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Summary:

Though plastic sales may be waning, value may remain in ascribing physical characteristics to virtual content. But do “digital album signing” and “second-hand MP3s” add up to real innovation?

Two developments this weekend point to how competing interests are trying to increase the value of their intangible digital content by re-imagining it as though it were ye olde packaged goods…

Singer Ellie Goulding is holding “the world’s first digital album signing” to promote her latest release, Halcyon – the latest high-profile celebrity chat facilitated by Google’s increasingly media-savvy Google+ Hangout team.

That, of course, is an anachronism. A digital album can no more be “signed” than thin air be coloured green.

But album sales are plummeting, displaced by the success of digital track download stores. For artists who still attach importance to the album, could “signing” digital content draw fans to buy the whole digital collection, not just individual favoured tracks? That remains to be seen from Monday’s event, when meeting Goulding in a video chat will likely be the bigger draw. The takeaway is this – buyers value an experiential piece of the creator.

While Universal’s Polydor, to which Goulding is signed, re-images the virtual as physical, EMI is suing a retailer doing just the same.

Boston startup ReDigi lets customers list their used, legally-bought MP3s and, soon, ebooks for re-sale  to peers as “second-hand” files. But the record label has taken the outfit to court in New York and: “The company is demanding that the one-year-old start-up pay a $150,000 penalty charge for each song it has sold on” (via Telegraph).

The case may centre on the apparent reality many retailers do not sell customers actual digital content but merely license to use that content – licenses which often prohibit re-sale.

Second-hand retailers of CD-based music and games like Music Magpie are becoming popular. By launching a secondary market for second-hand digital content, ReDigi is attempting to profit from introducing characteristics of the pre-digital content ecosystem, when primary and secondary value could be easily ascribed to artefacts that boasted tangible presence in the real world.

But labels like EMI would have plenty to lose from ReDigi song fees that could be just five percent of originals’. Although diminished, the industry has been kept afloat thanks to digital track downloads that were still growing by nine percent annually last year.

There is a parallel precedent in a separate jurisdiction and a related industry. In July, the European Commission ruled that customers can re-sell and re-buy licenses to computer software, as long as those licenses are deactivated prior to re-sale.

Sites like UsedSoft and Green Man Gaming are already operating such marketplaces. In the music case, much could depend on how stringently ReDigi ensures second-hand songs can no longer be played by their original buyers.

  1. just because people won’t pay $0.99 for new music, doesn’t mean they are going to start paying for it at a discount.

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  2. Emmett McAuliffe Monday, October 8, 2012

    The problem with Redigi is that its method of “assuring” the record labels that the traded away disc has been removed by the trader, is a joke. The Digital Content Exchange, involving step one, immobilization, step two, registration and step three, verification… is the only way to do it. C: http://goo.gl/EVtqk

    If the record labels offered a real incentive to own, illegal downloading would decrease, based on simple user preference. The DCE, which gives you cloud access to all your music, films and books, gives you all the same rights to them that you had in the physical days .. and more. It is ownership, on steroids.

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  3. Perfect.

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  4. Labels are still trying to hold on to the 20th century, as if we’re somehow going back to “used digital file stores” or something. Face it: The genie is out of the bottle. A digital file is a clone. The only difference is price point. So why not just lower the “new file” price point and be done with it. We’re heading towards a tiered subscription model anyway, just like cable. So, we should all just get on with creating that and stop trying to go backwards and playing price games like the airlines.

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    1. Adrian Brigham Monday, October 15, 2012

      Love these kinds of comments. Ok, let’s put the money where the mouth is. We have a new recording project in the works. $40,000 production budget and $50,000 for marketing (that’s a very, very low figure BTW). Are you willing to put up the money for this since today’s standard record label deal is a P&D? C’mon David, you said this is the wave of the future!

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