Abstract
Abstract The purpose of this paper is to investigate how digitalization affects vertically related content industries with the threat of piracy. We construct a model of vertical relationship where an upstream [a downstream] firm is considered as a content provider [a retailer]. Three business models are proposed depending on who has the right to implement digital rights management (DRM): a vertically-integrated entity, an upstream, and a downstream. First, we analyze how different modes of control on DRM affect the optimal prices and the level of copy protection. The results are dependent upon the different control modes of DRM and the degree of opportunistic behavior responding to increasing piracy costs. Second, we analyze the effect of two types of piracy depending on distribution channels (non-digital versus digital). Strengthening intellectual property rights (IPR) protection results in a price hike for both cases, while we have opposite changes in quantities depending on the types of piracy.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
