Does It Matter If Apple Supports File Sharing?

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Apple recently patented a system that would enable users to legally share music, video, and image files directly with each another without having to illegally pirate digital content. But the patent, first filed in 2011 and awarded earlier in January, raises the question of whether it actually matters if Apple supports file sharing, especially when it comes to digital music, an area where first pirating and then streaming have hurt download rates.

Patent No. 8,934,624, for “Decoupling rights in a digital content unit from download,” describes a system that would enable users to obtain rights to a legitimate copy of digital content without downloading it from the digital content store where it’s offered. Instead, one user could obtain an encrypted copy of the content and use it to generate a legitimate second copy to a second user. The original file would be encrypted with a key associated with the first user, and the copy is encrypted with a different key associated with the second user.

The patent explains that while copyright laws protect digital content, they don’t prevent the unauthorized distribution of content. Content protection technologies use technical and legal mechanisms to protect content against unauthorized use, but Apple said that in addition to enhancing these technologies, “it would also be desirable to provide users having access to already legitimately-obtained copies of digital content units a legal right to play, view, or manipulate those copies.”

Apple’s invention is a system that would grant users the legal right to own a copy of a piece of digital content without having to download another copy of the content from a digital content store. It would decouple the purchase of the rights to a copy of a piece of digital content from the downloading of the digital content. This would not only save users download time but could also deter users from producing illegal copies of digital content.

IPhone, iPad, or Mac users could share music files with each other — likely through AirDrop or a similar system, according to ZDNet — once they’ve purchased the proper license to the file. If one user purchases a song on iTunes and shares the file with another user, the second user could go to iTunes to purchase the legal rights to access the copy and decrypt his copy — even though the song was encrypted with a key associated with the first user — all without needing to download the song himself. The patent explains:

This reduction in operating expenses may facilitate a two-tier pricing structure. For example, the digital content store 115 may charge a first price to users who download a digital content unit from the store and a second price to users who authorize a digital content unit without downloading the unit. Thus, to continue the example, some portion of the cost savings to the digital content store 115 may be passed along to a user authorizing a copy unit.

As a more specific example, the digital content store 115 may charge $1 for a user to download an authorized copy of a digital content unit. The same store 115 may charge 50 cents to authorize a copy unit without downloading the entire digital content unit from the store. This may encourage users to trade or copy digital content units as well as authorize these copies. Such sharing may, in turn, reduce piracy or illegal copying since the opportunity cost of having one or more rights in an authorized copy of the digital content unit may be reduced.

Would people use Apple’s file sharing system for music? 

It’s unclear if Apple will actually introduce the technology in its products, but as TorrentFreak points out, the system would introduce a new layer of content protection that would enable the files to be played only on “trusted client software.” Transferring files between devices would only be possible if these devices support Apple’s licensing system — which would actually represent a step backwards for consumers from the DRM-free music sold in most stores. If Apple introduces a file sharing system, will people really use it?

According to a recent report from Nielsen, 93% of the U.S. population listens to music, with the average consumer listening to more than 25 hours each week. Seventy-five percent of Americans say they actively choose to listen to music, more than the 73% who report actively choosing to watch TV, and many of those listeners stream music from one of the many popular streaming platforms available on mobile and desktop.

Americans streamed 164 billion on-demand tracks across audio and video platforms in 2014, up from 106 billion in 2013. The pace of weekly streaming rose to new heights, and the week ended November 9 marked the first time that total streams for a single week surpassed 4 billion. Of those, 3.9 billion were on-demand audio and video streams (1.845 billion audio and 2.05 billion video). Nielsen adds that in any given week, 67% of music fans in the U.S. tap into the growing pipeline of streaming music.

Source: Nielsen.com

Listeners stream instead of download, even when new releases or favorite artists aren’t available

In an era when more users stream music than download it from iTunes or similar stores, it’s unclear whether it would matter to consumers whether Apple officially sanctions file sharing. Though digital stores like iTunes make songs and albums available when they’re first released, many music consumers prefer streaming services like Spotify, Rdio, Deezer, or Rhapsody even when it comes to new music, which isn’t always available on streaming platforms right away.

Listeners expect newly released music to appear on a streaming site within two weeks, and teens have the lowest tolerance for long waits, with 60% expecting newly released music to be available within a week. They’re the least likely to buy music that they can’t stream, and opt to either find something else to listen to, wait for it to become available to stream, or turn to free alternatives. Adults ages 18 to 34 will purchase a song or two, but are less likely to buy the full album than the average music listener. Adults ages 35 to 44 are the most likely to buy music that they can stream, with 19% reporting that they would buy the complete album.

Nielsen investigated what users do when they can’t find their favorite artists’ music on a streaming platform and found that the answer is dependent on the kind of music consumer in question and his or her spending preferences. Those who spend the most money on digital music are, unsurprisingly, the most likely to purchase music that’s unavailable to stream. Additionally, those who pay for streaming services are more likely to buy the album (14%) than “free-streamers” (6%), who are more likely to find a way to get the music for free elsewhere.

Overall, fans who are willing to purchase music that’s missing from streaming services are more likely to buy just one or two songs from the album, rather than the entire track list. With music listeners overall favoring streaming over downloading, downloads are likely to continue falling as streaming gains momentum.

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