Apple and Amazon Flirt With a Market For Used Digital Items

langelgjm writes "The New York Times reports that Apple and Amazon are attempting to patent methods of enabling the resale of digital items like e-books and MP3s. Establishing a large marketplace for people to buy and sell used digital items has the potential to benefit consumers enormously, but copyright holders aren't happy. Scott Turow, president of the Authors Guild, 'acknowledged it would be good for consumers — "until there were no more authors anymore."' But would the resale of digital items really be much different than the resale of physical items? Or is the problem that copyright holders just don't like resale?"

Comments

Resale?

[KermodeBear]

Or is the problem that copyright holders just don't like resale?

I don't think we need to look any further than this. Copyright holders have always hated the idea of resale of any kind; they think it loses them revenue.

Maybe they're right, maybe they're wrong, I don't have any hard data in front of me. I can say that if I buy something and it's mine, then I should be able to do whatever I please with it.

Re:Resale?

[PhotoJim]

They stand to lose more revenue than with physical products. Assuming the issues of DRM can be overcome, a used digital product works precisely the same as a new digital product. There is no discernable difference between the products when you use them. This is not true for physical goods like cameras, cars, houses, etc.

Re:Resale?

[ganjadude]

how do you figure they stand to lose more revenue? for one, no overhead (or much less) to host a few meg/gig file than to have a warehouse of 1 million books. Secondly the secondary market has not hurt book authors to the extent that we no longer have authors, why would this be any different? These copyrights holders want to sell you "the right to view/read/listen to X" but they dont want to allow you to own X. that is the key issue at hand.

Re:Resale?

[Hatta]

It's almost true for books. In 99% of the time, a book from a used book store or library functions identically to a brand new book. Maybe the spine has a crease, but that doesn't really affect your use of the book.

Authors have survived for centuries with people redistributing used books. They will survive for centuries more with people redistributing used ebooks.

Re:Resale?

[Nerdfest]

The part of this that's annoying to me is not the resale of digital goods part ... that should be assumed to be acceptable in the same way as any or goods are resold. The part I find annoying is that these weasels are patenting methods of doing it. I have a lot of trouble believing that anything they propose is original or not obvious.

Re:Resale?

[marcello_dl]

The simplest explanation is that Apple and Amazon are patenting the idea of dealing with used copies so that nobody can sell used stuff anymore.

The slightly more difficult explanation, if you don't consider copyright holder in the same boat as app store (a sale is a sale for both, most of the time) is that they want to use the used stuff card to cheat copyright holders on the real amount of digital stuff sold.

Other interpretations seem too far fetched :)

Re:Resale?

[bobbied]

Yes, but you cannot instantly create 10 copies of a book, sell them to be used in 10 different locations. A physical book is it's own "copy protection" in that you cannot simply hit a button, duplicate it, then transfer the copy to somebody else to use.

Re:Resale?

[ohnocitizen]

Probably because used digital goods are more appealing than non digital used goods. If I buy a used book, pages may be torn, it might have writing inside "this is for Dave, thanks for being Dave", or it might have coffee stains. A used digital book has none of these problems. This is going to impact the market significantly. Why buy a new copy for $10 when I can buy an identical copy for $3?

Unless of course they figure out a way to add the coffee stains digitally. THEN we're talking.

Re:Resale?

[athenaprime]

This. Seems hypocritical to me to say, "sure, anyone can resell any digital goods *that they own* but only as long as they use *my method* (implied "cut me a slice of every transaction) to do it."

What's to stop someone deciding to "resell" the "digital good" of "buying and selling owned digital items [on the internets]."

You can't maintain the copyright integrity on your creation, but I can maintain it on mine due to stupid patent laws?

Re:Resale?

[fuzzyfuzzyfungus]

It's almost true for books. In 99% of the time, a book from a used book store or library functions identically to a brand new book. Maybe the spine has a crease, but that doesn't really affect your use of the book.

Authors have survived for centuries with people redistributing used books. They will survive for centuries more with people redistributing used ebooks.

I suspect that, for books, what really scares them(at least the ones that are actually thinking, and not just bitching about anything that stands between them and their dream of getting paid per-eyeball-per-second for everything the've ever touched) would be an efficient secondary market.

Used books, barring serious abuse, retain condition well; but the market for them is physically segregated: New and used books are often sold through different channels(except textbooks, which usually hover right over their target population), in different stores, etc.

So long as that is the case, the impact is blunted. If, say, Amazon were able to add a checkbox to the Kindle that allowed a user to 'sell' a book for half what they bought it for(probably in Amazon credit rather than cash) and then Amazon seamlessly and immediately offered that 'copy' for sale to the very next person who went to buy a copy(and, since they wouldn't have to pay the publisher anything, they could presumably offer a modest discount off 'new' and still make a much greater margin), then the publisher could be up shit creek.

