Download this Paper Open PDF in Browser

The Analog Hole and the Price of Music: An Empirical Study

15 Pages Posted: 13 Mar 2007  

Douglas Sicker

Carnegie Mellon University; University of Colorado at Boulder - Department of Computer Science

Paul Ohm

Georgetown University Law Center

Shannon Gunaji

University of Colorado at Boulder

Abstract

We present the results of a series of surveys of college-aged consumers of music exploring their willingness to pay for digital downloads of music and measuring the impact of the so-called analog hole. The analog hole refers to a perhaps - unavoidable vulnerability of most digital rights management systems. In short, because people cannot consume digital information directly, every device that performs digital content must convert the digital information into an analog signal, which is very difficult to keep from being copied.

Although the analog hole has been widely decried by content providers, surprisingly little is known about fundamental aspects of how it operates. Can average users exploit the analog hole, or is this limited to sophisticated users? Does analog hole copying significantly degrade the quality of music or video? Will people pay for music that isn't a perfect digital copy? Intuitions and guesses abound, but nobody has ever conducted a study to answer these questions. We have. Although our surveys' sample sizes were too small to come to statistically significant conclusions, we did discover several interesting results including one tantalizingly specific result: What's the analog hole worth? Based on our survey, twenty-four cents. That's how much less our respondents were willing to pay for a music track when a perfect digital copy was replaced by an analog hole copy. Although our results need to be replicated on a larger scale, they suggest many conclusions that have never before been proved: people are willing to pay for less-than-perfect analog hole copies of songs; people will pay much more than half the price of a typically-priced digital music file for its degraded alternative; and even self-avowed "pirates" show a willingness to pay for digital music, albeit at prices well below today's market standard of ninety-nine cents a song.

Keywords: analog hole, DRM, copyright, empirical

Suggested Citation

Sicker, Douglas and Ohm, Paul and Gunaji, Shannon, The Analog Hole and the Price of Music: An Empirical Study. Journal on Telecommunications and High Technology Law, Vol. 5, 2007. Available at SSRN: https://ssrn.com/abstract=969998

Douglas Sicker

Carnegie Mellon University ( email )

Pittsburgh, PA 15213-3890
United States

University of Colorado at Boulder - Department of Computer Science ( email )

Boulder, CO
United States

Paul Ohm (Contact Author)

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States
202-662-9685 (Phone)

Shannon Gunaji

University of Colorado at Boulder

1070 Edinboro Drive
Boulder, CO 80309
United States

Paper statistics

Downloads
488
Rank
46,915
Abstract Views
4,395