The free-rider concept occurs when a person enjoys the benefits of a good or ser

Question

The free-rider concept occurs when a person enjoys the benefits of a good or service without paying for it. Music files are nonrival and effectively nonexcludable, thus creating a free-rider problem. The courts address this problem by enforcing copyright laws restricting the legal right to copy music files, although the cost of enforcing these property rights is high. Another solution to this problem may be to place a tax on MP3 players and distribute the revenues to performers and recording companies, but this approach doesn’t provide an incentive to limit illegal file sharing. Post your discussion regarding the best solutions to resolve this problem.

Do you concur that the best solution is for the courts to enforce property rights, and for the recording companies to pursue illegal music file sharers by suing for large penalties? Or would you rather see a tax placed on MP3 players where the tax revenues may be distributed to the music performers and recording companies?

Or do you have a proposal of your own which addresses this problem?

Explanation / Answer

Property rights are expensive to impose, to maintain and to monitor. Again, the taxation approach does not impose a limit to illegal sharing (the Piracy problem).

In my opinion the problem can be mitigated by encoding a licence key with each online music file. Without the license key (a password code), the file cannot be opened and used. This will exclude illegal copying and sharing while protecting the property rights of the files.

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