Alternative Compensation Systems
Alternative Compensation Systems to compensate for and legalize infringing online practices.

Internet users can download copyrighted music, movies, series and books relatively easy and for free. Protection of copyrighted material is easy to work around in practice and enforcing copyrights is costly and complex. A possible solution for this problem is to legalize downloading and streaming of creative material through a payment system in which (1) internet users pay a monthly subscription, (2) paying customers receive legitimate access to creative material, (3) the collective payments are distributed among authors, artists and other copyright holders. In conjunction with the IvIR (Institute for Information Law), CentERdata studied how the specific design of such a payment system would influence its acceptance.

Research Framework

The acceptance of various payment systems was studied through a choice-based conjoint experiment. For this study among approximately 5000 members of the LISS panel, two payment systems were presented with various features and prices. The respondents were asked to choose between the two systems, but could also respond by not accepting either system. The respondents’ choices were analyzed according to a conditional logit model. Based on the analysis, the “willingness-to-pay” for specific features of the payment system could be calculated. CentERdata advised primarily on the design of the conjoint experiment and the statistical analysis of the data.

This project was funded by a NWO-TOP subsidy (awarded to IvIR) and the MESS project.

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