In the current music landscape, that’s seeing physical music purchases decrease under the growing popularity for digital downloads and streaming, it is any wonder why consumers are becoming muddled over the ownership rights of their digital content? Particularly where services like Deezer and Spotify are on par with online stores like iTunes in popularity, the hazy ownership rights become even more blurred.
In a recent legal case, Capitol Records reasoned that they still owned the rights to digital purchases, shutting down ReDigi – billed as “the world’s first pre-owned digital marketplace” for allowing listeners to trade music tracks, labelling it a form of music piracy.
But a new report suggests that consumers are showing a greater demand for owning the rights to their digital music collections, as WhaTech reports.
WorldPay, a leading global provider of payment and risk services, have recently conducted a survey with 3,065 adults in the UK and USA, called the Digital Generation Report. Over half of the UK and US consumers surveyed would like to have the option of selling-on the digital content they have purchased, with 14% and 15% believing it is respectively their legal right to do so.
Under current legal parameters, unlike the tradition of buying records and CDs meaning a part ownership of the content, the convenience of purchasing music online comes at a different cost. As it turns out, to the dumb founding of many online music shoppers, those well-earned dollars are simply purchasing the rights to access that music, as opposed to owning the tracks themselves.
This sparks a range of legal issues that have not been confronted before, as the rapid increase in this technology occurred faster than the law could keep up with it. For instance, by sharing a track bought on iTunes with a friend or loved one, you are technically committing an act of piracy, as the music is not your legal property.
The consumers surveyed in WorldPay’s Digital Generation Report had all purchased digital music online in the last 12 months, with their responses compared to the music generation in 2007, showing some major distinctions in the drastic shift of music consumption in the digital age.
Phillip McGriskin, Chief Product Officer of WorldPay, comments that: “Since 2007 the consumption of digital content has changed dramatically, and the rise in device ownership enables all types of content and services to be available anytime, anywhere.”
He continues to note:
As consumers purchase more types of digital content they are increasingly demanding the options to recycle, share or part-exchange as they have become accustomed to with physical products. Confusion also exists around what consumers are legally allowed to do with the content they have purchased.”
“It therefore presents a need to clarify the boundaries of content ownership and possibly offer consumers the opportunity to purchase these rights. These evolving demands will shape the digital industry and the way content and services are consumed and purchased in the future.”
Findings from the survey show that a third of US consumers and one in four UK consumers believe they can legally pass on their digital goods to a friend or loved one, while 18% and 16% respectively believe they can part-exchange in return for new content.
In the US, the average digital consumer in their lifetime purchases 95 tracks of music, 32 films, 14 TV programmes, 19 eBooks, 22 games, 25 software files, 15 Apps and six downloadable magazines or newspaper issues. By comparison, in the UK the average digital consumer purchases 91 tracks of music, 6 films, 3 TV programmes, 15 eBooks, 9 games, 8 software files, 12 Apps and 2 downloadable magazines or newspaper issues.
Findings also highlighted the “cool cats” who tend to download particular genres in an effort to join the social trends, showing that 24% of US consumers and 17% of UK admit they buy certain digital products to make themselves look ‘cool’.
Subscription services such as Deezer and Spotify also get a look-in, with research showing that US consumers are more likely to use subscription-based services for digital content – 29% for films; 25% for TV programs – whereas in the UK the number of consumers using subscription services is lower. “As consumers purchase more types of digital content they are increasingly demanding the options to recycle, share or part-exchange as they have become accustomed to with physical products.” – Phillip McGriskin, WorldPay
Laptops were found to be the primary device used to make online purchases (32% in the US and 33% in the UK), closely followed by smartphones (27% and 25% respectively).
The frequency of consumers making music and app purchases was also recorded, with 10% of UK customers buying content at least once a week. In the US, 19% purchase music and 16% buy apps once a week or more often; this rises to 33% and 30% at least once a month.
It is perhaps fair to suggest that paying for the rights to listen to the music via these online stores or streaming services is a reasonable enough concept, if it weren’t for the high prices.
The research found that 43% of US consumers and 42% of UK think that digital products cost too much. With an album on iTunes costing the same as a physical CD copy in a record store, it is any wonder why consumers don’t go back to basics and purchase the physical versions, which they can then rip directly to their portable devices or music players.
Yet the gigantic increase in digital music content in the last six years has seen the popularity of buying records and CDs decrease dramatically, with physical sales of music dropping by over 70% between 2000 and 2009, and is set to drop the same amount between now and 2016, according to WorldPay’s stats.
If nine years can see a low blow of 70% less sales of the physical format, the prediction of a further 70% in three years could see the death of physical purchasing all together.
The rise of access models like music and video streaming, in conjunction with consumers being against the leasing model of digital purchases, could mean the death of the music download could also be imminent. It’s something that Deezer CEO Axel Dauchez predicted, saying that by the end of the year subscription based music streaming services will take over the traditional means of downloading music.
“We see the end of music downloads as coming this year,” he told press, forecasting his belief that a change in conceptual thinking about consuming and marketing music will fuel the demise of traditional downloading.
Legal battles have already begun to emerge from the fog of ownership rights, with the aforementioned American lawsuit seeing giant record company Capitol Records successfully sueing ReDigi as form of music piracy.
The second-hand trading website allowed listeners to trade music tracks at a fraction of the original cost of buying them on digital stores such as iTunes, but Capitol Records set a legal precedent by stating that such second market trading was an infringement on music copyright laws by making illegal reproductions of digital music.
The cloud of irresolute definitions of digital ownership is an ongoing issue, and as our opinion piece discussed the matter, it will be interesting to see what the next few years will hold for peoples’ digital music libraries.