Re:Resale?

[PhotoJim]

Presumably there is a markup in their products and at the end, there is some sort of marginal profit. Otherwise there is no point in providing this electronic product.

If you can buy a product - let's say a book - as an electronic product, and you can buy it from eBooks Inc. for $10 or used from who knows whom for $2, and there is no discernable difference between the products, which would you buy?

Normally we might prefer new products to used because they are in new condition, include all accessories, etc., come with instructions, and so on, but none of these issues apply to electronic books or music or videos. You have them, or you don't. There is nothing else to own.

At the end of the day, that profit that the new product vendor would realize is now gone, and the cut of the sale price that would go to the ebook author or musician is gone, now, too. So there absolutely is a difference.

Re:Resale?

[PhotoJim]

You bring up a valid point - a used book is as useful as a new book. Still, a new book is nicer to read and many people prefer them to used books.

This disappears entirely when it comes to digital products, so I fully expect the used market of digital goods to be significantly more popular than used markets of physical goods.

I make no comment as to the desirability of this - just my predictions of human behaviour.

Re:Resale?

[JWW]

Of course when distributing the $10 digital book, the publisher has costs of nearly $0 to make each copy that is distributed.

That is why I do not buy digital books. They are charging me the same as for a physical (hardcover no less!!) book when their handling costs for distributing books have virtually disappeared. Can't pass those savings on to the customer, no way!! Plus let make it as cumbersome to use as possible.

Note to publishers, we're not your freaking peasants who owe you a special offering to be privileged to use your books on our devices, but only how you see fit.

Publishers, until you give me a lower price that is respective of your savings in distributing e-book, and until you make e-book more usable on various devices, I'll keep checking out books at the library.

Re:Resale?

[Intrepid imaginaut]

It's not really resale they are talking about, it's license transfer.

Re:Resale?

[ediron2]

Until PDF's got to be easier, grad school with internationals gave me a lot of exposure to pirated books out of China, India, Brazil, etc. Everything matches except for the paper quality (had a faint-formaldehyde smell).

Books have cloned quite nicely for centuries. And there's preexisting laws to deal with them. Copyright, however, never superceded the doctrine of first sale. And yet now we're getting sold digital media that copies easier but is denied via other channels.

Three reasonable non-pirate use cases come to mind:
- buying and selling used content.
- transfer of an estate's content (who gets my vinyl when I die, vs. who gets my itunes catalog when I die)
- transfer of content purchased for a minor child, when that child is old enough to open an account (13 or 18 or whatever). News recently had this with a content buyer vs. Steam. This varies from the 2nd because derivative data (characters, experience, etc) makes 'just buy a new one' deeply unacceptable without transfer of that additional data.

Re:Resale?

[fuzzyfuzzyfungus]

I strongly doubt that the patents contain anything of worth(essentially all internet-connected DRM systems already include platform authorization, platform de-authorization, and a payment system, which is all you need to support selling, 'gifting', returns, and resale, so I'd be hard pressed to see anything worth mentioning on top of what already exists); but (given that the only reason that 'digital resale' is a novelty is because of DRM systems), I suspect they contain plenty of flowcharts and arrows, and outline a system that is given legal force by the good old DMCA...

Unless you get caught by the Vernor v. Autodesk, Inc. 'licensed not sold' problem, you can 'sell' kindle books and idevice apps and such. You just don't have any way, without violating the DMCA, of actually making them work.

Re:Resale?

[no1nose]

It's the same story as yesterday; someone resold their copy.

Hey Scott!

[fuzzyfuzzyfungus]

Remember the tragic story of how centuries of people being able to freely sell/lend/whatever the fuck they want printed books exterminated all authors and creativity, leaving only a scarred wasteland, bereft of culture and picked clean by locusts?

Oh, wait, neither do I. Because. It. Didn't. Fucking. Happen.

Re:Hey Scott!

[ohnocitizen]

Well, used printed books have defects. Digital used books will not, unless Amazon/Apple adds digitally ripped pages and coffee stains. In that case why wouldn't potential buyers opt for the cheaper yet identical used digital copy? Surely that will impact the market.

They want it both ways

[denis-The-menace]

They say own it now which implies resale is allowed.
If you try (like on Ebay with Windows CDs) you get told no, it's licenced only. you do NOT own it.

So if it's licensed, you should have access to replacement media when you trash your disc.
If you try they tell you go buy a new copy like the others.

They want it both ways
and terms of life + 70 years is not long enough.

Copyright is not compatible with digital content

[Anonymous Coward]

Copyright thrives on the idea of artificial scarcity. There is no scarcity on the internet.

As people have been saying for quite some time (TechDirt comes to mind), the only way to make money off of digital content is to make the person want to pay you money even in the event you do not control access, distribution or resale of your works.

