Fat horses & starving sparrows

‘One of the most salient features of our culture is that there is so much bullshit’ – so begins moral philosopher Harry Frankfurt’s treatise on bullshit and its function. Bullshit comes, he argues, from one who ‘does not care whether the things he says describe reality correctly’, but says them regardless, in pursuit of their desired ends.1

Bullshit has been enjoying unprecedented success in recent years. The Mexicans will pay for the wall. Britain’s National Health Service will enjoy a weekly £350m injection after Brexit. Australia stops the boats to prevent drownings at sea. But the bullshit I’m interested in right now is that populating Australia’s copyright reform debates.

A great deal of this bullshit is motivated by good intentions – most notably, the desire to sustain writers’ incomes in an era of precipitous, disastrous decline. In the last major survey, conducted by Macquarie University researchers in 2015, Australian authors were found to earn an annual average of just $12,900 from their writing work; the median, at $2,800, is even more concerning. In the UK, which has better longitudinal data, earnings of professional writers have dropped 42 per cent in real terms between 2005 and 2017, according to the Authors’ Licensing and Collecting Society. In that same time, the proportion able to make a living solely from writing work fell from 40 per cent to 13.7 per cent. The jobs at newspapers and magazines that used to so often be relied on to bolster book earnings have largely evaporated. Many of us know people who have lost their writing jobs, or who are just barely clinging on. Much of the blame is aimed at Google and Facebook, and understandably so: the two companies have managed to vacuum up some 60 per cent of global online ad revenue, despite investing almost nothing in producing the content to which it’s attached.

But pure intentions don’t stop bullshit from being bullshit. Frankfurt’s theory doesn’t require nefarious aims – simply the saying of things, regardless of truth, in pursuit of desired ends. As he puts it, ‘[t]he bullshitter … does not reject the authority of the truth, as the liar does, and oppose himself to it. He pays no attention to it at all.’

Frankfurt sees bullshit as the greatest enemy of truth. I don’t know if I agree, but I do think bullshit is dangerous. In this case, the bullshitters’ indifference to facts is hurting the interests of the authors they are ostensibly trying to protect.

So what is the bullshit I’m talking about? And what are the issues and interests it serves to obscure?

Let’s start with ‘free is not fair’, the catchy slogan of a campaign led by the Copyright Agency, which has been used to argue against the proposed adoption of a ‘fair use’ exception to copyright. For those who haven’t been following, there has been fierce debate over whether Australia ought to adopt a flexible exception to copyright infringement that would permit, without payment, any kind of use, so long as it’s ‘fair’. This is already the law in countries such as the US, with ‘fairness’ determined by taking into account all relevant factors, including the effect of the use on the potential market for or value of the copyright material.

Many people claiming that ‘free is not fair’ know a lot about copyright. They know that our law has permitted, for over a century, fair use for purposes such as research, criticism/review and news reporting. And, unless you think you should pay for every use of every copyrighted thing – for example, every time you access a webpage, use a search engine, forward an email or retweet a photo – you know free can be fair. The slogan even contradicts itself, since under a fair-use exception, if the use of a work for free is not fair, it wouldn’t be permitted. That is the entire point. Thus ‘free is not fair’ is textbook bullshit.

The widespread claim that the Productivity Commission recommended copyright be reduced from its current period (life of the creator plus seventy years) to a flat twenty-five years is bullshit, too. I’ll come back to what the commission did say shortly, but for now it’s sufficient to say that it made no such recommendation. In fact, the commission explicitly stated that international law would prevent it from making such a change. The publishers who pushed the claim knew all this, but ran with it anyway.

Of course, there is also bullshit coming from the other side of the debate. Those seeking to expand user rights sometimes make blithe assurances that this will have negligible impact on uses that are currently paid. Fair use certainly should work that way, since courts would be required to take into account potential market harms in determining whether a use is ‘fair’ at all. But the distinct lack of emphasis on safeguards or guarantees can justifiably give rise to concerns that those making the claims do not ‘care whether the things he says describe reality correctly’ – especially if they come from those who are already gobbling up your lunch.

Counterintuitively though, it’s the ostensibly pro-author claims that risk harming authors the most. Those arguing to maintain the current regulations may see these slogans as benign simplifications. After all, copyright is arcane and complex. Free is not fair is a simpler sell than Free is sometimes fair, but we worry judges might find things to be fair when we think they should be paid for.

Similarly, The Productivity Commission wants to take away your copyrights is a proxy for We think its recommendations are against our interests in ways that are too complex to explain, so we are going to arouse your outrage against a non-existent threat to undermine what else it had to say.

However well intentioned these claims might be, they sell authors short. The reasons why can be found in the two fundamental rationales for granting copyright in the first place. The first is to incentivise the creation of works, thus helping achieve the social benefits that flow from widespread access to information and culture. On top of that, copyright aims to reward authors: to secure them an additional share of the benefits arising from their creations, in recognition of their contributions of personality and labour.

