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What Do Customers Think They’re Getting When They Buy Media Online?

DEEPLINKS BLOG
May 13, 2016

Until recently, it was uncontroversial that you could take books or music from your collection, and lend them, sell them, or give them away.

Rightsholders, however, have long tried creative ways to restrict your ability to do these things, as they believe it would let them make more money by either charging you for the privilege or simply by reducing “competition” from the sale or lending of used media.

Of course, making media less valuable for the purchaser would also hurt sales of that same media, but only if the reduction in value is apparent to purchasers. A seller could both maintain high prices and strip away the ability to resell or lend books if enough purchasers don’t notice at the time of sale that they’re getting less for their money.

Enter the “Buy Now” button. A team of researchers from UC Berkeley and Case Western have published a study showing that customers think they are getting traditional ownership rights when they buy digital media online, even when a vendor’s site includes legal terms (often buried in click-wrap agreements) purporting to limit those rights.

In the study, customers purchased digital media from a fictional website with either a “Buy Now” button, a “License Now” button, or a purchase button accompanied by a plainly-written, point-by-point account of the rights that would and would not be granted. The researchers also presented the “Buy Now” button for hardcopy media sales to measure purchasers’ baseline understanding of the rights they get when purchasing traditional media.

Customers clicking “Buy Now” overwhelmingly believed for that they would “own” both digital and hard copy media, and have the right to keep it indefinitely and use it on a device of their choice. Little did they realize that their digital copy could be taken away or simply be discontinued when a vendor went out of business or stopped supporting the product.

Most of the people who understood that they have the right to lend or gift their hard copies also believed they had those rights for digital works, though the numbers were diminished (and, sadly, many people weren’t confident in the rights they clearly do have to resell or lend hard copies of books and music).

When the button was changed to read “License Now,” customers’ expectations did not significantly change (they were less likely to say they "owned" the product, but just as likely to believe they had the rights that come with ownership). When, however, customers were presented with a plainly-written summary of the rights that were and were not granted, this did cause a corresponding change in people’s expectations. The paper reinforces the truism that no one reads fine print online terms, even in a research study. If vendors really wanted customers to understand what’s in their terms, they could easily craft informative summaries as the researchers did.

The researchers also confirmed that customers value and would be willing to pay more for the right to lend, the right to resell, and the right to use the media on a device of their choice.

Of course, a customer’s willingness to pay obviously depends on what they think they’re getting. If customers believe they are already getting space-shifting, lending, and resale rights when they are not, then prices are being artificially inflated and vendors are profiting from keeping customers ignorant.

The actual status of these rights is complex and the law is not yet settled. For example, while traditional protections like copyright’s “first sale” doctrine should allow you to resell your mp3s, Redigi was successfully sued for attempting to create an online marketplace to enable people to do just that. As another example, the fine print on websites is not necessarily effective at altering customers’ legal rights; contract and copyright doctrines interact to determine how enforceable such an agreement might be and whether it strips a purchaser of “ownership” rights.  

What is clear is that vendors are selling something far less valuable than what customers think they are buying. When a transaction objectively looks like a sale to a reasonable customer, the customer should get the legal rights that come with purchase, even if the vendor figuratively has their fingers crossed behind their back in the fine print.

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