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Effects of Piracy and Digital Rights Management on the Online Music Market in Korea

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  • Dongook Choi

    ()
    (ESSEC Business School, France)

  • Yeonbae Kim

    ()
    (Technology Management, Economics, and Policy Program (TEMEP), Seoul National University)

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    Abstract

    This study attempted to identify the relationship among user demand for online music, unauthorized file-sharing activities (piracy), and the effect of digital rights management (DRM) in Korea. Empirical analysis showed that piracy and DRM have negative effects on the demand for online music. In addition, DRM augmented piracy during the study period, resulting in a negative overall effect on demand.

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    Bibliographic Info

    Paper provided by Seoul National University; Technology Management, Economics, and Policy Program (TEMEP) in its series TEMEP Discussion Papers with number 201072.

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    Length: 26 pages
    Date of creation: Dec 2010
    Date of revision: Dec 2010
    Publication status: Published later version in the journal of innovation studies of Korea Society of Innovation
    Handle: RePEc:snv:dp2009:201072

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    Related research

    Keywords: Online music; digital music; digital rights management; file sharing; piracy.;

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    References

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    1. Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2, Spring.
    2. Peitz, Martin & Waelbroeck, Patrick, 2006. "Piracy of digital products: A critical review of the theoretical literature," Information Economics and Policy, Elsevier, vol. 18(4), pages 449-476, November.
    3. Belleflamme,Paul & Peitz,Martin, 2010. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9780521681599, April.
    4. Peitz, Martin & Waelbroeck, Patrick, 2006. "Why the music industry may gain from free downloading -- The role of sampling," International Journal of Industrial Organization, Elsevier, vol. 24(5), pages 907-913, September.
    5. Cunningham, Brendan M. & Alexander, Peter J. & Adilov, Nodir, 2004. "Peer-to-peer file sharing communities," Information Economics and Policy, Elsevier, vol. 16(2), pages 197-213, June.
    6. Rafael Rob & Joel Waldfogel, 2004. "Piracy on the High C's: Music Downloading, Sales Displacement, and Social Welfare in a Sample of College Students," NBER Working Papers 10874, National Bureau of Economic Research, Inc.
    7. Iimi, Atsushi, 2005. "Estimating demand for cellular phone services in Japan," Telecommunications Policy, Elsevier, vol. 29(1), pages 3-23, February.
    8. Felix Oberholzer-Gee & Koleman Strumpf, 2007. "The Effect of File Sharing on Record Sales: An Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 115, pages 1-42.
    9. Domon, Koji & Yamazaki, Naoto, 2004. "Unauthorized file-sharing and the pricing of digital content," Economics Letters, Elsevier, vol. 85(2), pages 179-184, November.
    10. Bae, Sang Hoo & Choi, Jay Pil, 2006. "A model of piracy," Information Economics and Policy, Elsevier, vol. 18(3), pages 303-320, September.
    11. Martin Peitz & Patrick Waelbroeck, 2004. "An Economist’s Guide to Digital Music," CESifo Working Paper Series 1333, CESifo Group Munich.
    12. Zentner, Alejandro, 2006. "Measuring the Effect of File Sharing on Music Purchases," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 63-90, April.
    13. Stan J. Liebowitz, 2005. "Economists Examine File-Sharing and Music Sales," Industrial Organization 0505001, EconWPA.
    14. Ulrich Kaiser, 2002. "The Effects of Website Provision on the Demand for German Women's Magazines," NBER Working Papers 8806, National Bureau of Economic Research, Inc.
    15. Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer.
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