Regaining control through Digital Rights Management (DRM): What\u27s in store for the music industry?

This paper, as part of the final requirement for the completion of a Master of Science in Information Technology at the Rochester Institute of Technology, will examine the current state of digital media content and its inherent problems with regard to rendering and distribution. Discussions will focus on the protection and sales of digitalized intellectual property through Digital Rights Management (DRM) while also concentrating on how these technologies can be employed to acquire copyright protection. Though much of the discussion may apply to a wide range of media types, e.g. - movies, software and digital books, the primary focus will be on music content. Part 1 of the paper will explore the current state of the music industry and the problems it faces, while building a case for the application of digital protection technologies that will ensure the integrity of digital music copyright ownership. The concept of DRM will then be presented in Part 2, with a focused discussion on several of the underpinning technologies. Strong emphasis will be placed on how these technologies can be utilized to reach the final goal, secure sales of online music content. The final section, Part 3, will examine how DRM can be applied by the music industry to safeguard their interests while promoting an online business. Case studies will be presented in an attempt to gain an understanding of the current state of the industry

File Sharing, Copyright, and the Optimal Production of Music

Much economic, political, judicial and legal attention has been showered on the significant changes currently taking place within the music production and distribution business forced by the use of the Internet for both file sharing (of unauthorized copyrighted material) and more recent online (legal) music distribution. The strong demand for music, coupled with the low cost of distributing illegal copies via peer-to-peer (P2P) systems, is unraveling the business model by which music has traditionally been created, developed, and distributed. Application of traditional copyright law has been ineffective in stopping the loss of business in the traditional channels. Producers have implemented forms of Digital Rights Management ( DRM ) in an attempt to protect their property via technologically self-enforcing contracts. Past DRM efforts have alienated customers, resulted in defective products, and, in some cases, been laughably easy to defeat by hackers. Producers assert that if the problem isn\u27t solved, music production will be sharply curtailed. The cost of free music via P2P is less music produced and fewer choices, an outcome that all seem to agree is bad. In this Article, I attempt to answer the question whether or not a reduction in music choice is, in fact, bad. I model the music industry as a Hotelling-Salop differentiated products market and, using results from Bhaskar and To, I show that significant overproduction of music may occur. The worst hypothesized loss from file sharing tends to reduce this overproduction, but does not eliminate it. Applying effective DRM simply returns the market to overproduction. Taking account of potential externalities (using rough preliminary estimates) of creative material suggests that overproduction of music is still the most likely outcome. Further empirical research is needed, but, on the basis of this model, the most likely outcome is that the displacement of CD sales by P2P file sharing actually increases welfare by constraining the overproduction of music that results from its unique market structure. The very tentative policy conclusion is that legitimizing file sharing under the doctrine of fair use is likely to be welfare enhancing

Determinants in the on-line distribution of digital content: an exploratory analysis

This article shows the phases – and discusses the results – of an empirical analysis addressing the legal business models that are adopted online to distribute digital content

Music 2025 : The Music Data Dilemma: issues facing the music industry in improving data management

© Crown Copyright 2019Music 2025ʼ investigates the infrastructure issues around the management of digital data in an increasingly stream driven industry. The findings are the culmination of over 50 interviews with high profile music industry representatives across the sector and reflects key issues as well as areas of consensus and contrasting views. The findings reveal whilst there are great examples of data initiatives across the value chain, there are opportunities to improve efficiency and interoperability

An Economist's Guide to Digital Music

In this guide, we discuss the impact of digitalization on the music industry. We rely on market and survey data at the international level as well as expert statements from the industry. The guide investigates recent developments in legal and technological protection of digital music and describes new business models as well as consumers' attitude towards music downloads. We conclude the guide by a discussion of the evolution of the music industry

Economics of Copyright Collecting Societies and Digital Rights: Is There a Case for a Centralised Digital Copyright Exchange?

Copyright collecting societies have attracted economists’ attention for over 30 years and the attention of government regulators for even longer. They have typically been accepted by economists and by courts of law as necessary for reducing transaction costs and enabling copyright to work. The advent of digitization has led to renewed interest in the topic and to the view that though new technologies offer the possibility of improved rights management, collecting societies are not responding sufficiently to these opportunities. That view was evident in recent enquiries into the role of copyright in the digital age in the UK, which proposed the formation of a Digital Copyright Exchange (DCE) that would promote online digital trade. This paper evaluates the case for the DCE in the light of what economists know about collective rights management

Music Aggregators and Intermediation of the Digital Music Market

This article demonstrates that, contrary to popular belief, the advent of the Internet has not made intermediaries in the music market obsolete. Individual artists and independent record labels who want to sell their music in digital music stores must deliver their records via third-party companies called music aggregators. Drawing on the concepts of new institutional economics, the article demonstrates that the emergence of music aggregators is a market response to the high level of transaction costs and bargaining asymmetry associated with selling digital music online. The conclusion suggests that the major music conglomerates may seek ownership links with music aggregators, leading to the emergence of vertically integrated companies, which may have profound consequences for cultural markets

CREATe 2012-2016: Impact on society, industry and policy through research excellence and knowledge exchange

On the eve of the CREATe Festival May 2016, the Centre published this legacy report (edited by Kerry Patterson & Sukhpreet Singh with contributions from consortium researchers)