With e-books

[razorh]

How about they just sell them for a reasonable price (ie. not equal to or more than physical books) at which point there would be no need for reselling.

Re:With e-books

[alen]

the costs of printing the book are tiny compared to the multiple editors, making the cover, and other costs of bringing a book to market.

not like the author just writes a book. it takes 3 or more people to read it and correct hundreds of mistakes, send it back to the authoer, reread it, etc

No more authors?

[gregthebunny]

"until there were no more authors anymore."

Yes, because this free market will somehow manage to write its own books. There will never be a need to generate new content, ever.

Re:No more authors?

[ArcadeMan]

First, you could argue that there is currently more media in the form of books, movies and music than any person could ever read/watch/listen in a single lifetime, many times over. So the "need" to create "new" content relative to each person is currently nil and has been for decades. However, this is only a quantitative argument because media evolves with its era. Science-fiction from the 1940's seems simple and prehistoric from our 2013 point of view.

The second argument would be that there will always be authors. People who love to write stories and compose music will do so with or without financial compensation. It's the same with inventors, who create things because they have the need to create. If it becomes popular and the inventor starts making money because of it, that's only a nice side-effect.

Do not confuse needs with greed. People will always create, even after this concept of "currency" is long gone.

Check out Green Man Gaming

[wikthemighty]

While I'm not so thrilled with their Capsule DRM system, Green Man Gaming has had a system in place to trade in digital games for some time now. I believe the developer gets to set whether or not a game can be traded in.

I really see what you are doing Apple and Amazon

[TheSkepticalOptimist]

The bottom line is any resale model will have to use DRM. There is no conceivable way to do this with non-protected content. You can't resell digital content if there is no guarantee that the original copy will no longer be used by the original owner So yes, if you value saving a few cents off a $0.99 song or app then you are going to have to embrace DRM (meaning to bend over), period.

What Apple and Amazon REALLY want to do is start charging you $30 for an app, movie, book or album under the guise of allowing you to recover some of that financial loss through resale, only to get more money for every future resell of the product. You might get $15 back by reselling a movie, but then Apple and Amazon are going to sett up their resale system to sell back the item for $20, just like the way Gamestop sells used games.

These companies are not going it for our good they are doing it to get more money out of us by ultimately charging more for content and continuing to reap a profit off of content long after it has been "sold". Anybody thinking digital content resale is a good thing is oblivious to common sense and the greed of these companies.

I would prefer the price of content to be so cheap I don't care about recovering back financial investment. There is no reason to resell a $0.99 "thing", Nobody resells a cold cup of coffee. There is every reason to resell something that costs real money and its is obvious Apple and Amazon want us to start paying more money for stuff up front under the guise of giving us an opportunity to sell it to someone else. Just sell it to use for a decent price and end this stupidity.

Revenue != Expenses

[sjbe]

how do you figure they stand to lose more revenue? for one, no overhead (or much less) to host a few meg/gig file than to have a warehouse of 1 million books.

Revenue is not the same thing as Profit. Revenue is how much you sell, Profit is how much you keep. Profit = (Revenue - Expenses). Just because Expenses are lower with digital media doesn't mean a thing by itself. Most of the costs for this sort of media are fixed so Revenue can drop without Expenses falling. If Revenue falls far enough then the company will lose money. It is logical that their revenue might fall but it doesn't automatically follow that they will become unprofitable.

Of course the whole notion of a digital items aftermarket is a bit peculiar...

Simple solution

[ciurana]

The solution is simple and elegant: since these sales will take place over their stores, for items that came from Kindle/App Store anyway, they could have a small revenue share percentage with the copyright holder.

Someone should tell these guys that the alternative is what I do when I'm pissy at Amazon: Calibre to strip Digital Restrictions Management, dump to PDF, share to my heart's content.

Cheers!

E

Re:Copyright is not compatible with digital conten

[Fned]

This is insightful?

Yes.

What copyright does is ENFORCE the idea of artificial scarcity,

Incorrect. Books produced without copyright ARE STILL SCARCE. They still cost something to make, and they still have intrinsic value, even if the printer doesn't pay the author. Copyright in pre-digital media is helpful BECAUSE books exist in a market that has scarcity, because you can't produce books at lower cost than someone who doesn't have to pay the author to produce the work.

The problem with copyright on the Internet is that digital copies are NOT scarce. They have zero intrinsic value, and cannot be made to behave as if they do without breaking all the computers on the Internet. An exclusive right to sell digital copies is like an exclusive right to sell body hairs to Bigfoot.

Inexpensive, interconnected computing is at least a big a deal as the Gutenberg press, but it's hard for people to see history being made this close up.

Copyright still has value enforcing authorship. You just can't build a business model around making copies anymore.

There are some fine and excellent methods for encouraging people to create things that don't require copyright. They are in use right now. You should consider reading about them on the Internet.