Used Digital Sales Can Totally Work (I Think)

Thanks to a set of recent patent filings from Apple and Amazon, reports are saying that the two companies are both looking at ways for consumers of their digital products to resell them to other users, in a sense, setting up “used” mp3 and ebook exchanges.
Many seem confused about how this would even work, as in, how can the company be sure that once I’ve sold a file to another user that I no longer keep a copy for myself? And then, how is there any reason thereafter for anyone to buy “new” digital media when there is literally no difference between the new and the used, and the used is presumably cheaper?

I have no idea about the second question.

But the first seems easy if we assume a cloud-centric model. The trick is that the selling company needs to be able to reach into your storage and erase files you’ve sold through them, ensuring this manufactured scarcity. It can’t be done with the current iTunes model, of course, because it would mean Apple sneaking into your personal hard drive and deleting data. Right, that’d go over well.

But if Apple moved to something more specifically cloud centric, and the user understood that while this file might be cached on their device, it really lived on Apple’s servers, Apple could simply revoke access to that file once it’s been sold.

And for Amazon, well, they already do this. Recall a couple years back when an illegitimate version of Nineteen Eighty-Four was zapped out of people’s Kindles? Amazon already operates with a model under which the purchase of an ebook is really just a license to access that file on a bunch of devices. And that’s whether Amazon’s customers understand that or not. So if Amazon were to open a used Kindle book exchange, they already have the mechanisms to ensure the integrity of the transaction, presuming these devices connect regularly to the Internet. (One could anyways go all Galactica on them, I suppose, and stay off the grid.)

Consumers really just need to understand that they’re actually licensing these files, not owning them like they’re physical objects. If that can sink in to a sufficient number of folks, then there’s a real and doable initiative here.

(And for that nut-cruncher second question, I dunno. Maybe first sales are of a higher bitrate for music, higher resolution for video, fewer “x-ray” type bells and whistles for ebooks? Man, I’d hate that.)

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8 thoughts on “Used Digital Sales Can Totally Work (I Think)

  1. The record industry will fight this tooth and nail. The reason is that royalties aren’t paid on the secondary market, only on the first transaction. I know for a fact this is how it works with used books.

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    • It should be noted that this is not intended as an endorsement of the idea or a prediction that it will pass muster with anyone involved in content creation or the labels/publishers/etc.

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  2. You know who else will be fighting this tooth and nail? We authors who rely on royalties to survive. Yes, we who don’t get a dime from the “used” files. Some of us are barely surviving. (I’ve been a novelist for 20 years and my income recently went down by .75 percent, leaving us financially strapped.)
    But hey, it’s just art. It should be shared freely, right?

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  3. If the files aren’t corrupted, then “used” digital files are no different than new. Or in the case of leased access to files (which is what a “kindle” actually does), it’s simply the transfer of access.
    But let me remind others of a little history: Ten years ago, record companies and the RIAA tried demanding royalties on the sales of second hand CDs, tapes and vinyl. They already got the money once when the records were sold as new, but they do not return the royalties to people who sold the used records. The companies want to be paid twice for a single product sold. I cannot see how those scumbags are going to act any different in this case.
    http://legacy.utsandiego.com/news/business/20020614-9999_1b14usedcds.html
    http://www.mp3newswire.net/stories/2002/UsedCD.html
    If I sell you an old CD, person to person, 100% of the money stays between us. But since licenses of digital items must go through the companies, consumers won’t have a choice about how to sell it. The sale will have to go through the licensor.
    People may be forced to sell at a price the company sets, not what the two people agree on. And in all likelihood said company will take a “cut” of the sale (vigorish is more like it, an outrageous percentage), both the seller (who gets less) and the buyer (who has to pay more) will get screwed over. It won’t shock me if Amazon and Apple try to rip off consumers so badly that selling digital licenses isn’t worthwhile – the seller might as well give up and the buyer get a new one from the company.
    This is yet another reason I refuse to buy anything with a “license”. All my music and ebooks are without the taint of DRM or other restrictive schemes.

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  4. There are obvious practical problems with this.
    It doesn’t matter if you store the data on the cloud; in order to be able to read it/listen to it/watch it/play it (delete as appropriate) it must be sent over the network in a form that can be understood locally. Encryption doesn’t help with the last hop as the application used to read/listen/watch/play must obviously know how to decrypt it (perhaps with a key supplied by the user).
    Once it has been sent over the network and decrypted, it can be saved in an unencrypted form. It isn’t necessarily trivial but it only has to be done once, and then the DRM (because that is what this is) free version will, if current trends are a guide, proliferate more widely that the DRM encumbered version will.
    A better idea would be to look at the basic problem. Why do people want to buy used digital things (assuming for the sake of argument that they do, of course)? Presumably “because the new ones are too expensive”. So, how about just reducing the price of eBooks/MP3s/MP4s/video games once they are, say, 12 months old or so? Then you can keep them DRM free, and not have to treat all your potential customers as criminals. It’s just a thought.

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    • Well the whole idea of “used” for digital downloads makes no sense. It’s data. There’s no “new” or “used”, only access. You either have it or you don’t.
      The wear and tear equivalent of data is if a file is corrupted I suppose, but then nobody would pay for that.
      This is basically re-monetization/re-selling.

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      • Eh… not quite.
        Let’s say you have a bunch of eBooks you aren’t going to ever re-read, or (more likely) a bunch of video games you’re not going to play anymore. They do take up space on a hard drive, and perhaps you’d like to put that space to better use; rather than simply deleting them, I can see someone being interested in selling them.
        Of course hard drive space is ridiculously cheap and getting cheaper, so the value of the space that they’re taking up is virtually worthless. But if, at some point in the future with super mega ultra high definition movies taking up 1 petabyte per minute while hard drive space hit physical limits such that it actually becomes expensive again, then there might be some sort of demand for this. But even then, I still think just reducing the price is a better solution all round – the lesser royalties artists would get on a new sale at reduced price would still be better than the zero royalties they get on a used sale.

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      • I’m not debating that someone might want to monetize their own digital data. But it’s not “new” or “used”. It’s just data.

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