Culture is future » Financing and economic models

09.22.2011

DEBATES 2011 - Intellectual property - Interview of Françoise Benhamou, economist

Françoise BENHAMOU is an economist and professor at University Paris 13. She is also teaching in many foreign universities and at SciencesPo. She published notably Droit d’auteur et copyright (Author’s right and Copyright) with Joëlle Farchy.

Copyright from an economic point of view

Economists see copyright as the introduction of a monopoly in the marketing of a work, in favor of the author or the financier. It restricts the circulation of the work but also encourages creation thanks to the possibility of paying the author and his financier. Thus, copyright creates a tension between this monopoly, meant to ensure a return on investment (ROI), and the possibility of distributing the work. The duration of copyright is limited in order to promote the diffusion of works, after an eventual redemption.

In this respect, at the time of Internet, the present duration of protection (author’s life plus 70 years after his death) seems an eternity.

The copyright’s history shows that this period keeps being extended. Then, the central question is what the optimal duration of copyright is. From an economic point of view, there is no strong argument in favor of extending it. On the occasion of the Sonny Bono Act, in the United States of America, which extended the duration of protection, a memoir written by a panel of economists - including several Nobel Prize winners - refuted the need for an extension of this period, showing that it would have no additional incentive effect. In 1998, the US Congress passed under that name the law on the extension of the copyright duration, which enables works to be protected up to 70 years after the death of the author and up to 95 years after the first publication, if the copyright owner is a moral person.

The third factor to consider is the scope of copyright, but it is less treated by economists. It is about, for example, the moral right and its implications, or the list of the categories of protected holders.

The philosophical and historical conception of intellectual property is crucial, with two main legal traditions: first the continental copyright, which includes moral right and focuses on the person - the “creator”; secondly, the copyright, where the person disappears behind the financier. But nowadays, we notice some convergence between them: the question of moral right is increasingly raised in the USA, and, reciprocally, the economic dimension is at the heart of the debate on copyright in the digital world.

The last point concerns the very wide field of exceptions to author’s right that enable to respond to the tension between monopoly and diffusion. Less exceptions is better”, says Francoise Benhamou, in particular because of questions of readability, understanding and transparency of the law, but also because of the question of the applicability of the rule. Besides the one for libraries, the educative exception is a very important issue, especially as the real practices tend to beat the game. Françoise Benhamou indicates that she shares all the content of her lectures with her students, by digital way, which includes quotes from her books, though protected by author’s right (concept of fair use).

Françoise Benhamou also notices it could be interesting that the state finances more research and development rather than scanning the catalogs. In a market, where the educational exception penalizes publishers, this new funding would allow them to offer educational materials incommensurable with the ones supplied by the professors, so that they are not competing publishers.

Quote of the study of Séverine Dussolier (Author’s right and protection of works in the digital environment, Larciers Editions. Collection Creation Information Communication, Brussels, 2005, 582 pages), which offers an interesting comparative perspective on intellectual property in different countries.
 

The problems encountered

The question of the applicability of laws is raised with two main issues: the political will of the state and the practicality of enforcement. Françoise Benhamou mentions the example of Hadopi, which, according to her, is a law difficult to enforce and misunderstood. It would have been to its advantage to be presented as a first step – temporary – to develop a more efficient solution. The law – as well as organizations – should aim at inventing mechanism of regulation and business models and keeping in mind the crucial question of their applicability.

Françoise Benhamou also notices that the spending of the French on culture for equipment and subscriptions are rising more and more (in proportion to the total expenditure on culture and cultural facilities), while expenditure for works increases very slowly on the long range. This observation speaks for payment models upstream (at the time of subscription)

In the academic field, the content has migrated to digital. Scientific publishers developed a very specific model: academics reread the articles, write without being paid, prescribe reading to their students, and ultimately must also pay for an access to articles. This approach does not mean that we have to reappraise the requirements of scientific publisher and funding needs related to checking the quality of publications.

For instance, JSTOR is an online database of academic publications to which Françoise Benhamou subscribed via her research center. It allows, after subscription, an easy access to many articles. But when an article is not available under this subscription and that it is necessary to pay up to 25euros for access, the reaction is to find how to get it in a different way: prices must adapt to the “willingness to pay”. This practice is reflected in the online consumption of the French.

This point raises in particular the relevance of micro-payment as an alternative to the current model.

What is the motivation of professors to share the content of their lectures? First, it is an important and useful educational tool; for certain it is also a tool to gain notoriety that offsets the decline in textbook sales, which are directly derived from the course. This practice does not necessarily preclude the sale of books, educational resources created with the flow by professors, books of research and essay can be complementing each other.

An economic observation is finally mentioned for universities: libraries are spending more and more money for subscriptions to scientific databases, which have a high cost but offer real opportunities for access. Money that is not invested in the purchase of books.  There is thus a carrying forward of the budget for books to “bundles” of digitized journals. There is a transfer of income from traditional publishers to scientific editors, who have already made their digital transformation and dispose on this segment of the market (the academic market) a quasi-monopoly.