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Assessing the Impact of Policy Choices on Potential Online Business Models in the Music and Film Industries

The online environment and new digital technologies threaten the viability of the music and film industries' traditional business models. The industries have responded by seeking government intervention, among other means, to protect their traditional models as well as by developing new models specifically adapted to the online market. Industry activity and public debate have focused on three key policy areas related to copyright holders' control of content: technical interference with and potential liability of P2P services; copyright infringers' civil and criminal liability; and legal reinforcement of digital rights management technologies (DRM).

This paper seeks to support policymakers' decision making by delineating the potential consequences of policy actions in these areas. To do so, it assesses how such action would impact relevant social values and four business models representative of current and emerging attempts to generate viable revenues from digital media. The authors caution that government intervention is currently premature because it is unlikely to strike an appropriate balance between achieving industry goals while supporting other social values, such as consumer rights, the diversity of available content, and technological innovation.


Graphical Overview

The main body of the paper assesses the policy implications for each model comparatively while four appendixes evaluate each model (Digital Media Store, P2P Stores, Collective Blanket Licensing, and Ancillary Products and Services) in greater depth.


Comparison of whether seeking control across policy nodes would benefit model
  Sue illicit consumer distributors DRM Interfere with P2P Potential policy responses to support model
Digital Media Store Yes Yes Yes Increase support for control across all three nodes
P2P Stores Yes, but would enable legitimate distribution Yes No Increase sanctions for infringement and reinforce DRM, but protect P2P systems
Collective Blanket Licensing Yes, but would enable legitimate distribution No No Compel licensing of consumer distributors as per the model; remove control across nodes supporting other models
Ancillary Products & Services No, allow all distribution No No Remove rights to non-commercial copying and distributions; remove control across nodes supporting other models