Digital Media Distribution and Playback on Computers - An Overview

Intellectual Property, Copyright and Trademark, Networks, the Internet, and Cloud Computing, Internet and Media and Content

Article Snapshot

Author(s)

David S. Evans, Laura Gee and Albert L. Nichols

Source

LECG White Paper, September 2005

Summary

This paper looks at digital media player software like Apple’s iTunes.

Policy Relevance

Economic theory suggests that prices and industry structure will sometimes reduce competition, but real-world factors can make anti-competitive trends very weak in reality.

Main Points

  • Software “platforms” like Microsoft’s Windows are technological spaces serving many different users. A multi-sided platforms serves two (or more) groups of users.

 

  • Digital media players are multi-sided platforms bringing together consumers, producers of music, movies, and games, software developers, and hardware manufacturers.

 

  • Leading digital media players are produced by Apple (iPod and iTunes), RealNetworks, Microsoft, Sony, MusicMatch and Winamp.

 

  • User preferences and content sources vary widely, so the market has not converged on one standard. Users often own and use more than one player.

 

  • Players’ business strategies vary widely.
    • Apple sells hardware, software, and content, making money from the hardware.
    • RealNetworks seeks to make money from content subscriptions.
    • Microsoft is adding value to its operating system.
    • Most players give their source code to developers free.
    • None sells the media player, the software.

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