The Problem of Excludability for Media and Entertainment Products in New Electronic Market Channels

While there may be a substantial potential for media and entertainment products in new electronic market channels, content producers and owners remain sceptical and are cautious to utilize these new market opportunities. Piracy and the fear of losing control over their property in the new channels constitute the basis for their scepticism. Applying a public good approach to the economic analysis of this problem reveals that there is no easy way of circumventing the problem, but that it may be most successfully solved by increasing the degree of excludability for media and entertainment content also in these new channels. Excludability is a nonintrinsic economic product characteristic, which may be adjusted through a combination of property rights and technology. Further institutional and technological efforts towards establishing excludability will thus encourage e-commerce with media and entertainment products. While alternative solutions such as first release strategies and claiming payments from relate...