Rights Management
Competitive Strategies for Network Economies
Economics of Information - Mike Shor 2
Overview
Legal Approach Enforcement Approach Business Model Approach
Economics of Information - Mike Shor 3
Legal Approach First sale controversy
Copy protection, right of subsequent use Permanence
Publication vs. “fleeting image” Fair Use
“General benefits derived by the public” Monetary Ramifications
Framing, deep-linking Time and space shifting
Sony, Xerox, and Napster
Economics of Information - Mike Shor 4
Legal Approach Where has publication occurred?
What furthers the “promotion of knowledge?”
What is a “copy” ?
Laws are reactionary! Contracts instead of property rights.
Economics of Information - Mike Shor 5
Enforcement Approach Watermarks (Digimarc) Web Crawlers (RIAA) “Reattaching the bits” (Hardware
Keys)
No enforcement for noncreative worksDatabasesScientific Knowledge“Trail of Argument”
Economics of Information - Mike Shor 6
Enforcement Approach But: Technologists are hard to stop
And: Protection lowers value for honest consumers
Small scale piracy hard to stop! Internet: small scale on a large scale!
Economics of Information - Mike Shor 7
Customer Acceptance What level of convenience are we willing
to give up for copyrights?
Hardware keys Active CD insertion
In all cases – DRM lowers valueOnly question is “how much”?ex. Microsoft Windows XP
Economics of Information - Mike Shor 8
Business Model Approach
“The first line of defense against pirates is a sensible business model.”
Make the content easier to buy than steal Promote traditional product with free
digital content Focus on Auxiliary Markets Pricing for Copying!
Economics of Information - Mike Shor 9
eMusic
Make the Content Easier QUALITY to Buy than Steal
Per Use (no longer available)MP3 single: $0.99MP3 album: $8.99
Per Time (unlimited download)Month: $15Year: $10 / monthOne month free
“MP3s hosted at EMusic - not someone's bedroom”
Economics of Information - Mike Shor 10
Cross-Promotion Promote traditional product with free digital
content CONVENIENCE
Tom Pettyreleased new song track for free on the web
CreedTop single from “Human Clay” released freeAlbum debuted at Billboard #1
Economics of Information - Mike Shor 11
Grateful Dead Focus on Auxiliary Markets
DEMAND CREATIONPermitted taping of live showsPermitted distribution of live bootlegsReleased for free live recordings
Increased concert attendanceStrategically played new material liveGenerated interest in new studio recordings
Economics of Information - Mike Shor 12
Unfortunate Fact
The business model approach implies that the price charged depends on the added value of information flow above that obtainable by illicit means
Economics of Information - Mike Shor 13
Pricing for Copying! If it is inevitable, make it work for you. Copiers need an original
Library journal rates Early VHS releases Franchising
Metrowerks CodeWarriorMac and Windows versions on separate CDsOne CD for documentationEncourage copying among low-value users
Economics of Information - Mike Shor 14
Pricing for Copying! Pricing to copiers is like bundling in
reverseSell one copy to multiple users, instead of
sell multiple goods to one userProfit advantage remains – group pricing
Challenge: small groups are easier to manage and price
Economics of Information - Mike Shor 15
A Unified Approach Legal
Maintain the right to your property
EnforcementMaintain “universal access” only for youKeep copying rings small or offline
Business ModelLeverage universal accessLet copying promote your product“Bundle” to small copying rings