To give effect to these aims, authors and publishers should be able to share between them the rights necessary to incentivise their investments in creating and distributing cultural works. But the rewards share – everything beyond that – is justifiable only for authors: the people who actually created the work.

Right now, Australian copyright law is designed to make it as easy as possible for investors to extract the entirety of authors’ copyright interest – not just the incentives component, but the additional rewards part as well. We call this a laissez-faire approach, French for ‘let people do as they choose’, but here better described as the freedom to sign away your rights, before anyone knows what the work is worth, often in exchange for not much at all.

I know a woman, ‘Kate’, who recently sold her book to a Big Five publisher for less than $1,300. The publisher extracted every right to every payment, worldwide, forever, leaving the author with zero entitlement to future royalties (even if the book becomes a surprise bestseller), or any licensing fees that might be paid for use of the book in schools or universities. Kate even lost her statutory right to compensation for use in libraries, since one’s claim to these payments depends on having an ongoing right to royalties.

That such a deal would be offered and agreed to won’t surprise anyone who has worked in or studied creative labour markets. As cultural economist Ruth Towse explains, commercial players in creative industries take advantage of the structure of artists’ labour markets and exploit their willingness to create. A surplus of creatives, coupled with a culture of short-term, project-specific contracts, puts artists in relatively poor bargaining positions when dealing with investors. All this explains how such a big share of copyright’s rewards can end up being transferred to others.

We see from all this that authors have a moral entitlement to the fruits of their labour, but a hard time holding on to them. Outside Australia, many countries have taken steps to even the playing field. In France, publishers have an ongoing obligation to market their books: if they fail to do so, authors can readily regain their rights. They can also terminate an agreement if, at least four years after publication, no royalties have been paid for two years in a row (publishers are required to provide accurate royalty statements too). Canada automatically reverts rights to heirs twenty-five years after an author’s death (as did the UK until 1956 and Australia until 1968). Authors can terminate their contracts in the US after thirty-five years. The Netherlands and Germany both have ‘bestseller’ clauses, entitling authors to a bigger share of the windfall gains that come from unexpected commercial success.

All this makes the bullshit in response to the Productivity Commission’s draft report particularly infuriating. The commission (correctly) made the point that twenty-five years of copyright protection is the most that can be justified on incentives grounds. What it omitted to recognise in its initial draft is that copyright is not just about incentives, but rewards as well. Lots of subsequent submissions took the commission to task for its approach. But almost nobody took the opportunity to argue for law reform that better secures those rewards to their rightful owners – the authors who created the work in the first place.

Australia’s current approach to protecting authors is a manifestation of trickledown economics, that theory of horses and sparrows: feed the horses enough oats and some will fall through to feed the birds. There are plenty of oats. By 2016, according to their own publicly released data, publishing behemoths Penguin Random House and Simon & Schuster had seen their profit margins grow to 16 per cent. Yet a recent study, The Contribution of the Publishing Industry to the UK Economy, estimated that just 3 per cent of earnings went to the authors from whose minds sprang those rivers of gold. In other words, we have fat horses and starving sparrows.

This is why bullshit in the copyright debate is dangerous. By conflating authors’ interests with those of investors, we obscure the important differences between them. And it distracts us from the questions we should be asking – such as how can we secure authors a fairer share, while also maintaining incentives.

There is plenty that could be done to improve authors’ earnings. A good place to start would be to consider European-style ‘bestseller clauses’ and rights to fair remuneration. Rights reversion is also vital: rather than leaving it to individual contracts, we should think critically about the circumstances in which rights should boomerang back to their progenitors – after a certain amount of time, perhaps, as in the US model, or potentially an earlier trigger as in French law. This would open up new possibilities for authors to exploit their own works: for example, direct licensing of ebooks to libraries in exchange for per-loan remuneration, or print-on-demand via local book shops (retail systems that can roll out a perfect paperback in the time it takes to make a cup of coffee already exist). Not only would rights reversion open new revenue streams for authors, it would also maximise the chance that their books keep being read.

We should also be demanding greater transparency around the distribution of revenue from the statutory licences that pay for uses in schools and universities. Those are the revenues that, in Australia, are collected by the Copyright Agency. Australia’s schools pay far more to use copyrighted works than their overseas counterparts – almost $17 per student, compared to around $3 in the UK and NZ. This would be laudable if that money went to supporting authors, but as far as we can tell from the Copyright Agency’s reporting, publishers again take the lion’s share. The Macquarie University report cited above found that authors averaged just $400 in earnings from the Copyright Agency in the 2014–15 financial year – a similar amount to the year before – compared to $1,100 earned through public lending rights. To put those figures in context, the Copyright Agency, according to its annual report, paid out a total of $103 million to copyright owners, while the combined payout to authors and publishers for public and educational lending rights in the same period was barely a fifth of that.

