How much money has MS sunk into Vista? More than $50 million, I imagine. Probably more than $200 million, not so?
What's the value of the labor poured into Linux over the last two decades? Or even over the last few years?
I don't want to push this too far, but--Levine's basic point is that generally speaking, we don't protect business models. Why are we so afraid of protecting them in the case of IP? We have plenty of evidence that it isn't strictly necessary. Of course the companies don't innovate when they don't have to; this isn't a reason to protect them from having to.
Cog
· 3 years ago
There's a folk maxim in the computer graphics industry that film-quality CGI costs roughly the same amount per minute of finished film from year to year. As performance improves, the studio simply increases the quality and sophistication of the rendering. Or, in other words, it's not that studios decide how much they want the film to look, and use enough render-hours to make the film look that way. Rather, they figure out how much time and money they have, and adjust their CGI production pipeline so that they can produce the best possible output on that schedule and budget.
It's not clear that this trend will hit any limits in the foreseeable future. Photorealistic rendering may be a solved problem, but various forms of procedural animation and physical simulation can eat up essentially arbitrary amounts of CPU. Meanwhile, audience's eyes grow more sophisticated at roughly the same rate that rendering technology improves, and this is not a coincidence.
Therefore, I'm skeptical of Levine's argument that the cheapness of effects technology will make big-budget special effects obsolete. It makes me wonder if he's actually familiar with the economics of filmmaking, or he's just making stuff up.
Greg
· 3 years ago
Tim> You've got lighting crews, camera crews, makeup crews, set crews, sound crews, post-production crews, and on and on. Another major cost is the environment in which actors act.
One reply to this is that with CGI, you don't have any of those costs. Cog is right, though, that in in CGI films, the costs will expand to meet the budget. A good counter is: can CGI movies like "Shrek" or "Nemo" replace traditional film-making? Quite possibly the answer is no, no matter how good they get, at least for some viewers. They'll take a share, but "real" actors and locations will still be what Hollywood is about for some people.
A good (and entertaining) book to read, if you're interested in a broad-brush picture of blockbuster production, is The Devil's Candy, which tells the story behind the financing and production of The Bonfire of the Vanities (which flopped, which makes it all the more interesting to read about).
The big question here, though -- and what I was thinking of saying to the NBC guy -- is why is it my obligation to preserve the blockbuster form per se. Yes, we've had them in the past and they've been a successful genre and I've enjoyed many of them... But, drawing on the title of this blog, do we need to pass new laws every time technological development threatens in some way to undermine the "blockbuster business model" in some way?
By analogy, how do you feel about state subsidies for certain art forms (e.g. ballet) that don't seem to draw big enough markets to meet their production costs? Surely if we banned television and computer technology, we'd probably increase the revenues of local ballet companies. Ballet is good, blockbusters are good, but maybe the thing that replaces ballet and blockbusters will be good too.
MikeT
· 3 years ago
I don't think it's a matter of copyrights here, it's a matter of the studios making a movie that can't recoup its costs, let alone cut a profit. I think most people would prefer movies with fresh, cheap talent that have good special effects and are made more often to these big blockbusters. Or should we be calling them just budgetbusters these days? Underworld should have revolutionized Hollywood's view of low budget movies. It did incredibly well for a $22M movie. I think it brought in around 4-5x what it cost to produce. Why can't Hollywood provide us with a few times more movies, but that are cheaper like Underworld instead of betting it all on one big movie?
Tim
· 3 years ago
Greg, thanks for commenting:
By analogy, how do you feel about state subsidies for certain art forms (e.g. ballet) that don't seem to draw big enough markets to meet their production costs? Surely if we banned television and computer technology, we'd probably increase the revenues of local ballet companies. Ballet is good, blockbusters are good, but maybe the thing that replaces ballet and blockbusters will be good too.
I don't think "state subsidy" is the appropriate way to think about the issue. Copyright is designed to solve a collective action problem. There might be (say) 20 million people who would like to see a big-budget King Kong movie, and each of them might be willing to pay $10 for a ticket. So it's socially efficient (in the sense that consumers are willing to freely part with their hard-earned money) for the movie to be made. However, it might be impossible to turn a profit in the absence of copyright law because although each potential viewer might be willing to pay $10 if they have to, a lot of them will take a free copy of it if they can get it.
It just doesn't make any sense to treat the money I pay for my King Kong ticket as a state subsidy. Copyright law doesn't substantially impede the creation of low-budget independent movies. In fact, dozens are made every year. Yet most consumers freely choose to patronize big-budget blockbusters instead. That's not a state subsidy, that's the revealed preference of consumers.
Jim Harper
· 3 years ago
This is a merry-go-round I've ridden on - and sometimes still ride: the idea that consumers' willingness to pay is a good measure of utility. But you have to consider the possibility of higher consumer surplus coming from less copyright protection.
