To today’s consumers, convenience is king. That’s about the only conclusion I can take from a recent post on the blog Copyright and Technology interpreting recent RIAA statistics to demonstrate that, where music is concerned, “DRM is back.”
It wasn’t so very long ago, in 2009, that iTunes announced it would stop putting DRM on music (and the labels had already been permitting Amazon to sell music DRM-free to try to compete with Apple). Since then, commercial digital music downloads have been DRM-free.
But at the same time, streaming music services promising the long-sought-after “celestial jukebox” were getting started. Since these services provide you the right to listen to music but not “own” it, they still use DRM. According to those recent RIAA statistics, in 2016 revenues from such DRM-using streaming services surpassed those from DRM-free digital downloads.
Not that this should come as a great surprise. As I said a couple of years ago, the idea of renting the library has become a lot more attractive than owning the media. Thanks to my Google Play Music account, if I should want to listen to the latest concert album by Yes to see how their new lead singer Jon Davison sounds, I no longer need to go out and buy it, or even order it from Amazon. All I have to do is punch “Like It Is” into Google Play Music, and a few seconds later I’m listening. And it would seem I’m not the only one who feels this way.
I’ve long held that the average person doesn’t care about DRM as long as it doesn’t get in the way of doing what he or she wants to do. Average people happily buy ebooks from Amazon despite their restrictive DRM because they don’t need to do anything Amazon’s DRM blocks off—and Amazon makes the purchase process so dead simple. It would seem that music is the same way, and this is a trend that’s only going to continue.
Are all-you-can-read ebook services like Kindle Unlimited or Scribd ever going to go the same way? It seems unlikely. Music services are able to offer nearly any artist, album, or song that consumers could want to hear, and the differences in selection from one service to another are generally very small. However, ebook services can only cover small fractions of their individual markets.
The reason comes down to a key difference between music and book copyright called compulsory licensing. Under compulsory licensing, it is very easy for music services to license music from rights holders. As long as the service is willing to pay a reasonable licensing fee, the rights holder is compelled to license them the music. However, there is no such licensing in place for books, and publishers are free to withhold their books from these services. So no ebook service is going to be able to offer the kind of broad-ranging selection that is exactly what makes the music services so compelling.
Hence, for now, most DRM-bearing and DRM-free individual ebook sales seem unlikely to be threatened by the rise of Kindle Unlimited. But music consumers have demonstrated that they don’t really care about DRM as long as they can listen to the music they want to hear when they want to hear it.
teleread.org 
Thanks for the hat-tip, Chris. However, your point about compulsory licensing is not correct.
The licensing of music rights is a dizzyingly complicated “sausage factory” with many components. Some uses of music fall under compulsory (a/k/a statutory) licenses, while others do not. Most relevantly, the “celestial jukebox” (interactive a/k/a on-demand streaming) services like Spotify, Google Play Music, and Apple Music do *not* have statutory licenses to offer whatever music they want on demand. (YouTube and SoundCloud are special cases which I won’t go into here.)
Those services must negotiate licenses for every piece of recorded music they offer. Artists and labels can and do refuse to grant those licenses–although holdouts are rare nowadays because, as the industry has learned (and as my article points out), on-demand streaming is where the action is in music today and holding your music back from it is usually a self-inflicted wound.
Compulsory licenses exist for different types of uses, such as radio (the AM/FM kind as well as services like Pandora, iHeartRadio, and Sirius XM satellite radio). There is also a “mechanical phonorecord” compulsory license for copying and distributing musical works, but that only covers the musical composition underlying a recording, not the recording itself. They are two separate copyrights and must *both* be licensed by someone like Spotify or Google Play.
My view on why the book publishing industry hasn’t produced a successful Spotify or Google Play Music equivalent is that it has to do with who owns the copyrights. In music, in the vast majority of cases record labels own the sound recording copyrights and therefore can negotiate whatever license terms they want (including none at all). The few exceptions are the Taylor Swifts and Adeles of the world who were able to negotiate “owning the master” with their record labels, and some indie artists who have opted out of record labels and self-distribute their music.
This is not the case in trade book publishing, where (again, in the majority of cases) publishers do not own the copyrights, but authors do. Publishers only have the right to license authors’ material in ways that their author contracts allow. The problem–as Simon & Schuster CEO Caolyn Reidy pointed out recently–is that in most cases the publisher has to pay the author a full purchase royalty whenever someone reads even a few pages of an e-book. In a subscription service like Scribd or the former Oyster, that’s a completely unsustainable model. Making it work would require the Herculean task of renegotiating thousands of author contracts.
(If you want a more detailed explanation of the music copyright sausage factory, I’ll refer you to the first few pages of the whitepaper I just published; see https://copyrightandtechnology.com/2017/04/04/new-white-paper-watermarking-technology-and-blockchains-in-the-music-industry/. In turn, the whitepaper refers to a much more exhaustive explanation in a recent Copyright Office report which is well worth reading if you want to take a really deep dive.)
As to your greater point about “convenience is king,” I agree.
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I thank Chris and Bill for their thoughtful words. Good to see Bill supplying us with all the nuances on licensing.
As I personally see it, DRM remains a major issue. I want to own ebooks for real and be able to read ebooks with an app or gadget of my choice. Moon+ Reader Pro is so, so far ahead of Amazon software, to give one example. One big issue is that Amazon controls so much of the ebook market, at least here in the States, that most nontechnical people are ignorant of alternatives.
Yes, we’re talking about both convenience and the value of books as a medium with gotchas vs. no gotchas.
Methinks different people will consider the value of ownership in different ways. I care little about owning music in this era of streaming, but I care a lot about owning my books. Others’ sentiments may differ. But I at least want full ownership as an option for both books and music.
David
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Another variable that needs to be considered is the degree to which consumers of digital goods might want to revisit what they rented and whether a given item will be there when they want to revisit.
Although most music, video and trade books quickly loose almost all their value, there are a few of these titles that people will want to revisit. Will it be there 10-20 years hence?
This is especially the case with music. I can recall friends going to great lengths to resurrect cassette tapes in order to revisit a single song or a mix that carried great personal meaning for them. OOwning the media, even decrepit magnetic tape, is critical when there are no other options.
Will that cloud be there for you when you are but one of four people world-wide wanting to re-experience something from the dim past? We probably won’t know whether this will become a notable issue for some time after it is too late for nostalgia support.
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