The Fellowship of the Ring, the first of Peter Jackson's LOTR movies released in 2001, made $887 million in its original theatrical run (on a $93 million budget). It would absolutely still have been made if copyright was only 20 years. And now it would be in the public domain!
This argument works against you. The probability of a long tail of revenue is even less likely than a major hit, so it necessarily has less weight in any decision to swing for the fences.
Producers don't invest in movies for hypothetical revenues in 20 years time. If it doesn't pay off soon after release, it's written off as a loss. Revenues in 100 years time are completely irrelevant.
Actually I think long tail revenue is quite well correlated with a property being a hit. Netflix paid $500m for the rights to Seinfeld 20 years after the show ended. Star Wars is still huge, nearly 50 years after the release of the original. Disney in general has ruthlessly mined its back catalog; they just printed another $700m from a Lion King prequel, whose value lay largely in the good will still hanging over from the original, which they still own, and which is still absolutely a valuable asset despite being 30 years old. Back catalogs are huge deals. Amazon paid $8bn for MGM to boost its Prime Video content library. Streaming has opened up long tail revenue opportunities beyond the box office that never existed before.
Are the people better off because of these properties? What about the counterfactual, where there are more Star Wars stories by more varied producers?
That they are valuable speaks to market inefficiency. Where is the consumer surplus?
Seinfeld wasn't greenlit due to Netflix streaming rights. Better Lion King adaptations might have been made instead.
The success that we can now measure through hindsight wasn’t assured at the time of greenlighting the film. They took a huge gamble:
https://variety.com/2021/film/news/lord-of-the-rings-peter-j...
It would have been an even bigger gamble if they weren’t able to bank on any long term revenue (I’m certain Netflix continues to pay for the rights to stream the trilogy after 2021).