New Delhi: DRM (Digital Rights Management), the controversial technology used to prevent copying and sharing of digital content, has also been criticised for not doing much good for the companies whose bottomlines it was meant to protect. Now a new study further reestablishes the belief.
According to a study by University of Toronto researcher Laurina Zhang removing DRM from music files led to an increase of 10 per cent in digital music revenue sales. But, according to Zhang, the less-popular albums get a higher boost in sales by DRM removal while popular albums appear to benefit less.
Zhang paper compared the sales of 5,864 albums from 634 artists from before and after the music industry removed DRM. "I exploit a natural experiment where the four major record companies - EMI, Sony, Universal, and Warner - remove DRM on their catalogue of music at different times to examine whether relaxing an album's sharing restrictions impacts the level and distribution of sales," she explains.
"I find that removing DRM increases digital music sales by 10 per cent. However, relaxing sharing restrictions does not impact all albums equally; it increases the sales of lower-selling albums (i.e., the long tail") significantly (30 per cent) but does not benefit top-selling albums. My results are consistent with theory that shows lowering search costs can facilitate the discovery of niche products," Zhang says.
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