Digital content provision and optimal copyright protection

摘要

Many digitized products such as e-books, games, music, software and video are facing a major threat from piracy. It is very easy to copy any of the broadcasted programs without losing quality and can be shared through the internet. Unauthorized duplication of movies and movies is causing great concern in the business as it leads to loss of revenue to the distributors and producers. The present day recording technology has made it easy to copy the products with less effort and cost. This has resulted in grave situation where the concerned are looking forward for methods to protect intellectual property. Many such incidences are leading to lawsuits against such copying. Another approach employed using serial numbers, key-files, software registrations, digital water marks etc. Another approach is to make the antipiracy laws more stringent to create fear in the minds of piracy seekers. Since many of these efforts have failed many firms are now relaxing their copyright protection approach itself by making their products free in the internet. It is also argue that software piracy increases the industry-sales. This paper examines the two fundamental problems the impact of stricter anti-piracy efforts on the improvement of profitability of the firm, the extent antipiracy efforts help improve the quality of the products. This study considers a firm that sells a product that can be pirated. There are two types of customers. One customer would like to opt for licensed product for which full support is available. Another type of customer accepts both types of products. Consumers know the value of the product and the copyright protection attached to it. When they search they know the optimal behavior of the firm. In the basic model, the study focuses on the interaction between the price setting and the consumer search. A stricter copyright protection rule can enforce more demand for the genuine product. In such a situation it is advantageous to protect the copyright. However a stricter copyright protection can lead to higher price setting and the consumer search may be reduced because of this and due to higher search cost. A lenient copyright protection policy can benefit the firm through encouraging more consumer search. Conditions are established when the firm may opt for imperfect of zero copyright protection methods as its optimal strategy. With strict copyright protection policy, the firm may have less consumers who search for the product, otherwise the number of customers will increase under lenient anti-piracy enforcement resulting in more customers searching for the product. Firm's decision on quality provision is also included in the model as extension. (34 refs.)