US Judge rules against 2nd-hand digital music sales

[Fbone]

Originally Posted by Ninjalawyer

It's too bad really though. Being able to resell digital goods makes them more valuable in the eyes of the consumer, so a benefit to producers who want to set the price as high as they can. and it's unlikely anyone is going to bother jumping through the hoops necessary to keep a copy of a song they resell since it would have been easy enough to pirate it in the first place.

It may also eliminate sales and promotions. One could download all the free KDP Select titles, Daily Deals, mp3s and apps and sell them when the promo ends. Receive most goods for free and sell for 99c would be earn you hundreds of dollars a day.

[HarryT]

Originally Posted by Fbone

It may also eliminate sales and promotions. One could download all the free KDP Select titles, Daily Deals, mp3s and apps and sell them when the promo ends. Receive most goods for free and sell for 99c would be earn you hundreds of dollars a day.

It would kill the market. No reason to buy a new ebook if you could buy a "2nd hand" one, because (unlike a paper book) they'd be identical.

[Ninjalawyer]

Originally Posted by HarryT

It would kill the market. No reason to buy a new ebook if you could buy a "2nd hand" one, because (unlike a paper book) they'd be identical.

Or perhaps it would lead to more creative promotions. Or maybe just less promotions. Or maybe it would allow producers to sell for more in the first place because consumers are willing to spend more on a product they can resell. A robust used market in the physical goods space often supports and enhances the market for new goods, and I'm not convinced the same couldn't be true for digital goods.

I just don't think it would necessarily "kill" the market, but it would definitely change it and make for some interesting scenarios.

[ApK]

Originally Posted by Jozawun

The word "phonorecords" comes from the Act, not the Judge.

Correct. There's some discussion of the definition in this doc:
http://scholarship.law.duke.edu/cgi/...7&context=dltr

[usuallee]

Originally Posted by ApK

Correct. There's some discussion of the definition in this doc:
http://scholarship.law.duke.edu/cgi/...7&context=dltr

Thanks for posting that. I can see that "phonorecord" was the legal term applied to records, cassettes, etc, as a catch-all for any copyrighted recorded material, and now they are talking about digital phonorecords.

Even though thanks to you I now have a basic understanding of the term from a legal perspective, it still makes me chuckle to hear mp3 files referred to in that manner

[usuallee]

Originally Posted by HarryT

It would kill the market. No reason to buy a new ebook if you could buy a "2nd hand" one, because (unlike a paper book) they'd be identical.

Originally Posted by Ninjalawyer

Or perhaps it would lead to more creative promotions. Or maybe just less promotions. Or maybe it would allow producers to sell for more in the first place because consumers are willing to spend more on a product they can resell. A robust used market in the physical goods space often supports and enhances the market for new goods, and I'm not convinced the same couldn't be true for digital goods.

I just don't think it would necessarily "kill" the market, but it would definitely change it and make for some interesting scenarios.

I kind of lean toward agreement with Ninjalawyer, though I see where HarryT is coming from, from a practical standpoint. Home cassette recorders were supposed to kill the record industry, VCRs were supposed to kill the movie industry. Hell, the phonograph was supposed to kill live music. We see now that those were alarmist reactions that didn't pan out that way at all - quite the contrary in fact.

And yet the digital realm is a different beast. I think the key component in selling used is to make sure the original owner really does reliquish the file. With the "tools' that are out there, I don't know that that's possible. So I agree with Harry T that if not done properly (which may well be impossible), a used market could harm primary content creators and the "new" market.

It'll be interesting to see how it plays out.

[HarryT]

Originally Posted by usuallee

And yet the digital realm is a different beast. I think the key component in selling used is to make sure the original owner really does reliquish the file. With the "tools' that are out there, I don't know that that's possible. So I agree with Harry T that if not done properly (which may well be impossible), a used market could harm primary content creators and the "new" market.

Let me stress that I'm not talking about piracy, although I agree that this is an important issue also.

The specific thing which differentiates a digital product from a physical one is the fact that the digital product doesn't degrade as the physical one does: a second-hand ebook or MP3 file is absolutely identical to the original in every way. Thus, given the choice between buying a "new" eBook for, say, $5, and a "2nd hand" one for $3, there would be no reason - ever - to buy the new one. Thus, to my mind, the mere existence of 2nd hand digital goods would instantly destroy the market for new goods, and that's bad for the consumer in the long term. I honestly don't see how any form of creative marketing could overcome this.

[usuallee]

Originally Posted by HarryT

Let me stress that I'm not talking about piracy, although I agree that this is an important issue also.

The specific thing which differentiates a digital product from a physical one is the fact that the digital product doesn't degrade as the physical one does: a second-hand ebook or MP3 file is absolutely identical to the original in every way. Thus, given the choice between buying a "new" eBook for, say, $5, and a "2nd hand" one for $3, there would be no reason - ever - to buy the new one. Thus, to my mind, the mere existence of 2nd hand digital goods would instantly destroy the market for new goods, and that's bad for the consumer in the long term. I honestly don't see how any form of creative marketing could overcome this.

I think your points are legitimate, but I will respectfully disagree that they are a valid reason to not have a used market for digital goods at all. I will explain. First of all, I think supply/demand would take over and for your $5 ebook the going rate for used might be more like $4.50 (admittedly, I base that on nothing concrete). The fact that there is no real difference between "new" and "used" I would assume goes both ways - there would be no reason to sell a used one for significantly less than new.

