The information age has created a host of digitized products — in the realms of software, databases, music, videos and electronic books — that can be produced and distributed with low variable costs, resulting in high gross margins. The key to profitability for creators of these products is to generate enough unit sales to offset their high development costs. But the ability to produce and distribute these products quickly and cheaply is not limited to the original content creator, and the potential for piracy, defined as duplication and distribution of a product without the permission of or payment to the content owner, is extremely high. One of the greatest challenges to digital business is figuring out how to maintain a profitable model in the face of widespread unauthorized competition.
Up to now, efforts to control piracy have relied on the assumption that creators of digital products have absolute ownership rights to the digital content they create. For example, on the basis of that assumption, recording companies and their artists have pursued an aggressive, allegedly successful legal challenge against the file-sharing sites MP3.com and Napster. Under the same assumption, several software firms have sought to limit piracy with contractual as well as technological safeguards such as click-wrap contracts, encryption, password-limited access to distribution sites and copy proofing.
However, because the belief in absolute ownership of digital content... To read the complete article, login or sign-up using the form below.
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