Feeds

With a blanket license, will CDs get cheaper?

Or dearer. Or disappear?

Internet Security Threat Report 2014

So last year's " Future of Music™", the DRM-encumbered digital downloads model pioneered by Apple, has stalled. What now?

After reading our take on it, Sava Zxivanovich has a very good question.

"Does blanket licensing mean that CDs and DVDs will be cheaper? We buy them a lot."

A blanket license for digital music, now being considered by labels (big and small), songwriters and performers, gives you the right to exchange music freely over computer networks - for a small fee. The pool of money is then divided up according to the exchanges, and returned to rights holders. The model operates today in many situations where it's too onerous to count, let alone restrict the exchanges taking place: such as for radio, and music played in pubs and shopping malls, for example.

When it's introduced, it will result in some pretty dramatic transformations, as you'll be able to walk past a cafe or store and "collect" the music on your phone, and carry on using P2P networks legally - without the nuisance of DRM or threat of RIAA stormtroopers.

It won't, however, mean you can embark on a trolley dash through the nearest Virgin Records megastore. But with such an abundance of music available on tap digitally, who'd even want to go near one? From what we know, how can we predict a future for physical product - what it will look like, and what it will cost?

Speaking to us recently, blanket license advocate Peter Jenner suggested that CDs will go up in price as a consequence of a P2P flat fee. The thinking is that most people will get most of the musical satisfaction via a phone or their PC (some other form of "broadband" service, such as interactive cable, recordable radio, or IPTV) - leaving physical "things" as a market niche. As the mass market for CDs dries up, so the logic goes, producing CDs becomes more expensive - increasing the cost, and therefore the price.

That's certainly one way of looking at it. But one observation we can make about the last decade is how actually resilient CD sales have been. First let's tackle the scale of physical and digital music.

The IFPI pegs the size of the global music market at $33.6bn last year, down from $40.6bn in 1999. But the biggest fall took place between 2002 and 2003, when the USA, Japan and the Eurozone were enduring stagnant economies. Overall, that's 17.6 per cent down.

Legal digital downloads will gross around $500m this year in the US. But "illegal" digital downloads, according to Big Champagne, which analyses P2P exchanges, exceed DRM downloads by a factor of 10:1.

Now not every P2P download is a foregone purchase. Many are acts of "exploration", as Jenner described it recently. But the industry extrapolates that if every P2P exchange was monetized, it would be where we left it in 1999, before the growth of broadband and 3G.

We caution against making that calculation, and add an obvious caveat. If the big four labels had set the agenda by introducing a blanket license a decade ago, rather than being dragged to the table because all other options have been exhausted, they might be in a rather better position than they are now to exploit digital exchanges. In other words, they've incurred opportunity costs over and above what they claim to have lost through P2P. This is a side note, but it's worth remembering in the months ahead.

Beginner's guide to SSL certificates

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
DOUBLE BONK: Testy fanbois catch Apple Pay picking pockets
Users wail as tapcash transactions are duplicated
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
In the next four weeks, 100 people will decide the future of the web
While America tucks into Thanksgiving turkey, the world will be taking over the net
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
New hybrid storage solutions
Tackling data challenges through emerging hybrid storage solutions that enable optimum database performance whilst managing costs and increasingly large data stores.