cheverie in “The Changing Economics of Information, Technological Development, and Copyright Protection”] Copyrights and the new information economy […]

  2. Rubi Romero says:

    It is true that both authors, Cheverie and Benkler have a good point in regards to digital technologies bringing changes and how both authors differ about these changes. On one hand there is Cheverie that states that copyright balances the incentives, allowing authors to make a profit from their work. In addition, she mentions how digital technology has made distribution easier and cheaper (sometimes even free of charge) which is good for the authors. On the other hand there is Benkler who states that most business don’t depend on copyrights to make their profits, he points out government agencies as an example.
    I think that both points are very important depending who you ask about this. For example, when Cheverie mentions about copyright allowing authors to make a profit, I think she refers to individual artists. And when Benkler says that most businesses don’t depend on copyrights to make their profits he doesn’t refer at all to individual artists, but business like newspapers.
    I think that copyrights are necessary to protect work from piracy and the rights of the author to get compensated for their work. As Cheverie mentions on her article that the role of copyright is to facilitate the consensual exchange of goods. If an author is paid for his/her work is most likely that this author will be motivated to keep creating quality work. Therefore, the consumers have access to quality and quantity and the author gets compensated for his/her work.
    If copyright all of the sudden disappear, that means that piracy will disappear as we know it, remember that a lot of people don’t have the equipment to have access to the free of charge content, therefore the middle man “piracy” may still be needed. But what about the right of the author to get paid for his/her work, instead the piracy people will be benefited without any punishment. That’s why I think that copyright law is necessary to protect the authors. I think if someone should be paid, is the author not the piracy people.
    On the other hand, copyright in regards to business is another subject. For example Disney, how much is enough? I don’t have the answer to that, as much as I want individual authors to be protected from piracy, I don’t feel the same way about companies like Disney to keep making millions of dollars…

  3. pmottola says:

    Cheverie bases her article on the notion that “Information is, simultaneously, both an economic commodity and a societal resource.” She expresses concern that as “digital fences” are raised to protect the copyrights of digital goods, the transactional costs will be raised resulting in limited access, distribution and societal benefit. She also recognizes the incentive copyrights produce for content creators. The article is well-rounded in these points.

    However, Cheverie’s prediction that libraries will be undermined by increased digital access is shaky. She provides little evidence beyond speculation. With piracy of copyrighted materials so rampant, people do have more access, but use of that information in business or education requires legal validity. For this reason, copyrights and libraries are still useful. Further, while competition with libraries for accessing information has increased, there’s no evidence that the use of libraries has decreased, or recognition that library systems have adopted their own online databases to compete.

  4. peterlux says:

    I agree with Rubi that individual content producers and companies have different needs for copyright protection. Profit-driven companies rely on copyright as a way to protect their products from piracy, and thus to safeguard potential revenues (how much protection they deserve, and for how long, is debatable). But overall whether or not copyright is guaranteed may have limited impact, as Benkler points out, on their overall revenue stream. As such copyright protection is just one element in the set of incentives that form the basis of the decision whether or not to create and disseminate information.
    For the individual content producer, it seems to be more of an all or nothing all situation: either they get paid sufficiently for their work to provide an incentive to produce more content; or the benefit of producing content isn’t sufficient to cover their investment of time and energy. As Cheverie says, “if creators were given no rights to benefit from their work, they would likely receive little revenue, and would then lack a certain level of incentive to create.”
    However, in the digital economy, this distinction isn’t as clean cut. Frequently, bloggers are writing their posts for free, but use the free content to lure in future clients, be it purchasers of books, or companies that will pay for their services (writing, consulting, or otherwise).
    As Racquel mentions, Benkler suggests that in the network economy, the distinction may become even less relevant as cooperation strategies between individuals (and/or companies) can trump the narrow interests of proprietary claims through increased efficiency and productivity.
    Finally, Paolo’s assertion that libraries remain an important and thriving way to access information is valid, but doesn’t seem to contradict Cheverie’s argument. Cheverie is worried that the role of libraries will be undermined, not so much by increased digital access to information, but by the “changing economics of information”, which is trending to broader assertions of copyrights by content owners “through restrictive licensing agreements, expanded legal protection and penalties, and technological measures that ultimately eliminate fair use.” I agree with Cheverie that we need to find a way to retain what she calls the “copyright balance”: on the one hand, we need “adequate incentives” for producing and disseminating information; on the other hand, we need to maintain the concept of fair use which facilitates public discussion and future creativity.

  5. […] Response to Cheverie 27 07 2008 This is in response to Raquel’s post. […]

  6. pmottola says:

    A primary catalyst for the “changing economics of information” is increasing access to digital goods, whether legal or not. So long as there is some standard of copyright, there will be some limit to legal access (assuming copyrighted materials are not free) and those unable to afford the costs of legally obtaining this information will resource libraries.

    The role of libraries is to provide access to information. Although competition is increasing as more avenues to access information open, I don’t foresee the core role of libraries changing amidst digital economics changing as Cheverie asserts. If anything, libraries are embracing digital evolutions, and extensions of traditional libraries, such as eReserve, provide new ways for people to utilize libraries rather than abandon them.

  7. kahlp says:

    Hi Raquel,
    The validity of copyright in the networked information economy is certainly a topic of energetic conversation. Witness Benkler, Himma and Cheverie among many others. Benkler notes there is little economic support for regulating information. Cheverie states that regulating information is key to incenting authors and artists to distribute information. And Himma argues ISBF fails to challenge the legitimacy of intellectual property protections.

