The role of digital rights management as a solution for market uncertainties for mobile music

Abstract

This paper examines and categorises potential business model scenarios for music based on wireless technologies, henceforth referred to as Mobile Music. The virtualisation of Mobile Music leads to market uncertainties where offering parties on the supply side may not be able to sufficiently privatise it. On the demand side, due to changing cost structures for digital goods, consumers may not be willing to pay directly for such goods. As a result, revenues have to be collected indirectly by public or private entities. Business models for Mobile Music can therefore be categorised into four scenarios. In the first scenario, a model is proposed where Mobile Music is used to promote the traditional offline business. The second scenario proposes a model where consumers are willing to pay for additional services to access Mobile Music. The third scenario significantly differs from the above mentioned two, as music providers are expected to be able to protect their content by using digital rights management technology for subscription systems. In the final scenario, peer‐to‐peer technologies are used to show how Superdistribution allows consumers to share and recommend copy‐protected songs. The paper concludes with an analysis about the potential players in Mobile Music.