Correspondence: Pierre Hadaya, Département de management et technologie, Université du Québec à Montréal, École des Sciences de la Gestion, P.O. Box 8888, Downtown Station, Montreal, Quebec, Canada H3C 3P8. Tel: +1 514 987 3000 ext. 3850; Fax: +1-514-987-0360; E-mail: hadaya.pierre@uqam.ca web page: www.professeurs.uqam.ca/pages/hadaya.pierre.htm

¹is a professor in the Department of Management and Technology at the École des Sciences de la Gestion de l'Université du Québec à Montréal. He holds a PhD in Management of Technology from the École Polytechnique de Montréal. His main research interests lie at the intersection of information technology management, business strategy and interorganizational design.

²holds a Master's degree from the Université de Sherbrooke in Electronic Commerce Management. His research interests relate to electronic commerce and software distribution.

Abstract

The digital nature of software products combined with the advent of the internet has allowed for the proliferation of a new software delivery option: the digital distribution of software. Unfortunately, the diffusion of this new software delivery option has also facilitated copyright infringement and the distribution of pirated content. In response to these threats, software publishers have started applying various copy protection solutions to trial versions to make it more difficult for nonlicense holders to gain full access to products beyond their evaluation periods. In an escalating effort, some software publishers are now using digital rights management (DRM) technologies (among the various other distribution options they provide to their customers) when distributing software products online. By casting the software distribution channel choice as a transaction cost analysis (TCA) problem, this research proposes a theoretical model to uncover the reasons why, when purchasing a software license for a product that is marketed using a "try-before-you-buy" strategy, consumers would select the physical distribution channel not tied to any DRM technologies (ie, CD-ROM) rather than the digital distribution channel that uses DRM technologies (ie, electronic software distribution through demo-unlock).