Sometime back, a comment here on TLF made me realize that there's a sort of "broken windows" problem. Just like when you break a window, the movement of dollars from consumers to content owners (glaziers) appears to generate wealth - but if the content were given to them free, they would have it and still have their dollars to spend on other goods.
The (remaining) problem is getting content created in the first place. In response to Jim DeLong, I wrote in one of my past posts that the marginal theory of value is not appropriate in the IP area. The constitution calls for a policy judgment premised on the labor theory of value. And, since then, the Levine book brought me to more skepticism about the copyright bargain in the first place.
Greg
· 3 years ago
Generally, what Jim said -- but to add a little more...
Tim> Copyright law doesn't substantially impede the creation of low-budget independent movies. In fact, dozens are made every year.
But that is a comparison of apples with apples, since low-budget and high-budget films are both protected by copyright law. (Unless you're arguing that we should invent a difference in the protections for those two forms to reflect the revealed preference for blockbusters over low-budget movies?)
The reason I didn't say anything to the fellow from NBC is 1) I think he was raising the specter of "no more copyright protection"--which seems to me a flight of fancy more than anything, and 2) he was asking how we'd all do without King Kong and the $100 million movie. Personally, I don't see the loss of the $100 million movie (I'm not sure what the evidence is that we're losing it, btw!) as a significant problem for society. If we were to have no $100 million movies produced in 2010, I imagine we'd all be doing something else (maybe reading books?). Dominant forms of cultural production and entertainment come and go -- some people like blockbusters and some like ballet, but should the government really be in the business of rescuing a particular genre that claims it is in peril?
More broadly, I'm not sure I get the point of your reply. When the state creates (any) property right out of thin air, you're almost inevitably going to see some markets emerge, but that doesn't always mean that we've increased net social utility, as Jim notes. Some forms of property are more efficiently held in commons-type arrangements (see Carol Rose or Benkler on this).
The standard utilitarian copyright story, as you know, is that we're all better off with the copyright bargain. I personally think this is true, but from an analytical viewpoint, if the only way you gauge the utility of new varieties of IP protections is through the question of whether they lead to new market exchanges, you've got (as Jim notes) a pretty myopic view of what could be factored into a net calculation of social utility.
Tim
· 3 years ago
Greg, we might be talking at cross purposes here, because my post was really directed at folks who argue we don't need copyright law at all. I don't think that's your position, so obviously I can't expect you to defend it.
With that said, a couple of additional thoughts: if it were the case that you could produce better movies without copyright, couldn't indy movie producers come up with something akin to the GPL to enforce the no-copyright bargain? Unless Hollywood's copyrights for its blockbusters directly interfere with the ability of smaller studios to make movies, it's not clear to me how the existence of copyright law impedes the emergence of non-copyright-based markets. For example, the blogosphere largely operates without benefit of copyright law, not because we couldn't invoke our rights under copyright if we wanted to, but simply because we've found that copyright isn't helpful for the sorts of things we're trying to accomplish.
Now, here's where I will agree with you: it might be that thanks to improvements in technology, independent filmmakers will start making radically cheaper movies and drive Hollywood's $200 million business model into bankruptcy. If that happens, I think even the strongest IP maximalist would agree that that's good old-fashioned competition in action.
I need to give your and Jim's comments regarding how to evaluate the copyright bargain some more thought before I comment about that.
Greg
· 3 years ago
Tim -- yes, I think we're probably agreeing much more than disagreeing. I guess part of my difficulty here is understanding who this fabled "no copyright" crowd is (other than RMS) and what chances they think they have of passing a constitutional amendment. My sense is that the argument in the main over (c) today is about more or less, stronger or weaker, not about existence or non-existence. And when it comes to specific legislation that reforms the law, one is lucky to even get to a cogent policy debate about stronger or weaker (though perhaps I'm being too cynical).
Tim> ...it's not clear to me how the existence of copyright law impedes the emergence of non-copyright-based markets. For example, the blogosphere largely operates without benefit of copyright law, not because we couldn't invoke our rights under copyright if we wanted to, but simply because we've found that copyright isn't helpful for the sorts of things we're trying to accomplish.
So the analog to the blogosphere in film would probably be something like You Tube, I suppose. And yes, I think that's a model that seems viable in this technological moment. It isn't exactly a replacement for blockbusters, though -- that's one of the interesting things about these new extra-copyright models -- they are different creatures.
(And I should add that blogs and You Tube are clearly covered by copyright, they just don't seem to be functioning in a way that depends upon the property markets that copyright envisions.)
Tim
· 3 years ago
Well, David Levine is obviously part of the "no copyright" crowd. And it appears that he may have converted the director of information policy studies at the Cato Institute to his side. ;-)
But I agree with you that there's no realistic chance of copyright being abolished any time soon, and most of the mainstream critics of excessive copyright expansion aren't seeking to repeal it. Which is why it's so irritating when copyright maximalists paint their critics as seeking to abolish intellectual property.
