Ebook Resale

Secondhand Downloads: Will Used E-Books and Digital Games Be for Sale?

11 February 2015

From Bloomberg:

Should consumers be allowed to resell digital songs, books, or video games once you’re done with your downloads? If it sounds unlikely, just remember that businesses trafficking in second-hand records and books were once considered controversial before society came to accept them as normal—at least up until the Internet undermined the logic of resale. The next several years should be key to whether a similar industry emerges for digital goods.

The issue came up recently while I was reporting a piece about the future of GameStop, a used video game chain that holds the dubious distinction of being the most-shorted stock in the Standard & Poor’s 500-stock index. One of the reasons for the pessimism is the widespread belief that GameStop will fade away once the industry completes its inevitable transition to digital downloads instead of discs.

Executives at GameStop believe they can change that by inventing a way to sell used version of digital games, and at least one startup is trying to do the same for digital music. But unlike the established economics of secondhand CDs, DVDs, and game discs, the mechanics of selling used digital media are murky at best and not clearly legal. The issue is working its way through the courts and might end up in front of Congress later this year.

The question centers on a part of copyright law known as the first-sale doctrine, an early 20th century provision that prevents rights holders from seeking to stop the sale, trade, or lending of legally acquired property. You can thank first sale for making it legal to run a used record store, found a public library, or lend a DVD to a friend.

. . . .

ReDigi makes the same argument for music that GameStop has made when publishers complained about the used video game trade: If people can resell their old media, they will spend the proceeds on new stuff, and everyone ends up better off. By this logic, the unplayed songs in someone’s iTunes library are an untapped hoard of cash waiting to flow into the coffers of record companies.

This is not an argument that has persuaded those who supposedly stand to benefit. A House Judiciary subcommittee held hearings last June on potential reforms to copyright law, and several media companies warned against expanding first-sale doctrine to cover purely digital goods. “Doing so is not only unnecessary, it would radically alter the nature and purpose of the doctrine,” Matthew Glotzer, then a senior vice president of Fox Entertainment Group, told the committee.

The big difference is that digital media items don’t get old. Used books or albums are worth less than new copies because they deteriorate with use, and it takes some effort to pass each copy from person to person. A “used” digital file, though, is exactly as valuable as the original and just as easy to distribute. The U.S. Copyright Office has already recognized that digital goods are fundamentally different from physical ones—first-sale doctrine, it has said, works only because of the specific nature of physical objects.

. . . .

A transaction that looks like the sale of digital books or movies is often, in legal terms, a licensing agreement between a copyright holder and an individual user. Sure, downloading a book on a Kindle feels just like buying a paperback in a bookstore. But the digital transaction deviates from an actual sale and often includes restrictions on how the file can be distributed. Public libraries, for one, have complained that the licensing agreements for digital books make it impossible to operate as they have always done with physical copies.

Sherwin Siy, the vice president of legal affairs for digital consumer advocacy group Public Knowledge, thinks that legislators should establish new rules making it clear that transactions that feel like sales—such as those that include clicking a “buy” button—legally result it the actual transfer of ownership. “The most prominent representation of the transaction should hold,” he told the House committee last June.

Link to the rest at Bloomberg

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Dutch e-book resale site has to close for now, court rules

21 January 2015

From PCWorld:

Dutch ebook resale site Tom Kabinet has to close because, at least at the moment, it cannot prove that all the books offered for sale on the site have been legally obtained, an Amsterdam court ruled Tuesday.

Tom Kabinet, which allows sellers to upload ebook files to the site, has been online since June last year. It asks sellers to verify that the ebooks being uploaded were legally obtained, via a declaration in which they also state that they will erase their copy after the upload. That, however, is not enough, according to a court.

The verdict of the Amsterdam Court of Appeal is a mixed bag for Tom Kabinet, because it also ruled that it is legal to offer a platform on which legally obtained ebooks can be resold. However, as Tom Kabinet also potentially provides a “relatively simple and lucrative opportunity” to resell illegally obtained ebooks and has no way to guarantee this will not happen, the site will have to close for now, the court said in a news release.

. . . .

