We talk
about DRM as if it is the only issue to be addressed in the digital market.
However some would suggest the most onerous digital issue that persists today
is the fact that digital downloads can’t be resold. Like it or not you have it
for life. With music you may be tired of the song, or even the artist, with
software you may have moved onto other software, with books you may have simply
read the book. In all cases if the product was physical it’s yours to resell,
if digital there are no options it’s yours for life – or is it?
The first piece
of news is from the European Court of Justice this week where they ruled that individuals
or companies may resell used software licenses. The case was between UsedSoft a German and US software giant Oracle
ruled it permissible to resell of software bought over the internet and
downloaded. By allowing the resale used packages with often legally obtained
license keys a new owner is able to download the latest version of a given
program directly from a company's Internet site and obtain all new updates and
patches in the process. The European court ruled that the so-called principle
of exhaustion applied whenever software was originally sold to a customer for
an unlimited time span and effectively prevented the producer of the software
the right to prevent the resale of that software.
The court did state that whoever resold pieces of
original software and their accompanying licenses must also erase every copy on
their own computers in advance and that they are not allowed to keep a copy
after resale.
The second
and more interesting piece comes from ReDigi.com, which is a US start-up
launched last year aimed at facilitating the resale of digital music. ReDigi lets
users load old, unwanted tracks into an online music locker, where others can
purchase them for around 70 cents. To ensure it is not flooded with pirate
copies, ReDigi's special software forensically analyses the tracks to verify
that the files were purchased legally, deletes the songs off the seller's
hard-drive, as well as any other devices that sync with it and holds them in a
cloud based locker. As Apple’s contract with its users doesn't prohibit customers from reselling iTunes
bought files,ReDigi only allows
customers to trade tracks bought off iTunes.
Despite the logical and moral process adopted
by ReDigi to protect copyright, Capitol Records is suing ReDigi and accuses them of infringement, arguing
that the transferring tracks amounts to illegally duplicating files and running
a business “built on widespread, unauthorized copying of sound recordings.”
As if they had not
learnt from the Naspter days and the RIAA’s pursuit of individuals the music
business appears to be making yet another public relations blunder. You can
understand them worrying about declining revenues, the emergence of the Spotify
model. But restricting resale only on digital is just going to fuel piracy and
drive more ridicule on an industry that is weighed down with bad decisions and
PR.
If the case
rules in favour of ReDigi it will have a significant impact on all digital media
download sales and it will be interesting to see if the door is left wide open
or caveats are stipulated on the measures that must be in place to permit it. The whole thing could blow open if Apple
where to change their contracts.
However what is most interesting would be the
impact of a used sales market on the migration to subscription and on demand streaming
service rentals such as Spotify. The digital remains 100% pristine and never
gets worn out and there is no packaging to get lost and the digital file will
retain a high residual value that they don’t today. This may even raise the original
cost of files and give the owner value in their ownership that they don’t have
today. If addressed properly there could be secondary revenues on resale to the
creator in the form of royalty.
Merely allowing resales without some changes
would open up a flood gate of secondary sales with little benefit to the
industry.
No comments:
Post a Comment