Greg
· 3 years ago
Yeah, we're definitely agreeing too much here. :-)
Final comment: if Jim and David Levine want to question the copyright bargain, I say more power to them, honestly. In a way we're all operating on hunches here, aren't we? There hasn't been a controlled experiment with a no-copyright culture in the last few centuries.
(To some extent, that's what we had in the 19th century here in the U.S. re European copyrights, but obviously that's not an ideal comparison -- more of a "pirate" culture. We could also, I suppose, go back to pre-modernity and note that there was a pretty healthy production of superior cultural products back then, but again there are too many differences to feel comfortable with that comparison.)
So the evidence is out, I think, on whether the copyright bargain is working. Personally, I think we need some degree of IP protection for works of authorship (and I think the general sentiment of the public leans that way, but out of -- as Jim suggests -- something other than a sense of the social utility of the system), but getting the exact calculus of the bargain right is tricky (and inevitably involves ideological issues).
Btw, on the utility of economics in the contemporary IP debates, I'd recommend Jamie Boyle's Cruel, Mean, or Lavish? piece if you haven't read it yet: http://www.law.duke.edu/boylesite/cruel.pdf
All Comments
What's the value of the labor poured into Linux over the last two decades? Or even over the last few years?
I don't want to push this too far, but--Levine's basic point is that generally speaking, we don't protect business models. Why are we so afraid of protecting them in the case of IP? We have plenty of evidence that it isn't strictly necessary. Of course the companies don't innovate when they don't have to; this isn't a reason to protect them from having to.
It's not clear that this trend will hit any limits in the foreseeable future. Photorealistic rendering may be a solved problem, but various forms of procedural animation and physical simulation can eat up essentially arbitrary amounts of CPU. Meanwhile, audience's eyes grow more sophisticated at roughly the same rate that rendering technology improves, and this is not a coincidence.
Therefore, I'm skeptical of Levine's argument that the cheapness of effects technology will make big-budget special effects obsolete. It makes me wonder if he's actually familiar with the economics of filmmaking, or he's just making stuff up.
One reply to this is that with CGI, you don't have any of those costs. Cog is right, though, that in in CGI films, the costs will expand to meet the budget. A good counter is: can CGI movies like "Shrek" or "Nemo" replace traditional film-making? Quite possibly the answer is no, no matter how good they get, at least for some viewers. They'll take a share, but "real" actors and locations will still be what Hollywood is about for some people.
A good (and entertaining) book to read, if you're interested in a broad-brush picture of blockbuster production, is The Devil's Candy, which tells the story behind the financing and production of The Bonfire of the Vanities (which flopped, which makes it all the more interesting to read about).
The big question here, though -- and what I was thinking of saying to the NBC guy -- is why is it my obligation to preserve the blockbuster form per se. Yes, we've had them in the past and they've been a successful genre and I've enjoyed many of them... But, drawing on the title of this blog, do we need to pass new laws every time technological development threatens in some way to undermine the
"blockbuster business model" in some way?
By analogy, how do you feel about state subsidies for certain art forms (e.g. ballet) that don't seem to draw big enough markets to meet their production costs? Surely if we banned television and computer technology, we'd probably increase the revenues of local ballet companies. Ballet is good, blockbusters are good, but maybe the thing that replaces ballet and blockbusters will be good too.
By analogy, how do you feel about state subsidies for certain art forms (e.g. ballet) that don't seem to draw big enough markets to meet their production costs? Surely if we banned television and computer technology, we'd probably increase the revenues of local ballet companies. Ballet is good, blockbusters are good, but maybe the thing that replaces ballet and blockbusters will be good too.
I don't think "state subsidy" is the appropriate way to think about the issue. Copyright is designed to solve a collective action problem. There might be (say) 20 million people who would like to see a big-budget King Kong movie, and each of them might be willing to pay $10 for a ticket. So it's socially efficient (in the sense that consumers are willing to freely part with their hard-earned money) for the movie to be made. However, it might be impossible to turn a profit in the absence of copyright law because although each potential viewer might be willing to pay $10 if they have to, a lot of them will take a free copy of it if they can get it.
It just doesn't make any sense to treat the money I pay for my King Kong ticket as a state subsidy. Copyright law doesn't substantially impede the creation of low-budget independent movies. In fact, dozens are made every year. Yet most consumers freely choose to patronize big-budget blockbusters instead. That's not a state subsidy, that's the revealed preference of consumers.
Sometime back, a comment here on TLF made me realize that there's a sort of "broken windows" problem. Just like when you break a window, the movement of dollars from consumers to content owners (glaziers) appears to generate wealth - but if the content were given to them free, they would have it and still have their dollars to spend on other goods.
