Price Discrimination & Vertical Integration in the Entertainment Industry

Price Discrimination In The Music Industry A clear example of price discrimination in the entertainment industry is iTunes’ tiered pricing. Since the launch of iTunes in 2003 all downloads were priced at 99 cents. The tracks purchased were all DRM protected. In early 2009, Apple introduced a 3-tiered pricing system. Although the majority of the … Continue reading Price Discrimination & Vertical Integration in the Entertainment Industry

The DMCA (Digital Millenium Copyright Act)- An Overview and Case Study

The DMCA’s role is to protect copyright and intellectual property holders and ensure that they get paid for their works. It sets forth rules and consequences for those who circumvent DRM and illegally obtain copyrighted material. The purpose of the DMCA is to ensure that copyright holders get paid for their works, as well as, to make consumers and companies aware that if they don’t outright pay for obtaining the copyrighted material, the copyright holders can pursue civil actions against them and get compensated at a much higher rate (than they would have paid if they had not obtained it illegally). If the DMCA didn’t exist, the incentive to possess a copyright would decrease and potential copyright holders might have not develop new technologies and products (because of fear of not seeing payment for their efforts), which would stifle overall economic growth in the U.S. The DMCA also sets forth the notion that digital broadcasts for sound recordings will be paid for (via a statutory license) and also states that royalty rates will be set by law at fair market value which, ensures compensation for musicians, publishers, and record labels.