Chapter 4Rights Management, Part II
Patrick Léger
MGT-523
Overview Impact of lower reproduction costs
– Historical examples– Leveraging lower costs
Intellectual property– Choosing terms and conditions– Transaction costs
Where are we heading?– Open source movement– Microsoft.NET– Digital Rights Management (DRM)
Lower Reproduction Costs
Is this new?
Historical examples:
– Library
– Photocopier
– Video
Potential Opportunities
Benefit from economies of scale
Grow your market
Maximize the value of intellectual property, don’t overprotect it
Intellectual Property
More liberal IP policies tend to make products more valuable to users
This increases demand, but….– Can companies ask higher prices?
Liberal terms means lost revenues to resale/substitution
More Intellectual Property
Successful firms will find the right balance
Policies should also minimize transaction costs for buyers and suppliers– Site licensing
Open Source Software
Free distributions continuously available (Linux, Apache, StarOffice, etc)
Rapidly increasing quality
Fast development cycles, network effect, and innovation
Licensing Terms of Open Source Freedom to share and change software
– Freedom as in “free speech,” not “free beer”– Redistribution freedom (program + source)– Freedom to integrate into new software– Can charge for services/products if you wish
Responsibilities:– Must give recipients all the rights that you have– No warranty on software– Cannot make software proprietary through
patents
Source: GNU General Public License, www.fsf.org
Open Source & Traditional Software Firms (…my unsolicited opinion)
Disruptive force Operating systems and basic applications
increasingly commoditized Support/consulting/training Increasing specialization in software market Seize the opportunity, don’t be threatened Grow the market
Microsoft.NET
Software as a service Easier management of licensing terms Reduced transaction costs Economies of scale on development Leverage role of WWW Higher customization/self-selection Deflect regulatory pressure (FTC)
Digital Rights Management (DRM) Aims to disseminate digital information
easily, while preserving copyright protection
Greater demand for these solutions in response to copyright infringement
Digital watermark & required infrastructure– Contents of watermark– Embedded into many media players
Will this work?
Summary:
Use lower reproduction costs to your advantage
Maximize the value of your intellectual property without overprotecting it
Watch for emerging trends in Rights Management
Discussion