Just when the music industry is getting to grips with making making in a digital world, digital disruption is hitting again. EMI/Capitol Records was back in court last week in its battle with startup ReDigi, a service that facilitates users to sell their digital tracks.
This time the music industry has the support of previous disruptors like Google and Apple, now the internet establishment.
ReDigi argues that just like physical music recordings that consumers have bought, digital tracks should have a value in the aftermarket and people should legally be able to trade them. EMI appears to believe the emergence of a second-hand market for legal digital music could harm the now robust first-hand sales. Google is concerned it could harm the fledging revenues of the cloud computing industry.
The ReDigi argument is compelling, and subconsciously one reason why I prefer to continue to buy CDs and transfer them to unlocked MP3 files. If I buy Digital Rights Protected music through Apple I am supplied with tracks that lock me into using iTunes and a limited number of registered devices.
While Apple’s iCloud service is convenient as it automatically stores tracks bought from iTunes, it does reinforce the question about where true ownership of the purchased music lies.
I buy in iTunes, I have to play it in iTunes, I have to use an iTunes registered device and it gets stored in Apple’s servers. It feels like Apple has retained ownership, and I have merely paid to access it on a limited basis.
Music streaming services like Spotify are much more transparent about where ownership lies, or rather where it doesn’t . A subscriber is merely paying for the right to play a track, they do not own it.
ReDigi is trying to facilitate a means by which I can transfer ownership of a track to somebody else, just like I might sell a CD I no longer want. That not only seems perfectly reasonable but it would make it clear that I own my music, not Apple.
Another interesting angle on this story is that it is the second or third wave of digital disruption to hit the music industry. Now the original disruptors are under threat of disruption.
The first wave was digital music files, notably those distributed illegally which eroded price and the number of people paying. After many years, the industry has eventually embraced legal digital music and the price per track on digital is now about the same as on CD.
The music streamers like Spotify have been the second wave, offering ‘all you can eat’ music for a flat monthly fee. The average revenue per track is likely to be much lower than digital purchases. The streamers are the greatest threat to the ‘established’ business model of distributors like Apple.
We now have the aftermarket, which should again challenge who can control the digital rights of each file and could push the price per track down again.