    What is interesting to me is that none of these authors speak to the issue of value of information. In order to argue free vs fee or copyright vs commons it seems important to have an opinion on where the value resides in the networked information economy. Benkler’s example of the newspaper is such a case in point. He notes that revenues from copyrights are very small compared to advertising, subscriptions and sales at newsstands. This is because the news stories themselves are not the most valuable aspect of the newspaper business, the readers are. The news content is simply a means to an end.

    The internet has been a boom for purveyors of information—it provides them with opportunity for wider distribution and greater recognition at a relatively low cost. The downside is that it may be harder to maintain existing price structure and there is greater risk of commoditization.

    With this in mind, it’s worth considering where the value is. The core value may no longer be in the information itself. Like the musicians who recognize the value is not in online distribution of music but in concerts, it seems the source of value in information is what is done with the information. For example, value could be derived through unique packaging, release timing or presentation.

    Cheverie references Lessig “The extreme protections of property are neither needed for ideas nor beneficial. If by resisting the model of perfect control we gain something more important, then we should do so.” I believe that “something more important” is still being determined when it comes to the information economy. And it may be different, depending on the type of information distributed.

  8. christyluther says:

    Hi Raquel,

    I enjoyed reading your posting; I found your clear and direct writing style to be refreshing after Cheverie and Benkler. I agree with you that the two authors have opposing views, although I found Cheverie’s to be quite round-about in manner. And, I thought it was a little strange that she introduced a new concept (the library system) in her conclusion. I thought that should have been a pre-conclusion discussion.

    You note that Cheverie thinks digital fences will enclose portions of public domain. I think there is evidence of this already happening. The example of iTunes is a good reference for what she is describing. It is arguably protecting both the copyrighted songs, and the format on which the songs can be played. This is the stem of the controversy with iTunes; people believe its DRM is enclosing more than it should.

    Overall, I found Cheverie’s article to just reiterate that we are in a period of transition with many unknowns still out there.

  9. sfrost says:

    I think you did a good job pointing out the main differences between Cheverie and Benkler’s viewpoints about copyright. They certainly are on opposites sides of the issue.

    When reading Cheverie’s article I found a few of her viewpoints hard to digest. She does a decent job explaining the original intent of copyright law and how it meant to balance the economic interests of the creator/producer and the broad public interests. She then goes on to describe how times have changed and made it harder for copyright owners.

    This is where I got lost. Cheverie contends that the Internet has made distribution easier and cheaper. I believe this to be true. Then, she says that this has made it harder for creators/producers to make a profit. Aside from some piracy, I would say it is the opposite. It seems to me that consumers can find more works more easily and without the added expensive of a brick and mortar store and middlemen.

    Cheverie believes that copyright needs to be extended to deal with the profit losses created by the Internet. But, she also warns of going too far and creating digital fences that enclose not only copyrighted material, but also unprotectible material. She didn’t offer any solutions, just pointed out the problems she observed. I wondered if she is biased as she is a creator. But then again, so is Benkler.

    I just don’t see how the Internet is creating less profit for creators. I believe it has opened up a new extended marketplace for works to be sold, as well as shared.

  10. […] Comment on Raquel’s Article Abstract Raquel’s Article Abstract […]

  11. captainchunk says:

    I agree with others that Benkler and Cheverie are indeed at odds.

    I am going to have to side with Benkler on this one. It does seem that copyright holders make a small portion of their revenue from holding copyrights and patents. I am not sure that extending copyright like Cheverie says is the answer. It feels like a gasp for breath on a ship that is sinking. Not that copyright should be thrown out all together, but widening the copyright path might not be the best solution. Copyright is going to have to be modified, but it has been extended time after time and look where we are now. Maybe copyright should be contracted…?

    I also don’t think that libraries are seeing much competition from the abundance of digital goods being pirated. While libraries’ audiences have changed over the years, the core users of libraries has remained stable and, in my opinion, will continue to remain stable.

    I did like how you organized your abstract. Straight forward and to the point. Good job.

  12. […] * Raquel – [Joan Cheverie in “The Changing Economics of Information, Technological Development, and Copyright Protection”] Copyrights and the new information economy […]

  13. Nole says:

    Good job comparing the two different authors. I don’t think the libraries core group of users will change despite the wealth of information available on the internet, plus like someone stated yesterday, there will always be a lot of people going to the library to get online. So the library as a physical structure will never disappear, even though the reason people are going may differ, as far as methodology, but even the ones going to use the internet, if they go to do research and access info online, isn’t that essentially the same thing?

  14. jeffhora says:

    I feel that Joan Cheverie is a less adventurous thinker than Benkler. I say this because of the tension between their two views: Cheverie is less inclined to fully buy into the “Information Should Be Free” stance than Benkler and hedges her thought around information copyright.
    She spends much of her time covering the cost structures of information, the original role of copyright and the effective differences between copying, deriving or licensing information. She does agree with Benkler that the expansion of copyright and the attempt of producers to arrive at better digital rights management to restrict information flow is not a good thing, but doesn’t go so far as to advocate its abolishment. Benkler sees more value in information in the public domain alone, with the added value being brought by the products and services that can be built upon that information. I believe that if the Digital Millennium Copyright Act and the Copyright Term Extension Act had not made it significantly more difficult to work with copyrighted materials, while copyright might still be an issue, concern surrounding it wouldn’t be quite as heated as it is.
    Raquel, I appreciate your straight-forward and succinct abstract of the article. You caught the essence of her argument and brought it into the same arena with the other works we are becoming familiar with for scrutiny.

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