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the public domain. But theory does not always prove true in practice, and it is entirely plausible that the exploitation of public domain works will result in comparable, or even higher, prices to consumers. First, while continued copyright protection may result in higher prices than would otherwise obtain, the real question is how much higher prices will be in the extended term. Second, the marketing investment devoted to the exploitation of public domain works will necessarily generate costs that are not generated in the exploitation of copyrighted works. Exploiters of the public domain will pass these costs on to consumers.
Unlike patented pharmaceuticals, copyrighted works are highly substitutable. A motion picture company that seeks to charge $129.95 for a videocassette of a popular action-adventure film will quickly discover that most of its prospective buyers will choose a competitor's lower-price action-adventure film instead. To survive in the marketplace, the motion picture company will lower its price to meet the competition. The present migration of videocassette distribution from sales for rental by consumers to sales for purchase by consumers has been accompanied by a drop in retail prices of videocassettes from $69.95 to $14.95 — clear evidence of competition's effects and consumer demand. In short, because copyright owners will be forced during an extended term to compete, not only with other copyrighted works — including contemporary movies — but with works in the public domain, they can be expected to set prices well below "extortionate" levels.
Nor is it clear that, during the proposed extended term, consumers will pay less for public domain works than they would if those same works remained in copyright. Motion picture copyright owners can be expected to retain — or license — the high quality master prints of their works and will be able to draw on the reputation for quality that has historically attached to such trademarks as Disney, MGM/UA, Paramount and Warner Bros. Even if exploiters of the public domain can match the quality achieved through master prints, they will need to invest in marketing programs that identify their products with high quality in the minds of consumers, and in differentiating their products from those of competing public domain products. As in the case of advertising expenditures generally, they will pass these costs on to consumers.
Whether or not exploiters of the public domain will charge lower prices for their product — and they may not — their products can be expected in many, if not most, cases to be qualitatively inferior to the original works they copy. The continuing print degradation of It's a Wonderful Life, as annually broadcast over television, was a salient example. Lower quality represents no less a social cost than higher prices. Further, as we move into a digital age that will facilitate highquality copying, motion picture companies will have little