Introduction
Consumers have various methods, channels, and possibilities for accessing, copying, using, sharing, and providing digital content. They can either copy it illegally over peer-to-peer networks or purchase it by downloading the files from legal music providers such as i-Tunes. In that respect, content control is one of the most important aspects for content providers to fight piracy and also to successfully distribute and commercialize digital content. However, when implementing control systems, such as Digital Rights Management Systems (DRMS), it is unclear what the effects on consumer behavior are and whether consumers accept such restrictions and to what extend. It is therefore very important to understand the implications of the implementation of DRMS on consumer behavior, choices and the resulting demand for originals. The questions are: Do consumers accept specific technology requirements for legal downloads and are there any differences between technologies? Do consumers accept usage or rights requirements on digital content and are there any differences? These questions will be discussed in this article and we provide first empirical results about the consumer acceptance of Digital Rights Management Systems in that respect.

Empirical study
The study is based on a sample consisting of about 500 students, which is a sufficiently large number to represent the wide diversity of students adequately. We got 174 responses from the anonymous web-questionnaire. Although students do not represent the entire consumer segment, they account for a considerable proportion of all consumers of these products and are part of a consumer group in which copying and sharing of digital content is prevalent. Students are also part of the group which has already been identified as being more prone to copyright violations and piracy.

Consumer acceptance of technological requirements
There are a number of technologies used by DRMS that control the access to and the usage of digital content. The respondents were therefore asked which of the various technologies used would keep them from downloading content legally. A 5-point Likert scale was used to measure the acceptability of the various technologies from a consumer’s point of view. The Likert scale ranged from 1 (strongly disagree), over 2 (disagree), 3 (indifferent/undecided), and 4 (agree) to 5 (strongly agree). The question asked was: Which of the following (technological) requirements would keep you from downloading legally? The technologies to be rated were: The requirement of a username, the requirement of a password, the encryption of content, the presence of an embedded watermark on the content, the need for specific software to use the content, and the need for specific hardware. The results are provided in Figure 1, in which the horizontal line represents the various DRM technologies used and the vertical line the rating of each, represented by the median value.

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Figure 1: : Technological requirements

Technologies perceived as obstacles form a consumer’s perspectives are encryption and the necessity for specific software and hardware to use the digital content. The technologies not perceived as obstacles by respondents are the requirements for a username and a password. Respondents seem to be indifferent to watermarks or not having any clear idea. However, two questions arise when a Likert scale is used: Does the question measure the perception in a useful way? Second, does the scale measure what it is meant to measure? In that respect we have to conduct a reliability and validity test of the answer provided. One way to measure the reliability and validity is by calculating a Cronbach alpha. We obtained a value of α = 0.7970, which is higher than the required α = 0.6, indicating that the results obtained are consistent and reliable.

Consumer acceptance of rights restrictions
Content providers grant consumers various usage rights and attributes of these rights for the digital content acquired, most often expressed in a rights model. These rights can include the right to play, copy, burn, or move the content where the attributes of rights might be the number of times a song can be copied onto a CD. In most cases, they are expressed in a rights language such as XrML or ODRL. The questions arise, which of these rights restrictions and underlying attributes of rights consumers are willing to accept? Are there differences for the various rights and if so, which? We therefore asked the respondents to rate a variety of statements, each including a type of right (play, burn, and copy/move) and an attribute of that right. The question asked to respondents was: Which of the following (rights) restrictions would keep you from downloading legally? The statements to be evaluated were: Limited playability (in number), limited burning on a CD/DVD (in number), limited copying onto a PC (in number), limited copying onto mobile devices (in number), limited encoding into other file formats (conversion), and limited playability (in time). Again, a 5-point Likert scale was used to rate these statements, ranging from 1 (strongly disagree) to 5 (strongly agree). The results are illustrated in Figure 2, where each statement is outlined on the horizontal line and the median value recorded for it provided on the vertical line.

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Figure 2: Rights restrictions

According to Figure 2, any restriction on playability (either in the number or in time) is not going to be accepted by consumers, as consumers perceive it as a constraint in their use of the digital content. The restrictions on the right to burn, copy onto a PC, and copy onto mobile devices are not perceived as key obstacles by respondents and might therefore be acceptable as also other studies have shown. Finally, respondents were indifferent about the possibility of converting media files from one format to another (i.e., encoding). As in the previous question, we conducted a reliability and validity test for the scale used and the answers provided. We arrived at Cronbach α = 0.8646, which is higher than the required α = 0.6 and thus indicates that the results obtained can be accepted as consistent and reliable.

Bottom line
Consumers have different options for acquiring digital content, either to pirate or to purchase. Thus far, the possibilities to copy or pirate for consumers, especially for music, are diverse, easy and most of the time of low risk in terms of security threats such as viruses or legal prosecution. Implementing control systems like DRMS may make purchasing less attractive than copying for consumers as the legal products restrict them in their usage. However, the question arises which of these technologies and rights restrictions consumers perceive as obstacles and hence may reduce the utility of the original. Our results have shown that consumers dislike encryption and the requirement for specific software and/or hardware to use the digital content, and they don't like any restrictions on playability. Overcoming these obstacles may be a way for content providers to make some consumers switch from copying to purchasing, or even to make consumers switch from not consuming any digital content to purchasing it online.

Sources
  • Fetscherin, M. (2005): Implications of digital rights management on the demand for digital content, Bern, 2005 (PhD Thesis, to be published).

About the author: Marc Fetscherin is currently a Fellow at Harvard University, at the Centre for Business and Government (CBG). Prior to Harvard, he was a visiting researcher at the University of California at Berkeley and a PhD student at the University of Bern. He holds a master’s degree from the University of Lausanne and the London School of Economics (LSE). He is also a former consultant of McKinsey & Company. He is the author of many articles, book chapters, conference proceedings and presentations. He is also member of the EU expert group on DRM. Contact: marc_fetscherin@ksg.harvard.edu

Status: first posted 30/05/05; included in INDICARE Monitor Vol. 2, No. 3, 30 May 2005; licensed under Creative Commons
URL: http://www.indicare.org/tiki-read_article.php?articleId=105