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

  • Dongook Choi

    ()

    (ESSEC Business School, France)

  • Yeonbae Kim

    ()

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

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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File URL: ftp://147.46.237.98/DP-72.pdf
File Function: First version, 2010
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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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Phone: +82-2-880-8386
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Web page: http://temep.snu.ac.kr/
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  1. Peitz, Martin & Waelbroeck, Patrick, 2004. "An Economist's Guide to Digital Music," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 32, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  2. Iimi, Atsushi, 2005. "Estimating demand for cellular phone services in Japan," Telecommunications Policy, Elsevier, vol. 29(1), pages 3-23, February.
  3. Kaiser, Ulrich, 2001. "The effects of website provision on the demand for German women's magazines," ZEW Discussion Papers 01-69, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. Rob, Rafael & Waldfogel, Joel, 2006. "Piracy on the High C's: Music Downloading, Sales Displacement, and Social Welfare in a Sample of College Students," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 29-62, April.
  9. Bae, Sang Hoo & Choi, Jay Pil, 2006. "A model of piracy," Information Economics and Policy, Elsevier, vol. 18(3), pages 303-320, September.
  10. 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.
  11. Stan J. Liebowitz, 2005. "Economists Examine File-Sharing and Music Sales," Industrial Organization 0505001, EconWPA.
  12. Domon, Koji & Yamazaki, Naoto, 2004. "Unauthorized file-sharing and the pricing of digital content," Economics Letters, Elsevier, vol. 85(2), pages 179-184, November.
  13. Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2, March.
  14. 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.
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