News: Eradicating DRM could reduce piracy

It may fly in the face of conventional logic, but new research conducted at Rice University and Duke University, suggests that eradicating the restrictions imposed by digital rights management (DRM) could actually help reduce piracy.

DRM is used to prevent the copying of unauthorised of digital media, such as music, and has long been favoured by the music industry as a means of protecting their intellectual property.

However, according to research by marketing professors Dinah Vernik from Rice University and Devavrat Purohit and Preyas Desai of Duke University, DRM restrictions were found have a negative impact on legal users. The professors’ study explained that as a DRM-restricted product will only be purchased by a legal user, only the legal users pay the price and suffer from the restrictions, while 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 the Jesse H. Jones Graduate School of Business. "Because of these inconveniences, some consumers choose to pirate."

Vernik elaborated that piracy can decrease when a company allows restriction-free downloads, because “removal of these restrictions makes the product more convenient to use and intensifies competition with the traditional format (CDs), which has no DRM restrictions," she continued.

According to Vernik, increased competition then results in decreased prices for both downloadable and CD music, making it more likely that consumers will move from stealing music to buying legal downloads. The research further asserted that copyright owners don't necessarily benefit from a lower amount of piracy. "Decreased piracy doesn't guarantee increased profits," Purohit said. "In fact, our analysis demonstrates that under some conditions, one can observe lower levels of piracy and lower profits."

Vernik, Desai and Purohit’s research paper Music Downloads and the Flip Side of Digital Rights Management Protection,is hoped to provide insights into the role of DRM. "[The late] Steve Jobs said it best: 'Why would the big four music companies agree to let Apple and others distribute their music without using DRM systems to protect it? The simplest answer is because DRMs haven't worked, and may never work, to halt music piracy.'" Vernik quoted.

"Our research presented a counterintuitive conclusion that in fact, removing the DRM can be more effective in decreasing music piracy than making the DRM more stringent," she concluded.The findings from the research are slated to appear in the November-December issue of Marketing Science.

In related news, Microsoft warned against online software pirates, asserting that counterfeit products don’t work as advertised.

Eradicating DRM could reduce piracy

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