DRM Increases Piracy, Punishes Legal Users

The forum-goers and blog readers of the gaming industry have long been saying that DRM is useless and effectively punishes legal purchasers of a piece of software over those that will download it illegally. Sometimes fan reaction has caused the developer to think about changing its plans, usually not.

Marketing professors Dinah Vernik of Rice and Devavrat Purohit and Preyas Desai of Duke have been doing a little research into "how piracy is influenced by the presence or absence of DRM restrictions." They found that the DRM does make piracy more expensive and harder to do, but that's it. Once it's been done, anybody can get it for free, However, legal users are going to feel the effects of the DRM throughout their gaming experience.

Within the study, which was specific to the music industry but the findings of which could be easily applied elsewhere, Vernik said "Removal of these restrictions makes the product more convenient to use and intensifies competition with the traditional format (CDs), which has no DRM restrictions. This increased competition results in decreased prices for both downloadable and CD music and makes it more likely that consumers will move from stealing music to buying legal downloads."

The paper is to be part of the November-December issue of Marketing Science.