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Blockchain-based digital rights management systems: Design principles for the music industry

Author

Listed:
  • Raffaele Fabio Ciriello

    (The University of Sydney Business School)

  • Alexandra Cecilie Gjøl Torbensen

    (IT University of Copenhagen)

  • Magnus Rotvit Perlt Hansen

    (Roskilde University)

  • Christoph Müller-Bloch

    (ESSEC Business School)

Abstract

Initially designed to protect intellectual property (IP) of digitalized information goods such as music, games, or books, existing centralized digital rights management (DRM) systems mostly serve the interests of major publishers, with scant inclusion of rights owners, creators, and consumers. Although various blockchain-based DRM systems have been proposed, most of them mirror existing counterproductive IP restrictions. Analyzing the music industry as a case in point, this paper proposes design principles for blockchain-based DRM systems that provide an integrated and flexible solution by enabling transparent music licensing structures, consistent and complete rights metadata, and efficient and transparent royalty payout. The solution can be achieved by storing rights metadata on a public distributed ledger, by validating metadata through a consensus mechanism on a permissioned blockchain, and by algorithmically enforcing royalty payout via stablecoin through a smart contract. The design principles were evaluated by industry experts, validating their benefit for the music industry by increasing surplus value that is currently destroyed through previous suboptimal designs.

Suggested Citation

  • Raffaele Fabio Ciriello & Alexandra Cecilie Gjøl Torbensen & Magnus Rotvit Perlt Hansen & Christoph Müller-Bloch, 2023. "Blockchain-based digital rights management systems: Design principles for the music industry," Electronic Markets, Springer;IIM University of St. Gallen, vol. 33(1), pages 1-21, December.
    • Handle: RePEc:spr:elmark:v:33:y:2023:i:1:d:10.1007_s12525-023-00628-5
    DOI: 10.1007/s12525-023-00628-5
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    References listed on IDEAS

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    More about this item

    Keywords

    Digital rights management; Music industry; Decentralization; Blockchain; Design principles; Scenario-based design; Design science research;
    All these keywords.

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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