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Effects of Regulation against Unlicensed Contents Sharing on the Contents Producers' Profit

불법복제에 대한 규제가 콘텐츠 제작자의 수익에 미치는 영향

  • Published : 2010.02.28

Abstract

As software producers have tried to keep their profit against illegal piracy, contents producers also want to protect their contents from unlawful sharing among users. Some researchers uncovered that the regulation on the unlicensed contents is not the best policy to maximize their profit mainly due to network effect but this issue has been still controversial. In this paper, we develop a model to investigate the effect of regulation against unlicensed contents sharing on the profit of contents producers and present the optimal condition to maximize profit of contents producers under the regulation and non-regulation of unlicensed contents. As a result, we analyzed that the firm's payoff under the regulation on unlicensed contents is not always greater than the payoff under the non-regulation because of network externality. If the additional utility from off-line purchase of type P consumers (who enjoy the additional benefit of off-line purchase) is large enough, then the firm's payoff is maximized without regulation.

Keywords

Regulation on Unlicensed Contents;Contents Sharing;Contents Piracy;Network Effect

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