Challenging assumptions

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In late January, Amazon was awarded a patent for technology that would support the sale of digital goods that had been previously bought by another owner. Amazon isn’t the first company to develop such technology; ReDigi currently operates in the music space, distributing resale revenues to both the copyright holder and the original artist.

Because Amazon is, well, Amazon, Mark Glaser and the folks at Mediashift thought it would be a good time to take a look at the issue of reselling digital goods. Earlier this week, they published “Will Authors Get Compensated for Used E-Book Sales?” by Jenny Shank, who has written an interesting and effective overview of how authors might look at the resale issue.

To put a face on the story, Shank interviewed two authors, Ayelet Waldman and John Scalzi, both of whom opposed reselling eBooks. What’s interesting, though, are the assumptions underpinning their opposition.

The authors claim that the eBooks are effectively licensed, not sold. That’s certainly an argument I accept. But they assume (implicitly) that the revenue available from the sale of a right is the same as the sale of a good.

I have not seen data that tests how much more a consumer might pay for an eBook she could resell. The data might exist; I just haven’t seen it. Maybe it confirms that consumers truly do want to pay as little as possible.

But when Apple convinced labels to offer DRM-free versions of iTunes songs, the company was able to raise its iTunes prices as much as 30%. That wasn’t explicitly a trade for content you could resell, but it illustrates a potential path forward. If people gave an eBook they could resell a higher value, copyright owners and authors would gain.

The second assumption appears to be that people will strip DRM from existing files and sell them without deleting the original version. That’s piracy, and it does occur. But what Amazon, ReDigi and others are patenting is a mechanism to control that process, so that the source file is deleted from the original owner’s library. That’s what the services deserve to get paid for.

The final assumption is one that may have started with Jenny Shank: “But digital copies don't degrade the way printed books do, so the availability of used e-books could also remove readers' incentive for buying new e-books.” Well, not really.

Digital formats may not wear out in the same way that physical books do, but operating systems and file compatibility certainly age. Try running new apps on the original iPad, not even three years old at this point. Try using Stanza, the pioneering eBook reader no longer supported by Amazon, on any iOS device.

Sooner or later (I am voting sooner), we’ll have problems running an EPUB 2.0 file on an otherwise functional reader. I know, we were promised backward compatibility. But you get only a limited version of that in a closed universe like Microsoft Office. Good luck preserving digital compatibility in the open web.

There’s much more in the MediaShift report, and I encourage you to read all of it. Waldman and Scalzi argue that revenue from a secondary sale should be shared, maybe exclusively, with copyright owners or artists. In the United States, that flies in the face of the first-sale doctrine.

Perhaps it’s time that we challenge the old orthodoxies, but I’d rather not challenge them on the margin. Let’s gather data on things like consumer willingness to pay, the impact of piracy and the likely persistence of digital formats. That’s a baseline that can help us look at copyright as a whole.

Brian O'Leary

About Brian O'Leary

Founder and principal of Magellan Media Consulting, Brian O’Leary helps enterprises with media and publishing components capitalize on the power of content. A veteran of more than 30 years in the publishing industry and a prolific content producer himself, Brian leverages the breadth and depth of his experience to deliver innovative content solutions.

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