Books written by Ray Sullivan

Thursday, 4 April 2013

Digital Reselling Declared Illegal

We've all been to car boot sales, which for the US readers are garage sales on an almost industrial scale.  I can't say I really embraced the concept - I wandered around a few in the 1990s wondering why I wanted to buy second hand junk when I had a house full already.  Then I had a go at selling some of that junk and we made a nice return on our day, but it was a frightening experience.  I mean, nobody told me that the other sellers would descend on my Volvo like wolves coming in for the kill.  I hadn't even applied the handbrake, let alone turned off the ignition, when the tailgate was wrenched open and stuff started to disappear towards other stalls.

Of course, the world keeps turning, and today we can offload our junk on eBay.  Rip the tailgate open  uninvited there, why don't you?

The main attraction of buying and selling second hand, to me, would be the music.  As a teenager, in a world that hadn't invented car boot sales, I would wander around second hand record shops and peruse Exchange and Mart, buying second hand records, especially US Motown imports.  I wasn't as proactive at the selling bit, the part where the more savvy peers released equity in their record collections to acquire new records.  I just worked and saved.  Those records are forming part of my organic loft insulation material now, although I do occasionally bring some down to spin on the record deck, if only to check it still works.

Naturally I gravitated to CDs and have plenty of those, celebrating a broader range of music than my vinyl collection.  Most still see daylight in the sense that the shelving units are not in the attic, but I reckon many haven't been played in anger for some time.  If I was half smart I'd sell them on eBay or take them to the local car boot sale.

The ever turning world, though, has shunned the physical properties of vinyl and CDs, and many of us are buying our music out of the ether.  We pay Apple or Google or Amazon for the right to have a piece of music on our hard-drives and it slips on there from a passing cloud.  They even keep a version in their cloud, just in case I don't want to over-fill my terabyte storage units.

The one difference is that  unlike the physical items, I can't take my Apple downloads to the car boot sale and even though eBay is effectively a cloud based medium I can't sell them on it either.  Which might seem strange as I can legally sell my old CDs and vinyl if I want.

One company thinks it seems strange, too.  ReDigi has come up with an elaborate scheme that they claim gets around the suspicion that owners of digital media might sell the rights to their music and, perhaps keep it too.  They have designed software that is installed on the music owner's computer - strictly the music license holder's computer, actually - and when that person decides they don't want to own a song anymore it is erased from their life and made available for sale through ReDigi's cloud.  It sounds thorough and you could see it extended to other digital media such as eBooks.

But the courts think not.  I guess the fact that I could sell my CDs and vinyl to people on eBay or down the local car boot sale doesn't mean I haven't made illegal copies, as opposed to security back ups, of them first.  However there is a concept in law that puts that suspicion to one side.  This concept is called 'the first sale doctrine'.  It's what allows you and me to sell our CDs and books after we've used them and prevents the original manufacturers of those products blocking the sale.  If the concept of selling such items hadn't occurred until now and then someone invented eBay I expect the music industry would be howling in anguish at the thought.  To be fair, they probably do.  There isn't much they don't howl in anguish at these days.  However, experience shows that the second hand market didn't do for the industry.  That market was most buoyant when the music industry was at its strongest and it seems reasonable that the second hand market needs a strong primary market to support it, and vice-versa.

The way the courts have viewed the new digital download media, though, is that it is that one step further along the path that allow easy duplication.  The US judge, Judge Richard Sullivan - no relation BTW, ruled, in a case brought by Capitol Records, that the reselling of the digital media would be likely to have a real detrimental affect on the record industry.  Interestingly, ReDigi are trying to protect the artists involved - they claim 20% of the sale price goes to them (but not to the record company, it would seem).  I bet that never happens on eBay or down the car boot sale.  Importantly the judge has dismissed the claims made by ReDigi that they have made the necessary safeguards to prevent unauthorised copies being made.  It's a thorny issue and one that Apple and Amazon have been reported watching on the sidelines.

Amazon's interest is obvious; they've moved from being a prime seller of physical music to muscling in on the cloud based retail side.  They've also got a burgeoning business reselling second hand goods - in fact that's how they started back in the day, with used books.  Apple's interest is probably more complex.  On the one hand they probably don't want to risk upsetting the delicately forged agreements they have made with the music industry - it's been a tough walk for both parties over the last ten years - but they also will know that the music industry can't easily undo the digital music market.  I would say that it isn't going to go away, no matter what, but Apple probably don't want to be seen as the bad guy with their reluctant friends.  They also don't want to miss a slice of the market just because of high principles; if Amazon start reselling music then they'll steal primary and secondary business from iTunes and probably will hurt the core Apple model.

Capitol asked the judge to award them $150,000 damages for each infringement of their intellectual rights, however he obviously hasn't finished with this one as he's asked both parties to provide statements for the next steps in the case - at least the lawyers are getting fed this month.  Meanwhile ReDigi are still operating as if nothing has happened and their website is declaring that it will be moving into Europe sometime soon.

I'm not convinced this one is over.  It may be for ReDigi - they may become the sacrificial lambs that set the foundations for whoever gets past the judges.  If and when this becomes fully legal then it will be a short step for eBooks.  As I said in an earlier posting, piracy probably doesn't hurt sales as the kind of person who would obtain a pirated version of a book, video, CD - whatever - probably wouldn't pay for it if it wasn't available for free, however the kind of person who might pay for a second hand eBook - with 20% of the cost going to the author - might actually drive the eBook market forward and, dare I say it, accelerate the process towards realistic pricing of new eBooks.


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