Removal of restrictions can decrease music piracy

Oct 07, 2011

Contrary to the traditional views of the music industry, removal of digital rights management (DRM) restrictions can actually decrease piracy, according to new research from Rice University and Duke University.

Marketing professors Dinah Vernik of Rice and Devavrat Purohit and Preyas Desai of Duke used analytical modeling to examine how is influenced by the presence or absence of DRM restrictions. They found that while these restrictions make piracy more costly and difficult, the restrictions also have a on legal users who have no intention of doing anything illegal.

Their findings, which will appear in the November-December issue of , add to the ongoing debate about technology that limits usage of .

Because a DRM-restricted product will only be purchased by a legal user, …"only the legal users pay the price and suffer from the restrictions," the study said. "Illegal users are not affected because the pirated product does not have DRM restrictions."

"In many cases, DRM restrictions prevent legal users from doing something as normal as making backup copies of their ," Vernik said. "Because of these inconveniences, some consumers choose to pirate."

The research challenges conventional wisdom that removal of DRM restrictions increases piracy levels; the study shows that piracy can actually decrease when a company allows restriction-free downloads.

"Removal of these restrictions makes the product more convenient to use and intensifies competition with the traditional format (CDs), which has no DRM ," Vernik said. "This increased competition results in decreased prices for both downloadable and CD music and makes it more likely that consumers will move from stealing music to buying legal downloads."

"Unlike in earlier literature, we examine consumers' choices among all the major sources of music," Desai said. "By analyzing the competition among the traditional retailer, the digital retailer and pirated music, we get a better understanding of the competitive forces in the market."

The research also revealed that copyright owners don't necessarily benefit from a lower amount of piracy. "Decreased piracy doesn't guarantee increased profits," Purohit said. "In fact, our analysis demonstrates that under some conditions, one can observe lower levels of piracy and lower profits."

Vernik, Desai and Purohit hope that their research paper, "Music Downloads and the Flip Side of Protection," will provide important insights into the role of DRM.

"[The late] Steve Jobs said it best: 'Why would the big four music companies agree to let Apple and others distribute their music without using DRM systems to protect it? The simplest answer is because DRMs haven't worked, and may never work, to halt music piracy.'" Vernik said. "And our research presented a counterintuitive conclusion that in fact, removing the DRM can be more effective in decreasing music piracy than making the DRM more stringent."

Explore further: Tracking Chinese aid to Africa

Related Stories

Jobs Says Apple Customers Not into Renting Music

Apr 27, 2007

Apple Chief Executive Steve Jobs indicates he is unlikely to give in to calls from the music industry to add a subscription-based model to Apple's wildly popular iTunes online music store.

China's Baidu, music labels launch online service

Jul 19, 2011

(AP) -- Baidu Inc., which operates China's most popular search engine, said Tuesday it will distribute music from three global labels in a deal that its partners say could help clean up China's piracy-plagued music market.

New car radio solution with multilingual support

Jan 10, 2005

Fraunhofer IIS presented the first DRM chip design for car radios. This car radio solution will enable drivers to select their preferred radio program from hundreds of different radio stations. However, it is something more ...

Virgin Media and Universal launch music service

Jun 15, 2009

(AP) -- Virgin Media, the cable TV operator owned by entrepreneur Richard Branson, launched a new kind of music download subscription service Monday with Universal, the world's largest music company.

Recommended for you

Over-identifying restrictions in economic analysis

14 hours ago

The analysis of empirical economics has long made use of a tool called the generalized method of moments (GMM). This method is used as a generic way of estimating parameters in an empirical model where the ...

Tracking Chinese aid to Africa

Nov 24, 2014

Is a fancy new school in an African government official's hometown a coincidence, or evidence of systematic favouritism in the distribution of aid?

User comments : 9

Adjust slider to filter visible comments by rank

Display comments: newest first

rawa1
1 / 5 (1) Oct 07, 2011
rawa1
1 / 5 (1) Oct 07, 2011
The Flip Side of DRM Protection by the same author: http://www.duke.e...inal.pdf
Sorenos
5 / 5 (2) Oct 07, 2011
So if DRM only affects legal users and all the music is on the internet free and without DRM anyways, then maybe DRM is just costly and inconvinient to the people who buy it? These guys are brilliant!!! And it only took like 15 years to figure this out? It's nice to know that the money I pay for licensed products go to this kind of deep research.
CHollman82
3 / 5 (2) Oct 07, 2011
I'd rather music be made by people who do it for the love of music rather than people who do it to get rich anyway...

I support independent artists who are not in the pocket of a giant multinational record label. Corrupting piece of shit middlemen is all they are, in this day and age anyone can market their own music on the internet, just put some songs on youtube or any streaming radio website and if they are good people will notice, and if they want to support you and show that they want you to make more they will buy your tracks for $1 a piece off of your own website or itunes or whatever... which is more than the artist will make if they go through a label. Hell, if there are a few good songs I want I'd rather spend a couple bucks on the artists official site to support them than hassle with torrents or usenet to download them anyway.
CHollman82
3.7 / 5 (3) Oct 07, 2011
The MPAA and RIAA are wholly unnecessary, they are a cancer to both producers and consumers (of which they are neither). They are middlemen that add no value, only cost, to that which they sell, and they are afraid. They are afraid because they know they are useless and that their days are numbered. They will use their considerable wealth and influence to pass unjust laws in their favor and to ruin people's life's with ridiculous lawsuits. They sue normal people for MILLIONS for downloading songs worth 1/1,000 of that amount, people who will NEVER be able to pay that much. These people have their wages garnished at a rate of 25% for the rest of their life's.
mgb
not rated yet Oct 07, 2011
End copyrights! Give them patents! They'll still get rich if the content is worth it. If not, and in the meantime, I'll pirate.
kochevnik
1 / 5 (1) Oct 08, 2011
I'm all for paying artists. Not some parasitic fat-cat multinational conglomerate employing child-porn laws as a pretext to legislate universal surveillance of computers and networks. Besides, isn't that what the NSA does already?

If you really identify with the artist, you're going to support them. Social networks provide the required scaffolding to connect fans and audience. I have no problem contacting artists if I have something of merit to say. If Kelli Ali or Tears for Fears got my entire $60 for a concert I think they would find better things to do with the money.
Humpty
1 / 5 (1) Oct 08, 2011
I gave up buying ages ago, and moved into enjoying, reading, writing and producing my own music.

Price gouging and shitty ideologies of the big 4 had much to do with it.
Sin_Amos
not rated yet Oct 08, 2011
I haven't downloaded an mp3 in over ten years. Why? Because there are enough free digital streams of new music. Plus, I can record any of these streams and cut them into mp3 if I want, but I don't even care. I love music, but the idea of buying it makes no sense. Music is how you get people to the merchandise and concerts. That simple. The problem is that the industry had so many middlemen doing no actual work getting paid before the artists. The industry failed because it executed its business plan under unethical principles. Plus, with technology, anyone can record quality tracks at home. Why don't they stop trying to monetize songs? It is stupid and worthless. Musicians can work just like everyone else.

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.