The content holders now face more challenges than ever before on a global basis because of the digital copyright law. Because of the advancement in the digital technologies the content industry now has a lot of ways through which they can publish the product and services such as: CDs, DVDs and MP3s. Although the CDs and the DVDs are sold through the usual ways but the digital format has given customers the opportunity to make use of a more flexible working models. Because of the availability of the copyrighted media on the internet they can now download individual songs rather than the complete albums and people can download these songs on their iPods and home computers etc. (Lipton, 2009).
These copyright laws have created many comforts for the customer and the content holders as well as they can now make multiple copies of their material at the click of a button. But along with this these developments, they have made it equally easy for the infringers to commit piracy in hundreds of ways and it is very difficult to catch them. This is not only because it is very easy for someone to become anonymous on internet but because of the jurisdiction issues as well. Due to this the content holders can't really know who is committing the piracy let alone think about dealing with the jurisdiction issues (Lipton, 2009).
Some precautionary measures have been taken by the content holders in order to track down the infringers; some of these measures are based on the typical copyright doctrine while there are others which had required new legislation. Digital Millennium Copyright Act of 1998 ("DMCA") is an example of the new legislation and in it a variety of online content industries concerns have been addressed. However, there are some features of these new legislations which are debatable in nature as they have provisions that are anti-trafficking anti-circumvention in nature (Lipton, 2009).
The advancement and the development in the technologies have not affected science alone but it also has had some affect on the art as well. The artistic work is now recorded and then displayed in a way that it had never been done in the past and all this is due to the advancement in the technology. Now it is hardly a click's away for the users to not only download the songs of upcoming movies but to also watch their trailers and download them without the quality being affect at all and share all that media stuff with friends on the internet network in a matter of seconds, this kind of sharing had never been possible in the past (Gee and Ivanova, 2006).
With the increased availability and chances of copying the online information it has more and more difficult to catch the pirates or the infringers. Literally millions and millions of people are copying and downloading the copyrighted files and movies through the peer-to-peer and other networks of the sort. Because of this trend of not respecting and following the copyrights, the Digital Rights Management (DRM) solutions has been developed which helps in the reinforcement of the restrictions. All and any kind of digital content may it be songs, movies, content related to cell phones etc. is today being protected by the DRM solutions (Gee and Ivanova, 2006).
The roles of the owners, the people who used the digital works as well as the providers were redefined by the technical protection of the work that was copyrighted. Groups of new players came to the market and the main reason behind these players introduction into the market was the technical protection of the work that was copyrighted, DRM is the major example of such a group. There is a lot in common amongst the DRM shares' economy and the analyses of the innovation incentives, network economics, intellectual property rules and competition standards. However, the digital rights protection isn't really catered to in the standard models that are present in the economic literature (Gee and Ivanova, 2006).
With the emergence of DRM there emerged an upcoming trend of academic literature on the subject. Although this economic literature is still emerging and it is still at a very early stage of its development but a lot of studies have already been published and most of them are on the technical protection's legal aspects and intellectual property rights' subsequent implications (Gee and Ivanova, 2006). A paper of a similar kind was published by Park and Scotchmer in 2006 in which they discussed the preferences of the content vendors with regards to the shared or the independent DRM system. Shared DRM system here means a system that is being shared by many content holders. According to Park and Scotchmer it is a lot better to use the shared DRM system for the following reasons (Park and Scotchmer, 2006):
The cost of maintaining one shared DRM system will be a lot less than maintain an independent system.
A shared DRM will be a lot more attractive to the hackers as they can get a lot of stuff by hacking into the system that is being shared by many. However, this danger can be reduced if the owners of the DRM keep the price for using their content really low. Although doing this might affect their profits a little but in the long run they will be serving the public in a lot better way and this will help in the reduction of the hacking trend (Park and Scotchmer, 2006).
Although according to the publications of Park and Scotchmer single shared DRM system should be used and there should be standardization in that system. However, at the moment most of the companies prefer using their own DRM systems and all these companies have their own particular pricing structures as, they use various different business models. Although the prices of the online content like movies and videos had decreased a lot due to the competition along with lesser number of restriction for the customers now (Pang, 2006).
Intellectual property rights or IPR protects the creative work and it encourages people to be creative and come up with unique ideas. The main goal of IPR is to provide the people with incentives to innovate and invest in work of new kinds and IPR makes use of trade secret, copyright and patent to achieve this goal. In the content creation sector the IPR encourage the people by making sure that their work is not being exploited, for example; it is not being pirated etc. And that the people doing all the creative work get their deserved about of return on their work (Pang, 2006).
United States and Europe are two places where the use of technology is increasing day by day and therefore, to protect the copyrighted work new legislation has been approved along with the traditional IPR. It was in 1998 that the Digital Millennium Copyright Act (DMCA) was introduced in the United States. What the DMCA does is, it protects the work which comes under the title for forbidding it circumvention through any kinds of technological measure that can successfully control that work. DMCA covers the copyrighted as well as the non-copyrighted work. Therefore, if there is some un-copyrighted work by some technology such as, DRM it has same restrictions applicable to it as the work that is copyrighted (Pang, 2006).
Legislation similar to DRM was enacted in Europe in 2001. The content owners are given rights by the European Copyright Directive (EUCD) to restrict exhibition, reproduction, or distribution of their work (Gee and Ivanova, 2006).
The DMCA and EUCD's anti-circumvention provisions put limitations on the individuals instead of the standard copyright law. This kind of attitude give rise to the question like where is the balance between the rights of the individuals and that of the content owners as, it is very important to keep a balance between the two for the smooth running of the organizations (Gee and Ivanova, 2006).
DRM solutions are being used by the online music stores to a large extent. With the help of the DRM solution these online stores can restrict the number of times a song can be downloaded by the customers. Or they can also put an expiration date on the downloaded songs. This is completely opposite to what the customers can do on the CDs, i.e. play as many times as they want and for this reason this kind of attitude produces disutility and dissatisfaction among the customers who like to have a very flexible business approach. However, a huge benefit of DRM solutions is that the rules and the limitation can be changed by the owners as and when they want. These owners can observe the trends of the market and decide what limitations they want to remove and which they want to put up (Gee and Ivanova, 2006).
Therefore, people might feel that the customers don't get the fair rights when it comes to DRM solution but the…