April 16, 2013 What Would You Pay for "Used" Digital Access Rights?
The United States Supreme Court has ruled 6-3 to uphold your right to resell legally-purchased physical goods contaning copyrighted elements, even if the copyright holder objects. Meanwhile, a U.S. District Court judge ruled to block your right to resell legally-purchased digital downloads containing copyrighted elements. Where does this lead?
If companies cannot limit consumer ownership rights to physical goods, that may just hasten their transition to all-digital delivery. But courts are fickle, and future rulings could extend re-sale rights to digital downloads. Better for companies to keep digital goods in the cloud and sell access to them.
The major players are taking steps to make non-exclusive rights to access cloud-based digital goods feel like ownership. Since the November 2012 announcement in that the Supreme Court would hear the Kirtsaeng v. John Wiley & Sons case, both Apple and Amazon have received patents indicating they are working on technology to permit buyers of e-books and cloud-based music files to resell these products. Don’t be fooled into thinking this will give you full ownership rights.
Physical media — books, LPs and the like — are scarce objects. No matter how many are made, the number is finite, the individual objects are unique, and are subject to wear, damage and loss over time. The ones that survive retain value according to their condition. And you are free to sell them to a willing buyer.
Digital media files — information stored in bits-only form — are infinite objects. There is no limit on the number of people who can simultaneous possess the information, each copy is identical, and does not degrade over time. The value of infinite objects is in the information transfer; the objects themselves have no retained value. But you should be free to sell them as long as you actually transfer possession to a buyer; the value of the transaction is based on its convenience.
Cloud-based digital media files are shared objects. Only one copy need exist because possession is retained by the owner (Apple, Amazon) who can sell an infinite number of individual rights to access the file. Amazon’s rumored system for selling your “used” Kindle titles merely turns off your access to the book(s) and enables access for someone else. There is no transfer, making it impossible to place a value on the transaction. Why are “used” digital access rights worth any more or less than the original rights?
Furthermore, Amazon has announced Coins, a virtual currency obtained via credit card which will be used by Kindle Fire owners to purchase games, apps, content, and in-app purchases on their tablets. Expect any transaction in the virtual secondary market to be denominated in virtual currency, which amounts to “store credit” issued to the seller. (We all know how coupons convince us to spend more money.) Hard currency enters these walled-off digital ecosystems, but it never comes out.
Ownership of music still trumps access in the cloud when audio fidelity and freedom of choice are considered. All my weightless digital library files play identically, whether the material was originally sourced on vinyl, CD, or legally-purchased download. That same homogeneity should extend to selling any or all of the files, or donating the library after I’m gone. Stand up for First Sale protection everywhere.
[About the author. Consumer Electronics and Software industry veteran Tom Dennehy publishes the online journal Surface to Air, triangulating among ideas and events at the intersection of the analog music past and the digital future. Follow him on Twitter @InAurem_a2d.]
Reader Comments (1)
I believe that you should have the right to resell a digital product that you have purchased. However should only be limited to selling it once.
The issue with reselling digital products is that product creators are weary that customers will copy the products many times over and resell which in effect will lower revenues for the creators.
To use an example, if I purchase a song from itunes, i should have the right to sell it back either to Apple or to someone else on a one off basis. If I PURCHASED it then it should be mine to do as I please. Otherwise it would be a form of hiring if I lose the ability to resell.