Case Study of Apple, Inc. for Business Law Students: How Apple's Business Model Controls Digital Content Through Legal and Technological Means

Abstract:     
This article explores how Apple's business model makes use of content licensed from third-party music labels that is in digital format, and how it delivers the service to consumers over the internet. Control of content and profits are the two top goals of the music labels - yet the goals of the music labels' customers are in stark opposition to those goals, since users wish to use the content in different ways and formats, and they have become very averse to paying for content, which becomes easy when content is digital. Since the music labels have in effect conceded distribution of their products to Apple, for one, Apple has found itself in the middle, at once adhering to its contractual duties under agreements with the music labels, while enticing customers and profiting from its user-friendly interface and platform. Apple must both control content - to avoid lawsuits, and sell the content - to continue its iTunes service.

Number of Pages in PDF File: 36

Keywords: contracts, software license agreements, end-user license agreements, digital rights management, iPod, iTunes

JEL Classification: K00, K10, K12, K20, K21, L41

Accepted Paper Series