Fair Play for Fair Pay: Fighting Digital Piracy through Revenue Sharing

Considering a setting where a content provider (CP) sells their content to customers over a network owned by an ISP, we examine whether the CP can use monetary incentives to encourage the ISP to fight digital piracy without any intervention by the policymaker. In our model, the CP sets a fraction of its revenue that is shared with the ISP and the price of its content, the ISP determines its anti-piracy enforcement level, and users decide whether to purchase, copy, or not use the content. We find that voluntarily sharing its revenue with the ISP can lead to increased profits for the CP, non-decreasing profits for the ISP, and reduced piracy. More importantly, we find that although being characterized by low data usage raises the chance of achieving a revenue sharing contract, it also exposes the CP to higher levels of digital piracy

Copyright Trolls, Defining the Line Between Legal Ransom Letters and Defending Digital Rights: Turning Piracy into a Business Model or Protecting Creative from Internet Lawlessness?, 13 J. Marshall Rev. Intell. Prop. L. 170 (2013)

The scarlet letter of the term “troll” has long been affixed to the lapel of businesses within the patent context. This pejorative term, however, has had little relevance or widespread public recognition within the domain of copyright law until 2010. Since the awakening of the “copyright troll,” several non-author rights holders have recently adopted and propagated a substantially modified version of this sue-to-settle paradigm within the context of copyright law while introducing it to the scale of mass-litigation. Further, the amorphous term “copyright troll” traditionally characterizes a business practice of acquiring unenforced copyrights that are being infringed upon through various online media vehicles while monetizing the fundamental disconnect between the current copyright law and Internet users’ behavioral norms. Without typically authoring original works of expression, these businesses seek to extract rapid settlements from a nexus of antiquated intellectual property laws while chilling free speech and disincentivizing innovation. As a result of creative manipulation, both the original policy-backed intentions instilled by the Framers within the 1976 Act and the delicate balance between hyper- and hypo-enforcement have been patently disrupted. Moreover, the ramifications of “troll” litigation tactics have ensnared countless innocent users into costly litigation and settling unwarranted claims to avoid being perpetually associated with the illegal activity of online copyright infringement. As the scope of online copyright infringement continues to exponentially expand, this legal uncertainty acts as a catalyst for those willing to probe the outskirts of the Act. This comment focuses on three specific businesses publicly labeled as “copyright trolls,” details their evolution from hyperlinking to peer-to-peer file-sharing, and analyzes the current state of copyright law in the realm of the digital marketplace

Decreasing Copyright Enforcement Costs: The Scope of a Gradual Response

The digitization of copyrighted goods and the dematerialization of their distribution over the Internet have weakened copyright, a key institution of the creative industries. One factor affecting the value of copyright stems from the broadband roll-out, wherein copyright enforcement costs have become higher than the estimated benefits of copyright. This paper analyzes the causes of this situation and suggests how a graduated response to infringers may durably decrease copyright enforcement costs. Beginning with a review of the economic literature on copyright focusing on its industrial aspects, the study then analyzes how the consumers' impunity provides incentives to “free ride” on copyright all along the vertical distribution chain. This rapidly increases copyright enforcement costs. Next, the paper describes both the graduated response mechanism and the voluntary agreement which initiated this system in France. In conclusion, this study argues that increasing the cost of free-riding for the final consumer should lead to a decrease of copyright enforcement costs and, therefore, higher returns in the creative industries.Copyright, Creative industries, Regulation enforcement costs, Digitization, Graduated response.

Essays on the economic effects of Net Neutrality regulation

The questions of whether and how to regulate the Internet have been a topic of serious political discussion for some time now. In many ways the discussion is actually much older than the Internet itself, as the situation at hand has strong parallels to both the telegraph and the telephone. The question of Net Neutrality is one small part of that discussion. Net Neutrality is, in essence, a broad principle that says Internet Service Providers (ISPs) should not alter the quality of service based on the origin or type of traffic. In chapters 2 and 3 I examine the economic effect of possible Net Neutrality regulations in a number of different markets. Since an enormous number of Internet based businesses rely on either direct sales or a subscription model, chapter 1 focuses on businesses with a direct financial connection between content providers and consumers. I show that while priority service can increase efficiency, if the Internet Service Provider can charge for priority it has a strong incentive to distort the content providers' market and little incentive to increase infrastructure investment. Chapter 3 takes a similar approach but instead looks at markets where businesses are primarily funded through advertisement. This model reaches similar conclusions: there are strong possible efficiency gains from prioritizing some kinds of traffic, but no policy is likely to have a strong effect on investment and the dangers of upstream market distortion are considerable. As a result, both chapters suggest the optimal regulatory policy is one that allows prioritizing types of traffic without allowing the ISP to pick winners among the content providers. Chapters 2 and 3 make it clear that the effects of Net Neutrality regulation are directly tied to the monopoly status of the Internet Service Providers, so in Chapter 4 I examine the market structure in detail to better understand why the market is still so heavily concentrated. Capital constraints are clearly part of the issue, but distortions caused by bundling and local regulations appear to play a large role

A system dynamics analysis for the complementary integration of online contents distribution businesses and electronic payment businesses

Thesis (S.M.M.O.T.)--Massachusetts Institute of Technology, Sloan School of Management, Management of Technology Program, 2003.Includes bibliographical references (leaves 146-148).This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections.Problems are occurring in the digital business economy as companies try to realize a tangible profit. As network infrastructures improve, the value of information becomes less and less since marginal costs for digital goods is practically zero and searching the cost of goods is also extremely low. How, then, can the media industry remain profitable in the digital business economy? One way to retain the value of digital goods is through the use of firm governmental regulations, but this is still insufficient because of the ever-expanding network infrastructure and the growing threat of piracy. This thesis discusses potential strategies to be used in today's digital business economy based on current difficulties. It proposes an integrated business model for an on-line contents distribution business and an electronic payment business which complement each other. It is well-known that content distribution businesses are facing severe threats from piracy. By providing content for free as a complementary service for profitable businesses, it will be shown that media distribution companies can maximize the value of their contents library, which would otherwise be worthless in face of growing piracy. The thesis also discusses the migration process in an integrated business model by utilizing a System Dynamics approach to the analysis. The electronic payments business is regarded as a profit driver that can be complemented by the attractive value proposition of free online contents distribution businesses. For an infrastructure-oriented business like electronic payments, broad acceptance of such a service is critical to reducing customers' perceived risk. By introducing free content downloads, a business strategy is proposed that accelerates customer penetration and rapid migration to a profitable and integrated business of online contents distribution and electronic payment. By combining these two potentially successful two business models, a profitable business integration is proposed in which each business supplements the other in the digital business economy.by Hideaki Tomikawa.S.M.M.O.T