As I’ve pointed out elsewhere, including in a recent submission to the Department of Communications and the Arts, it’s impossible to tell from the Copyright Agency’s reporting how the $103 million paid out to rightsholders is divided up between creators and investors. But it’s clear that these revenue flows are very different to those in the UK, where a bargain between authors and publishers sees revenues split pretty evenly between the two. It’s time to ask serious questions about how we want this public money accounted for and spent.

Mechanisms outside of copyright also have a big role to play. It’s a no brainer that publishers should be obliged to provide regular royalty statements that give meaningful earnings data, and that authors should have the right to an independent audit of their accounts. More provocatively, we might ask: how might things change if we required ‘fair trade’ labels disclosing whether or not an author was ethically paid?

It’s important not to forget that copyright only offers the hope of payment. No matter how broad copyright protections are, or how long they last, they won’t assist a work that has no commercial demand. Books that ought to be written and read, but that have too small a market, need to be funded from elsewhere. ‘Elsewhere’ is often writers’ day jobs; other important sources include PhD scholarships in creative writing, as well as grants and fellowships funded by public and private money.

Our public lending rights play a vital role in supporting such works as well. They compensate authors and publishers for use of works held in public and educational libraries. Payments are currently based on the number of books held, and most of the budget – over $22 million last year – goes directly to authors, making it a vital source of income. However, lending rights were designed at a time when the book industry looked (and paid) very differently, and are ripe for rethinking. For one thing, they need to be extended to ebooks, and we need to have considered conversations about the best way to do so. For another, we might ask whether we want them to play a stronger role in cultural policy. In an era where a Miles Franklin nominee might gross less than $5,000, should we consider placing greater weight on culturally significant – if not commercially significant – Australian stories? Should nomination for one of our prestigious literary prizes entitle the writer and publisher to a larger payment? How can we further the work of our incredible independent publishers, those much skinnier horses who, lacking the Big Five’s economies of scale, have margins far below 16 per cent, but who nonetheless do vital work in getting Australian stories out there?

As we work through these questions, we must think seriously about how to fix the other side of the copyright bargain too. The fierce us-against-them tribalism fuelled by all the bullshit distracts us from the realities around how the law is failing users. Libraries, schools, universities and cultural institutions – some of the biggest supporters of and investors in local authors and long-form reading – need appropriate, flexible exceptions to fulfil their public interest missions. They have proven their case over and over, not just to the Productivity Commission but also to the Australian Law Reform Commission and countless other reviews. To suggest, as I’ve often seen, that they don’t understand the issues (or, even more insultingly, that they are all simply Google dupes) denies the frustrating, wasteful day-to-day reality of wrestling with an Act that is no longer fit for its purpose. And it denies the real cultural price we are all paying. To qualify for an exception under the current Australian law, a use still has to be ‘fair’ but it also has to fall within one of a handful of specific purposes. One is parody or satire. What that means in practice is that a filmmaker might be allowed to use incidental snippets of copyrighted music in their film if it’s making fun of disabled kids, but not if they are telling their story sincerely. Did you know that your six-year-old might be allowed to copy a favourite illustration or poem to fulfil a homework assignment, but they have to make the copy themselves – you can’t do it for them? That historical letters and films and photos are decomposing, unseen, because of the impossibility of obtaining permission from owners who can’t be identified or traced?

We deserve copyright legislation that better achieves its aims, and with less collateral damage. What happens if we stay the current course? Google and Facebook keep operating as now (they run their servers out of the US which means Australia’s exceptions law does not apply). Things will remain unnecessarily complex and expensive for schools and universities and libraries, and for those who serve within them. We will continue limiting the stories our writers and cultural institutions can tell, even when doing so would benefit society and genuinely have zero adverse financial impact on the market for original works. And with all that, we do absolutely nothing to lift authors’ share from current disgraceful levels. Who wins? Those intermediaries, both new and old, who right now are hogging almost all of the pie.

Thanks to Annabel Smith, Kim Weatherall, Lizzie O’Shea and François Petitjean for their comments on an earlier draft.

Note, this research is funded by the Australian Research Council via the Author’s Interest and Library e-lending projects: FT170100011 and LP160100387.




1. My analytical framework was inspired by Eleonora Belfiore’s application of Frankfurt’s theory to British cultural policy. See Eleonora Belfiore, ‘On Bullshit in Cultural Policy Practice and Research: Notes from the British Case’, International Journal of Cultural Policy, vol. 15,  no. 3, 2009, pp. 343–359.




Rebecca Giblin

Rebecca Giblin is an academic working at the intersection of law and culture. Based at Melbourne Law School, she’s Director of the Intellectual Property Research Institute of Australia and heads up the Authors’ Interest Project (authorsinterest.org).

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