A digital asset is a digital entity owned by an individual or company. Examples include digital photos, videos, and songs. These assets are not tangible, meaning they have no physical presence. Instead, they are files that reside on storage device, such as a local computer or a cloud-based storage network.

The term “digital asset” ascribes legal ownership and value to a digital file. For example, if you pay $1.29 to download a song from iTunes, it becomes a digital asset since you own the song. Any stock photos you purchase are digital assets since you own the usage rights. When you buy a software application, it becomes a digital asset since you own a license to use the software.

“Digital asset” is also important in regards to copyright law. While you own a song or video that you purchase online, the publisher or artist still owns the copyright to the content. This means you cannot copy, distribute, or sell the digital content. Similarly, you own the copyright to photos that you take with your digital camera or smartphone.

Digital Assets and the DMCA

Unlike tangible assets, digital assets are easy to copy and share. Therefore, it is essential to assign legal rights to digital data. The United States government passed the Digital Millennium Copyright Act (DMCA) in 1998, which help protects digital data and intellectual property. It criminalizes the unauthorized dissemination of copyrighted digital content. It also requires individuals and companies to stop publishing or sharing digital data once they have been informed of a copyright infringement. This law has helped protect digital media and unique content on the web.

NOTE: Since digital data is saved in a binary format, digital assets are simply ones and zeros saved to a storage device. This may seem trivial, but millions or billions of ones and zeros can be used to store all types of digital content, including source code, documents, images, videos, webpages, and applications. These are all digital assets, which are legally protected by U.S. and international copyright law.