Removal of restrictions can DECREASE music piracy - Study at Rice University | Excerpt #infdist

10/7/2011

David Ruth
713-348-6327
druth@rice.edu

Amy Hodges
713-348-6777
amy.hodges@rice.edu

Removal of restrictions can decrease music piracy
New research from Rice and Duke challenges conventional wisdom that removal of restrictions would increase piracy levels

Contrary to the traditional views of the music industry, removal of digital rights management (DRM) restrictions can actually decrease piracy, according to new research from Rice University and Duke University.

Marketing professors Dinah Vernik of Rice and Devavrat Purohit and Preyas Desai of Duke used analytical modeling to examine how piracy is influenced by the presence or absence of DRM restrictions. They found that while these restrictions make piracy more costly and difficult, the restrictions also have a negative impact on legal users who have no intention of doing anything illegal. 

Their findings, which will appear in the November-December issue of Marketing Science, add to the ongoing debate about technology that limits usage of digital content.

Because a DRM-restricted product will only be purchased by a legal user, …"only the legal users pay the price and suffer from the restrictions," the study said. "Illegal users are not affected because the pirated product does not have DRM restrictions."

"In many cases, DRM restrictions prevent legal users from doing something as normal as making backup copies of their music," said Vernik, assistant professor of marketing at Rice's Jones Graduate School of Business. "Because of these inconveniences, some consumers choose to pirate."

The research challenges conventional wisdom that removal of DRM restrictions increases piracy levels; the study shows that piracy can actually decrease when a company allows restriction-free downloads.

"Removal of these restrictions makes the product more convenient to use and intensifies competition with the traditional format (CDs), which has no DRM restrictions," Vernik said. "This increased competition results in decreased prices for both downloadable and CD music and makes it more likely that consumers will move from stealing music to buying legal downloads."

via media.rice.edu

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