Week Six

Lecture: Disruption in the Music Industry

1. The economics of music - Presentation on economics of media in general: http://www.bubblegeneration.com/resources/mediaeconomics.ppt
2. Concepts to know:
1. DRM: http://en.wikipedia.org/wiki/Digital_Rights_Management
2. DMCA: http://en.wikipedia.org/wiki/Digital_Millennium_Copyright_Act
3. P2P: http://en.wikipedia.org/wiki/Peer-to-peer
4. Napster: http://en.wikipedia.org/wiki/Napster

Synopsis of how (economically) filesharing came about: (Tim O'Reilly writing on the two Bubblegeneration readings in your list)

"The fundamental argument is this: that an important part of what people pay music companies for is to act as an agent, finding good music (which can be reframed as mitigating the risk of buying bad music). But the music companies have (at least in part) betrayed that implicit contract, by placing other values, such as the economics of scale, ahead of what consumers are paying them for. In economics terms, this is called a moral hazard, since the agent can impose hidden costs instead of the costs that the consumer is actually paying for. File sharing allows users to share the risk of finding good music among themselves rather than transferring it to an agent. But it imposes a second moral hazard on users, since it tempts them to no longer keep their implicit contract to pay for the music."

Go here for this week's reading list

Assignment

Write two (2) blog posts:

- One about your own personal experience, or that of your peer group, with digital music.

- One comment about any of the readers or another blog post you find about digital music.

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