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Digital Rights Management: White Knight or Trojan Horse?

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Author Info
Thierry Rayna
Ludmila Striukova ()

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Abstract

Due to its ability to solve all main problems associated with digital goods, Digital Right Management is the favourite option used by companies to tackle piracy. The aim of this article is to discuss the consequences of DRM for consumers, firms and society. The rationales of DRM are discussed and the expected benefits for firms are presented. It is shown that the advantages brought by DRM to firms go beyond what would be needed for an efficient provision of digital goods. In contrast, consumers are likely to see few benefits in DRM. This article demonstrates that even a standard DRM system is unlikely to improve social welfare. The article concludes with some public policy and corporate strategy recommendations.

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File URL: http://www.efm.bris.ac.uk/economics/working_papers/pdffiles/dp07596.pdf
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Publisher Info
Paper provided by Department of Economics, University of Bristol, UK in its series Bristol Economics Discussion Papers with number 07/596.

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Length: 19 pages
Date of creation: Apr 2007
Date of revision:
Handle: RePEc:bri:uobdis:07/596

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Related research
Keywords: Digital Right Management; Digital Goods; Piracy; Excludability; Durability; Sampling;

Find related papers by JEL classification:
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
O3 - Economic Development, Technological Change, and Growth - - Technological Change

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This page was last updated on 2009-12-11.

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