This week Bruce Willis allegedly made some interesting statements about his iTunes library. He’s unhappy that when he dies, he can’t pass the library onto his daughters the way you would a record collection. There were some initial reports that he was suing, but those are evidently untrue. Some reports indicate that the whole story was overblown. Still, whatever the provenance of the story, it gives us a good opportunity to take a hard look at what exactly you’re buying from iTunes and whether it matches up with what you think you’ve bought and what the record companies want to say they sold you.
Since digital files started gaining prominence, there’s been some debate over what purchasing a digital file gets you. The easy answer is a copy of the song to play on your compatible devices. But if iTunes purchases aren’t files you can pass from person to person freely, as Mr.Willis wants to, then what has been purchased seems less like a file and more like a license to play that song. You purchase it in your name or for a friend, and it grants you the right to play the song in accordance with the terms and conditions on authorized devices. Ok, but that’s not what people think they bought and it’s sure as shit not what the record company wants to sell you.
Interestingly enough this issue has been tried in court. Last year a suit brought by Eminem ended with a court stating that digital music should be treated as a license in that case. The judgement officially only applied to Eminem’s contract and Universal insists that there is no legal precedent here regarding any other contracts, but that’s not surprising given that it’s in their best interest to keep people from really questioning this decision. If what you buy when you buy an Eminem song on iTunes is a license, why should it be any different when you buy a song by anyone else? But really, the big question here is why does it matter?
Because aside from giving consumers a better understanding of what they’re buying from iTunes (or Amazon, or any other digital download retailer) it comes down to money. Album or single sales are paid out at a rate of 9-12% to the artist whether physical or digital. Money earned through licensing songs is split 50/50 between the artist and the label.
From a legal perspective digital downloads from iTunes or other similar retailers look a lot more like licenses than they do like a true purchased recording. In the first place, no one ever had to confirm they read a “Terms and Conditions” statement before they bought a record. With iTunes you get a certain number of “authorized devices” that you can synch with your account, and when you’re done with it you can’t sell it back to a used mp3 store where it can languish in a digital bin with everyone else’s old 98 Degrees albums. The fact that one high court has ruled that what we call digital downloads can and/or should be treated as licenses in some circumstances means that this is something that more artists should challenge because seeing a 40% increase in your royalties is not a small matter.
At the end of the day it likely doesn’t matter to iTunes one way or another. They get their 30% off the top and most people haven’t bothered to make too much fuss about the fact that their music comes with many strings attached. Most people probably never notice. The record companies will fight it, but they don’t really have much ground to stand on as long as digital files purchased through iTunes or other retailers still have so much legal language attached to them. The specter of Napster still looms large over the music industry, and the price of selling digital files with a full litany of restrictions spelled out for the consumer might be worth the extra royalties. Of course, if the courts do firmly come down on the side of these purchases being a license it’s likely that new contracts will just be rewritten and the artist won’t get that full 50% cut anyway. Or record companies will compensate by spending more on the artists up front so that those 50% royalties never have to be paid out because the artist’s account stays virtually permanently in the red. But that’s another column.
As a side note, if you are interested in leaving your children, friends, pets, whatever, a large library of carefully curated music at the end of your life I would recommend purchasing physical and having a dedicated hard drive that you copy the music to in AIFF, WAV, or FLAC files. MP3 and AAC files take a lot of audio information out of songs, so they’re of a lower quality* which is why they’re small enough to easily send back and forth online.
* And not worthy of expensive headphones.
Genevieve Burgess can seriously talk about this kind of stuff all day.