New Study Shows Consumers Demand More Ownership of Digital Content

Jun 28, 2013

Article ImagePhysical books, movies, albums, and video games can easily be swapped and resold between different owners without fear of reprisal from the original publishers/copyright holders. So why can't the same be true of digital versions of these and other media? That's the question more consumers are asking, according to results of a recent WorldPay study titled the "Digital Generation Report."

In fact, over 50% of U.S. and U.K. consumers prefer to have the option to sell-on the digital content they buy, and 15% and 14%, respectively, believe they have the legal right to do so. Other notable findings among U.S. consumers who participated in the study include:

  • One third believe they can legally bequeath their digital goods to a relative or friend.
  • 16% believe they can part-exchange in return for new content.
  • The average digital consumer will purchase over his/her lifetime 95 music tracks, 32 movies, 14 TV shows, 19 e-books, 22 games, 25 software files, 15 apps, and 6 downloadable magazines/newspapers.

"The digital industry has exploded in the last five years, and there has been a shift from the physical to the digital across all types of content and services," says Karl MacGregor, VP Digital, eCommerce division at WorldPay. "When you consider that 43% of U.S. consumers think that digital products cost too much, it's easy to see why the appetite for (reselling, exchanging, and recycling) digital goods is high."

Jay Miletsky, CEO of Sequel Media Group, however, believes that it's unfair for consumers to feel entitled to being legally allowed to sell-on, exchange, or pass on digital content.

"Consumers are getting overly greedy when they expect something for nothing. People have to respect the business model of the publisher or rights holder, but they still don't want to have to pay for content," says Miletsky. "I can't, for example, go into a Barnes and Noble, buy a hardcover book and bring it back when I'm done in exchange for another book."

While Miletsky feels that if he buys something on his PC, he should then have the right to enjoy that same content on his iPhone, tablet, and other devices, "if it doesn't disappear off those devices then I don't think I should have the right to resell it to someone else. It's hard to imagine this scenario playing out where the publisher isn't getting ripped off."

Digital providers appear to be paying more attention to consumer demands for greater ownership of eContent, as evidenced by the recent announcement from Microsoft that users of the Xbox One will be able to trade-in, lend, resell, gift, and rent disc-based games like they do today-with little to no limitations on using/sharing games.

"Companies that sell only DRM-protected games destroy the entire aftermarket (reseller) ecosystem and anger many of the gamers who actively rely on it," Jonathan Weber, founder of digital media startup Marathon Studios, says. "This consumer pressure has led to video games being one of the first industries to pave the way for digital content that can be actively resold and traded just like physical media. Many other industries, like music and e-books, have yet to reach this stage."

Arguably, however, the e-book industry has been making greater strides in this space. Amazon Prime, for example, allows users to lend and borrow books for free. When it comes to the public lending of content for libraries, HarperCollins e-books expire after they've been checked out 26 times and Penguin e-books expire after a year.

"DRM and content restrictions are the major factors preventing customer adoption of many forms of digital content," says Weber. "Most customers are used to owning physical media and being able to resell or pass on their content as they please, and they expect to be able to do the same with their digital content purchases."

MacGregor agrees that digital content ownership rights will become an increasingly discussed topic as the industry evolves, and the industry currently faces a trade-off between those that own the content rights and the potential for future revenues if controls over ownership rights are relaxed.

While content publishers/providers can borrow lessons from the "freemium" model, in which consumers have access to basic content levels without paying, revenues over time could potentially be generated from consumers wishing to purchase more advanced/better quality content that comes with a price tag.

"Merchants, publishers and rights owners should work together to capture new audiences at lower price points by offering a model that facilitates the transfer of content-such as premium pricing, where certain types of content can be gifted or shared for an additional fee or recycled or exchanged for new content," says MacGregor.

(Image coutesy of Shutterstock.)