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Thursday, February 17, 2005

P2P,DRM, Government Regulations & Free Market Models

(Via Adam Thierer) Michael A. Einhorn and Bill Rosenblatt have come with an excellent paper outlining many innovative business models and technological solutions already being deployed in the marketplace demonstrating,a well-functioning marketplace is currently at work.The term "peer to peer" (P2P) refers generally to software that enables a computer to locate a content file on another networked device and copy the encoded data to its own hard drive. P2P technology often attracts people who use it to reproduce or distribute copyrighted music and movies without authorization of rights owners and this has been one of constant controversy and calls by many in the content industry to regulate or even ban P2P-based networks or software. Copyright owners often use digital rights management (DRM) techniques to encrypt content or otherwise restrict access.Depending on the access or compensation arrangement, content owners may differentiate prices and limit use by the number of plays, duration of access, temporary or partial uses, lending rights, and the number of devices on which the file may be accessed. The potential level of use control may go beyond the expectations of consumers accustomed to a broader range of uses enabled by analog technology. Many consumer advocates now contend that DRM is harmful to consumers because it tilts the balance of control in favor of copyright holders.Rights owners respond that DRM merely offsets grave dangers made possible by digitization and Internet distribution. This study argues that the basic functions of DRM and P2P can be quite complementary and that innovative market mechanisms that can help alleviate many copyright concerns are currently blossoming. Free markets should determine potential synergies, responses, and outcomes that tap different P2P and DRM business models. In particular, market operations are greatly preferable to government technology controls.
The full report is available here.

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