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What's copying your music really worth to you?

Quite a lot, it seems

Internet Security Threat Report 2014

How much would your iPhone be worth to you if the only music it could play had been bought on the device itself, from Apple? If your answer is "a lot less" or "not very much", then you're not alone. New empirical research has attempted to measure how much we value the ability to copy our music across formats and devices – and it's a significant sum.

Oliver & Ohlbaum Associates asked over 2,200 people about their music habits. Over a quarter use their digital music collections as a temporary cache for their CDs and most acquire less than 20 per cent of their digital music online. A conjoint analysis [PDF] then attempted to put a price on the perceived value of the functionality.

Many consumers wouldn't touch an MP3 player, even a basic one, if it couldn't play CDs. The value of playing your CDs ranges from £21 (44 per cent) of a basic MP3 player to £80 (32 per cent) of a top-end player costing around £250. For smartphones it ranges from £6.67 at the low end to £23.60. And CD shifting is worth £33.50 of a £499 fondleslab.

Almost three-quarters of respondents valued their digital music collections as the most important commercial data of any kind in their possession – ahead of games, books, TV and movies.

The research couldn't be more timely. By shifting your CDs into an online storage service like Apple's iCloud, or to a portable music player in the UK, you are technically committing copyright infringement. There's no longer any argument – if there ever was – about blowing away this anachronism. “We all agree there should be format-shifting and that the law is stupid," the Musicians Union chief John Smith said at Westminster recently. But the question is: how can this be changed?

Under EU law, member states can lift the anachronism by making an exemption for "format shifting", so long as some compensation (amount unspecified) is paid back to musicians – and most countries do this. Twenty-four member states offer compensation for implementing a format-shifting exemption; the UK is one of six hold-outs. And while the amounts are miniscule – 2 cents per capita in Romania for musicians, for example – they add up. The French composers' society sees 7 per cent of its revenue come from a levy.

Tech corps not on activists' radar

But this doesn't seem fair to everybody. Predictably, pirates and digital rights activists fume about "large corporations" making huge profits at the expense of individual artists and creators. But when they do, they rarely have an Apple or a Samsung in mind; prior to its recent dividend payout, Apple had amassed $100bn in cash reserves, and unlike Microsoft with its Zune player, hadn't voluntarily offered any compensation.

Pirates aren't alone, however. The UK's Intellectual Property Office (IPO) recently recommended that the exemption be lifted without compensation. It didn't attempt to quantify the economic harm, and (the IPO being the IPO) even offered some trademark surreal reasoning to support it. It argued that Britain could have invented the iPod – a view parroted by the anti-creative industry quango Consumer Focus.

The Oliver & Ohlbaum Associates research, commissioned by umbrella group UK Music, is a useful reality check – and quite a contrast to the "lobbynomics" the IPO produced to scupper No 10's Hargreaves Review.

It's worth remembering that there hasn't been a copyright dispute in history that hasn't been settled, at the end of the day, by a few pennies changing hands. So how much should it be, then. A pound a device? A fiver? ®

Bootnote

Microsoft's private Zune deal with Universal Music shows why, if we're going to have a levy, it should be an above-board one, not a back-room deal with a large record company. What are the odds that a dollar found its way into any artist's royalty statement?

Internet Security Threat Report 2014

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