You Bought It, but You May Not Own It

A growing legal, legislative, and technological battle is reshaping the concept of property in the digital era. Major entertainment corporations increasingly argue that consumers do not actually own the digital media they buy.

In September 2024, California Governor Gavin Newsom signed Assembly Bill 2426. Starting in 2025, the law prohibits digital marketplaces—including video game storefronts, ebook retailers, and movie platforms—from using terms such as “buy,” “purchase,” or “own” unless they explicitly warn consumers that they are receiving a revocable license rather than outright ownership of the digital file.

The dispute became especially visible when tech giant Sony argued in court that players do not own the digital video games they purchase on its platforms. Traditional property law protections against arbitrary seizure do not apply to digital assets, leaving platform operators legally permitted to edit, alter, or permanently revoke content users have paid for.

Under the U.S. Copyright Act of 1976, the “First Sale Doctrine” protects buyers of physical goods, including printed books, vinyl records, and physical game cartridges. Physical owners can resell, donate, or lend their copies without permission from the copyright holder. Courts, however, have repeatedly ruled that the First Sale Doctrine does not extend to digital transfers, where users are bound by End User License Agreements (EULAs).

“When you ‘purchase’ a digital asset from a digital platform, the platform ultimately retains control of the asset, and your ‘ownership’ title is nothing but a revocable entry on the platform’s database,” said Primavera De Filippi, Director of Research at the French National Center for Scientific Research (CNRS) and CERSA.

That control has produced high-profile “digital purges” across media sectors over the past fifteen years. In 2009, Amazon remotely deleted purchased ebook copies of George Orwell’s Nineteen Eighty-Four and Animal Farm from users’ Kindle devices because of an administrative copyright dispute.

Publishers have continued to remotely edit existing digital books. Works by Roald Dahl, Agatha Christie, and R.L. Stine have been retroactively altered on digital platforms to update language or remove controversial content.

Streaming providers have also altered episodes of series such as Stranger Things to patch plot holes or adjust scenes after release. Other films and television titles have been entirely purged from streaming libraries to cut licensing costs or avoid politically sensitive topics.

In late 2023, Sony notified PlayStation users that it would delete more than 1,200 purchased Discovery television shows from their libraries because licensing agreements with Warner Bros. Discovery were expiring. A last-minute deal temporarily averted the deletion, but paid-for content could still have vanished.

In early 2024, French publisher Ubisoft decommissioned the servers for its online racing game The Crew and subsequently revoked licenses from players’ libraries, preventing them from running the game at all. The move sparked the international “Stop Killing Games” campaign, which lobbies governments to protect consumer access to purchased software.

Music has followed a different path. “Streaming music platforms have completely redefined music consumption by swapping ownership for unlimited access,” said Jess Zhang, founder of Canoe. She noted that the model has effectively eliminated a listener’s ability to build a permanent, personalized library.

Sammy Andrews, an music industry executive, said streaming services distribute royalties based on market share rather than direct support. The model, she explained, “rewards share of volume, not depth of connection.” Royalties remain identical whether a stream comes from a highly dedicated fan or a casual listener on a generic playlist.

Prominent filmmakers, including Christopher Nolan and Guillermo del Toro, have publicly urged audiences to keep purchasing physical media such as 4K Ultra HD Blu-ray discs. They want to preserve film history and ensure personal libraries cannot be altered or deleted by corporate decisions.

Other technologists argue that consumers should not return to physical discs. They instead favor restructuring digital networks to eliminate centralized intermediaries. “Blockchain and Web3 gives consumers a clear path to owning a digital copy of a specific good, whether that is a game, a song or a movie,” Zhang said.

Non-fungible tokens (NFTs) were initially presented as a tool for addressing the ownership dilemma. Tim Sun, Senior Researcher at HashKey, said NFTs enabled digital items to “have a public, verifiable record held directly by the user.” He also cautioned that speculative hype and market volatility during the peak of the NFT boom damaged public perception of the technology.

Many digital assets sold as NFTs do not store the underlying media file on the blockchain because of storage costs. “If the NFT points to a file hosted on a company’s server, the dependency on the platform operator persists,” De Filippi explained. She said true digital ownership requires both the ownership registry—the token—and the actual media content to be hosted on fully decentralized, permanent infrastructure.

Privacy and access control create another complication. Public blockchains expose transaction data and metadata, allowing anyone to view, download, or copy the media file linked to a standard NFT.

“The main issue is that ownership of the NFT does not necessarily give you exclusive control over the asset behind it,” said Guy Itzhaki, CEO of privacy blockchain Fhenix. “If an NFT represents a piece of art, a game item or access to private content, public metadata can expose that content or its attributes to everyone.”

To replicate the physical experience of ownership, Itzhaki said users need “ownership of the NFT and the ability to control who can see the data behind it.” Developers are addressing that problem with conventional encryption, Trusted Execution Environments (TEEs), and Fully Homomorphic Encryption (FHE).

FHE allows computations to be performed on encrypted data without decrypting it first. Smart contracts can therefore verify ownership and grant access to files without exposing the data publicly.

Encrypted NFTs were tested during the 2021 and 2022 market cycle. Filmmaker Quentin Tarantino auctioned encrypted NFTs containing scanned pages of his original handwritten screenplay for Pulp Fiction. The auction prompted a copyright lawsuit from studio Miramax that was later settled. Director Kevin Smith used the technology to distribute his horror anthology film Killroy Was Here through an NFT auction.

Despite those trials, encrypted NFTs have not achieved mainstream adoption. Itzhaki said the primary hurdle has been “integration rather than a lack of technology.”

The current Web3 ecosystem, including mainstream crypto wallets and marketplaces, was built around public metadata. Integrating encrypted NFTs requires managing private cryptographic keys, coordinating complex permission structures, transferring confidential data, and executing confidential computations across specific blockchains.

“That worked well to prove technical feasibility, but made it harder to reach the broader NFT ecosystem,” Itzhaki said. He expects privacy-focused tools adopted across decentralized finance and smart contract platforms to integrate into consumer-facing NFT markets and wallets, producing standardized templates for private digital assets.

De Filippi described the power retained by platforms in direct terms: “The platform operator can take property away via a simple line of code, without having to justify it on any legal ground, or even modify the content of these digital assets, without the users’ consent or knowledge.”

For proponents of decentralized technology, the remaining obstacles to digital ownership are no longer technical. “At this point, there are no missing technical elements,” Zhang said. “The missing element is culture and credibility for mainstream adoption.” She asserted that decentralized networks remain the most viable path forward for establishing clear, binding frameworks for digital intellectual property and consumer ownership on the internet.