I do also agree with Ninjalawyer people might be willing to pay more for new digital items that they have the opportunity to resell. To your point about digital goods not degrading, CDs and DVDs don't either in any significant way with just minimal care, and used bookstores ( in the U.S. at least) are riddled with apparently unread new or nearly new books.

Finally, as with tangible media products, people could choose to support artists by buying new, either on principle or because they took a chance on a cheaper used copy, liked it, and became a fan of that artist or author thereafter.

And with that I suppose I should try to get some actual work done

[ApK]

Originally Posted by HarryT

Let me stress that I'm not talking about piracy, although I agree that this is an important issue also.

The specific thing which differentiates a digital product from a physical one is the fact that the digital product doesn't degrade as the physical one does: a second-hand ebook or MP3 file is absolutely identical to the original in every way. Thus, given the choice between buying a "new" eBook for, say, $5, and a "2nd hand" one for $3, there would be no reason - ever - to buy the new one. Thus, to my mind, the mere existence of 2nd hand digital goods would instantly destroy the market for new goods, and that's bad for the consumer in the long term. I honestly don't see how any form of creative marketing could overcome this.

Assuming we're talking about only keeping one legitimate copy per sale in existence at one time, if there were no new purchases, there would be no used ones to resell, so it would not destroy the market, it would change it.
The marketing that might overcome it might be, for example, value added content or services--precisely the same factors that keep people buying new physical good from various retailers even though the price for the exact same thing might be less elsewhere.
There is also the possibility that more people would be inclined to purchase more new content if they knew they could recoup some of their cost later if they don't want to keep their copy.

[Ninjalawyer]

Originally Posted by ApK

Assuming we're talking about only keeping one legitimate copy per sale in existence at one time, if there were no new purchases, there would be no used ones to resell, so it would not destroy the market, it would change it.
The marketing that might overcome it might be, for example, value added content or services--precisely the same factors that keep people buying new physical good from various retailers even though the price for the exact same thing might be less elsewhere.
There is also the possibility that more people would be inclined to purchase more new content if they knew they could recoup some of their cost later if they don't want to keep their copy.

Indeed, there are lots of opportunities where 2nd hand digital goods are available. For used videogames, for example, many studios add additional services to the single player experience (multiplayer, free unlocks, etc.) to keep people from selling and to devalue used copies.

Saying that this would "kill" or "destroy" the market is hyperbole. It would definitely make things more difficult for those who want to rest on their laurels and continue to do what they've always done, but it would also create opportunities for new and interesting business models.

Like you said, the widespread availability of used goods would depend on sales of new goods, sales which would be driven up by the ability to resell. Further, it is unlikely that the cost of a used good would be that much discounted given the lack of degradation, giving people even less incentive to buy used. And there are many examples of artists making money on "pay what you want" schemes, so people will alter their behaviour to support an artist they like if they're given a reason to do so.

It's all academic in the U.S. of course, but I really don't think used digital goods would be some kind of disaster.

[HarryT]

Originally Posted by Ninjalawyer

Saying that this would "kill" or "destroy" the market is hyperbole. It would definitely make things more difficult for those who want to rest on their laurels and continue to do what they've always done, but it would also create opportunities for new and interesting business models.

If a new ebook cost $5, and a used one $4.99, what reason would there be to spend even 1c more on the new one? It would at best have an extremely detrimental value on the marketplace, to my mind. I don't think it would be beneficial for the consumer, other than in the very short term. But I may of course be wrong. Time will tell.

[ApK]

Originally Posted by HarryT

If a new ebook cost $5, and a used one $4.99, what reason would there be to spend even 1c more on the new one?

To reiterate:
1. Because if no one paid the $5, or folks did but not enough of them wanted resell their copies to meet the demand, there would be no copies available at $4.99.
2. Because someone prefers the services offered by the $5 seller over the those offered by the $4.99 seller.
3. Because someone trusts/likes the $5 seller more than the $4.99 seller.

Again, many of the same reasons that keep multiple retailers in business today even though prices on the same goods can vary.

Sometimes by even more than a penny.

ApK

[pdurrant]

I think that this is an area where the law and society haven't yet come up with something that would be seen as fair by most people.

It seem wrong that purchases of digital media are non-transferrable. But, given the nature of digital files, it also seems wrong to allow unregulated resale.

I really don't know what the solution is, but I'm sure that it will require new legislation, as I don't think the existing laws (anywhere) adequately address the situation.

[Fbone]

Originally Posted by ApK

To reiterate:
1. Because if no one paid the $5, or folks did but not enough of them wanted resell their copies to meet the demand, there would be no copies available at $4.99.
2. Because someone prefers the services offered by the $5 seller over the those offered by the $4.99 seller.
3. Because someone trusts/likes the $5 seller more than the $4.99 seller.

ApK

1. It could still reduce the creator's sales by 50% at the $5/4.99 scenario.

2. Both sellers would probably be the same. Amazon, Apple, etc.

3. Very possible if the reseller is 3rd party. I would want Federal, State and International immunity from prosecution for unauthorized downloading.

[taustin]

Originally Posted by HarryT

If a new ebook cost $5, and a used one $4.99, what reason would there be to spend even 1c more on the new one?

Convenience, reputation of the seller, easier to find, ethics of buying used, service levels, there are a million reasons.

And, in the end, the publishing industry aren't not going to just curl up and die, even if they claim they will. They'll adapt, as they always do.