A game we all win: Dumping DRM can increase sales while reducing piracy

 Internet News, Law, Marketing  Add comments
Oct 112011
 

The standard line that Digital Rights Management (DRM) functions as a bulwark against online music piracy is being challenged by a trio of economists from Rice and Duke Universities. Their game theory research sides with a growing sentiment that DRM technologies which restrict music file copying and moving sometimes encourage illegal file sharing instead.

“In many cases, DRM restrictions prevent legal users from doing something as normal as making backup copies of their music,” contends one of the researchers, Dinahy Vernik, assistant professor of marketing at Rice’s Jones Graduate School of Business. “Because of these inconveniences, some consumers choose to pirate.”

The paper in question is titled “Music Downloads and the Flip Side of Digital Rights Management Protection.”

Under certain conditions, “we find that eliminating DRM restrictions can lead to an increase in sales of legal downloads, a decrease in sales of traditional CDs, and a decrease in piracy,” conclude marketing scholars Vernik and Devavrat Purohit and Preyas Desai of Duke. “This is in stark contrast to the view that removing DRM will unconditionally increase the level of piracy.”

via A game we all win: Dumping DRM can increase sales while reducing piracy.