Copyright term extension likely to benefit NZ

The extension to New Zealand’s copyright period from 50 to 70 years in the TPPA agreement is likely to generate a net benefit to the New Zealand economy.

This according to prominent New Zealand economist Dr George Barker who says estimates in the so-called Ergas Report of the extension costing New Zealand $55 million a year are incorrect.

Dr Barker’s report prepared for Recorded Music New Zealand says the seven-year old Ergas Report contains substantial mathematical errors for both music and books.

He also says the report denies there are downstream benefits from the copyright term extension that will incentivise investment and provide finance for new works.

“Unfortunately the flawed Ergas research has now been widely circulated and is published as fact on the website of the Ministry of Foreign Affairs and Trade. It has also been widely reported in the media,” Dr Barker says.

Since 7 March, the Government has been providing information about the TPPA to the wider public and business. Recorded Music is concerned the flawed Ergas Report information has again been the focus of the events.

Dr Barker reviewed the Ergas Report with assistance from his colleagues Professor Stan Liebowitz and Dr Alejandro Zentner of the University of Texas at Dallas at the end of 2015.

In his preliminary report, Dr Barker notes:

First

• Ergas’ estimate of the total net cost for music of $17 million per annum is impossible, given it is more than 10 times the value of total sound recordings sales of the 50 to 70 year vintage in 2009 (at the time of the Ergas report).
• Ergas’ import transfer cost estimate of $18 million is more than 200 times the likely import transfer cost using Ergas’ methodology - which would at most be around $78,000 per annum for music (based on NZ wholesale data).
• Ergas made the same cost estimate errors for books.
• The NZ Government then copied the music number error for films.

And

• Ergas claims there is no offsetting benefits from increased investment and creative output over time with term extension. This is despite well published theory and evidence telling us that:
o The increased expected returns to investment from term extension will encourage or incentivise investment in new works, while
o The increase in revenues generated by term extension will be used to finance new works.

Recorded Music New Zealand CEO, Damian Vaughan says Dr Barker estimates there is more than likely a net benefit of term extension to the NZ economy and that the proposed eight year phase in should be dropped.

Mr Vaughan says Recorded Music will be working with Government on ensuring National Interest Analysis on the TPPA is a true and accurate record of the benefits from copyright extension. “We welcome a robust, open and transparent process with the minister and the ministries.”

ENDS

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