Judith Mariën, one of Tom Kabinet’s founders, said that despite the mixed verdict, it is “good news” that the court ruled that the site’s business model is essentially legal.

In the coming days Tom Kabinet will try to find a way to keep the site online by toughening up the process to filter out illegally obtained ebooks, which can possibly be done by checking the digital watermarks of all incoming ebooks as well as of those in the database, Mariën said.

Link to the rest at PCWorld

Dutch court lets ebook reseller stay online

22 July 2014

From PC World:

Dutch publishers have failed in their efforts to immediately close down ebook reselling site Tom Kabinet.

The Amsterdam District Court ruled Monday that the reseller can stay in business, after the Dutch Publishers Association (DPA) filed a preliminary case at the beginning of July to urgently close the site for copyright infringement.

Tom Kabinet offers a platform that it says lets users legally sell used ebooks. Sellers have to declare they obtained their copies legally and agree to delete their versions when a sale is made. While the service has no way to verify whether a copy is legal or whether copies were deleted by their original owners, it does add a water mark to the ebook before it is sold in order to track down possible illegal distribution.

Tom Kabinet argued that its activities are legal under a 2012 ruling by the Court of Justice of the European Union (CJEU) that permitted the trading of “used” software licenses.

Link to the rest at PC World

Will Authors Get Compensated for Used E-Book Sales?

12 March 2013

From PBS MediaShift:

On January 29, Amazon Technologies Inc. received a patent pertaining to the “secondary market for digital objects.” According to the patent abstract, the technology will enable Amazon customers to transfer — and presumably sell — e-books, MP3s, and other digital files to other customers. And, Apple too has filed for patents on the transfer of owned digital items.

The whole issue of used digital goods is a big one, with far-reaching implications for media in general, but music and publishing in particular.

. . . .

It’s still unclear however, if Amazon will actually use the patent. And if it does, how it might structure such a business. An Amazon representative declined to comment to MediaShift on the issue.

. . . .

Still, prominent authors have begun to debate what the potential sale of used e-books would mean for the publishing industry and the writers who depend on it. If used e-book sales follow the model of used print book sales, they will provide no revenue for authors and publishers. 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.

In selling used digital music, ReDigi differs from other used goods marketplaces (including how Amazon deals with used physical goods) in that it pays both the copyright holder and the artist. Recently at the Tools of Change conference in New York, ReDigi CEO John Ossenmacher assured the book industry that the company would also compensate publishers and authors with e-book resales.

. . . .

Bill Rosenblatt, president of digital consulting firm Giant Steps Media, summed up at the Tools of Change conference the ramifications for authors by simply saying that they’re most likely to be the ones stuck in the middle. The winners will be the resellers, libraries and consumers. The losers will be conventional publishers and new retailers. But for authors, it could go either way.

“Perhaps the increased economic activity of digital resale will make up for any losses in new sales,” Rosenblatt said.

. . . .

John Scalzi wrote on his blog, “There’s a direct correlation between me getting paid to write novels, and me writing them.”

Do readers fail to appreciate that their book purchasing decisions affect whether or not their favorite writer can produce another book? Scalzi said this might be true.

“People don’t see creative people as they are in reality,” he said. “Ninety-nine percent of everybody in a creative field is barely eking by. Also, when it comes right down to it, people like getting bargains. They’re not following the product chain back to the initial starting point.

“People are always going to want to get things inexpensively, so part of our job these days is to remind them there’s an actual human being on the other end of the equation, and that actual human being has rent to pay, and children they’d like to feed. The vast majority of writers are not like Stephen King or J.K. Rowling or Suzanne Collins. The average author makes a four-figure salary a year from their writing. If you don’t pay them, a lot of them will decide they can’t afford to write professionally anymore.”

. . . .

In a February 7 post on his blog, Scalzi wrote, “I would rather you pirate the e-book than buy it used.” When asked to explain this comment, he said, “If you’ve made the determination that you’re not going to pay me for the book, I don’t see why [Amazon CEO] Jeff Bezos or anyone else should get paid. I’m the guy who wrote it. Why should they get paid? All they are doing is giving you a space to sell that thing. They’re going to take a cut out of work that other people did.”

Link to the rest at PBS and thanks to Jeanne for the tip.