From Software Business Community

Cost effectiveness of DRM

Cost effectiveness of DRM compares the expenditures of implementing and using digital rights management techniques to it's outcome of desired effects. Goals set to be accomplished with DRM usually consist of protecting digital goods from piracy.

Definition of Cost effectiveness of DRM

Cost effectiveness of DRM compares the expenditures of implementing and using digital rights management techniques to it's outcome of desired effects. Goals set to be accomplished with DRM usually consist of protecting digital goods from piracy (and strengthening legal distribution of the good), enabling e-commerce of digitally transferable goods, etc. These goods are commonly referred to as intellectual property to which the owner assumes certain exclucive rights. The question is whether DRM systems are necessary and helpful from a producer’s perspective and what impact they could have on the demand and supply of information goods ^[1].

See more detailed description of the functionalities of DRM in the Article: Digital Rights Management. For more thorough description of the intellectual property rights enforced by DRM, see Article: Intellectual Property Rights.

Cryptology has produced excellent tools for protecting media, but high motivation of consumers to tamper with DRM systems, and the insistence of vendors to base these systems on proprietary technology, has severely affected their efficiency. ^[2]

There's public concern that too rigorous DRM–systems could interfere with public interest in some cases and no protection of copyright could destroy branches of the industry. There's a delicate balance to be found in using DRM technologies: it shouldn't affect customer experience in a negative way while still protecting the delivered content from copyright infringement. ^[1]

Cost effectiveness of DRM is hard to measure but some studies of (perceived) effectiveness of DRM exist. In a study of DRM usage in music, film and print industry, it was found that a majority (80%) of the respondents were satisfied of their protection at that time (all of which used encryption technologies). Over half of the respondents intended to enforce their protection in response to the fear of growing piracy. Furthermore, half of the respondents from the music industry didn't believe in the success of DRM systems to reduce piracy. ^[3]

Thorough studies on the effectiveness of DRM is very hard to find. The reports from the industries are not very detailed and they are often subjective. For example it is really hard, if not possible, to estimate how much an industry would have grown without the influence of the Internet and piracy. The amount of copies pirated would certainly not have been bought from legal channels if there would have been effective measures inhibiting piracy in the first place. It is also argued that illegal copying is sometimes even beneficial towards selling copies and it could help especially with phenomenon like the "long-tail effect".

It is said that for DRM to be truly efficient, it has to be based on open standards and focus on protecting the media item rather than the delivery channel. A single copy stolen from a protected channel can be easily distributed all over the Internet without any restraint. ^[2]

Types of XY

Relevance to software business

Example of the phenomena

Theoretical approaches

Currently interesting research questions

Links to related articles

• Intellectual Property Legislation
• Business models on DRM
• Cost effectiveness of DRM
• Digital rights management
• Intellectual property rights

See also

References

1. ↑ ^{1.0 1.1} T. Bauckhage, Digital Rights Management: Economic Aspects The Basic Economic Theory of Copying (Book chapter), LNCS 2770, 2003
2. ↑ ^{2.0 2.1} Z. Lifshitz, Digital Rights Management - a zero-sum game?, EUROCON, 2003
3. ↑ M. Fetscherin & M. Schmid, Comparing the Usage of Digital Rights Management Systems in the Music, Film, and Print Industry, ACM International Conference Proceeding Series (Vol. 50), 2003