The (remaining) problem is getting content created in the first place. In response to Jim DeLong, I wrote in one of my past posts that the marginal theory of value is not appropriate in the IP area. The constitution calls for a policy judgment premised on the labor theory of value. And, since then, the Levine book brought me to more skepticism about the copyright bargain in the first place.
Tim> Copyright law doesn't substantially impede the creation of low-budget independent movies. In fact, dozens are made every year.
But that is a comparison of apples with apples, since low-budget and high-budget films are both protected by copyright law. (Unless you're arguing that we should invent a difference in the protections for those two forms to reflect the revealed preference for blockbusters over low-budget movies?)
The reason I didn't say anything to the fellow from NBC is 1) I think he was raising the specter of "no more copyright protection"--which seems to me a flight of fancy more than anything, and 2) he was asking how we'd all do without King Kong and the $100 million movie. Personally, I don't see the loss of the $100 million movie (I'm not sure what the evidence is that we're losing it, btw!) as a significant problem for society. If we were to have no $100 million movies produced in 2010, I imagine we'd all be doing something else (maybe reading books?). Dominant forms of cultural production and entertainment come and go -- some people like blockbusters and some like ballet, but should the government really be in the business of rescuing a particular genre that claims it is in peril?
More broadly, I'm not sure I get the point of your reply. When the state creates (any) property right out of thin air, you're almost inevitably going to see some markets emerge, but that doesn't always mean that we've increased net social utility, as Jim notes. Some forms of property are more efficiently held in commons-type arrangements (see Carol Rose or Benkler on this).
The standard utilitarian copyright story, as you know, is that we're all better off with the copyright bargain. I personally think this is true, but from an analytical viewpoint, if the only way you gauge the utility of new varieties of IP protections is through the question of whether they lead to new market exchanges, you've got (as Jim notes) a pretty myopic view of what could be factored into a net calculation of social utility.
With that said, a couple of additional thoughts: if it were the case that you could produce better movies without copyright, couldn't indy movie producers come up with something akin to the GPL to enforce the no-copyright bargain? Unless Hollywood's copyrights for its blockbusters directly interfere with the ability of smaller studios to make movies, it's not clear to me how the existence of copyright law impedes the emergence of non-copyright-based markets. For example, the blogosphere largely operates without benefit of copyright law, not because we couldn't invoke our rights under copyright if we wanted to, but simply because we've found that copyright isn't helpful for the sorts of things we're trying to accomplish.
Now, here's where I will agree with you: it might be that thanks to improvements in technology, independent filmmakers will start making radically cheaper movies and drive Hollywood's $200 million business model into bankruptcy. If that happens, I think even the strongest IP maximalist would agree that that's good old-fashioned competition in action.
I need to give your and Jim's comments regarding how to evaluate the copyright bargain some more thought before I comment about that.
Tim> ...it's not clear to me how the existence of copyright law impedes the emergence of non-copyright-based markets. For example, the blogosphere largely operates without benefit of copyright law, not because we couldn't invoke our rights under copyright if we wanted to, but simply because we've found that copyright isn't helpful for the sorts of things we're trying to accomplish.
So the analog to the blogosphere in film would probably be something like You Tube, I suppose. And yes, I think that's a model that seems viable in this technological moment. It isn't exactly a replacement for blockbusters, though -- that's one of the interesting things about these new extra-copyright models -- they are different creatures.
(And I should add that blogs and You Tube are clearly covered by copyright, they just don't seem to be functioning in a way that depends upon the property markets that copyright envisions.)
But I agree with you that there's no realistic chance of copyright being abolished any time soon, and most of the mainstream critics of excessive copyright expansion aren't seeking to repeal it. Which is why it's so irritating when copyright maximalists paint their critics as seeking to abolish intellectual property.
Final comment: if Jim and David Levine want to question the copyright bargain, I say more power to them, honestly. In a way we're all operating on hunches here, aren't we? There hasn't been a controlled experiment with a no-copyright culture in the last few centuries.
(To some extent, that's what we had in the 19th century here in the U.S. re European copyrights, but obviously that's not an ideal comparison -- more of a "pirate" culture. We could also, I suppose, go back to pre-modernity and note that there was a pretty healthy production of superior cultural products back then, but again there are too many differences to feel comfortable with that comparison.)
So the evidence is out, I think, on whether the copyright bargain is working. Personally, I think we need some degree of IP protection for works of authorship (and I think the general sentiment of the public leans that way, but out of -- as Jim suggests -- something other than a sense of the social utility of the system), but getting the exact calculus of the bargain right is tricky (and inevitably involves ideological issues).
Btw, on the utility of economics in the contemporary IP debates, I'd recommend Jamie Boyle's Cruel, Mean, or Lavish? piece if you haven't read it yet: http://www.law.duke.edu/boylesite/cruel.pdf