Amazon prepares to enter the used digital goods resale fray
The headline news this week was Amazon being awarded a US patent for a “secondary market for digital objects,” which according to the patent abstract, include “e-books, audio, video, computer applications, etc.” — so, pretty much anything.
Todd Bishop reports at GeekWire that “[t]he patent, originally filed in 2009 and granted on Jan. 29, covers transferring digital goods among users, setting limits on transfers and usage, charging an associated fee, and other elements of a marketplace for ‘used’ digital goods.” He also notes Amazon’s approach of limiting the number of transfers of used objects to “maintain scarcity.”
Amazon won’t be the first to test the waters in reselling digital content. ReDigi has been running a pre-owned digital marketplace for music since 2011 — and has been defending its business practice in court against Capitol Records. In response to Amazon’s patent award, the ReDigi team issued a press release, stating “ReDigi believes the Amazon patent is further proof that the secondary market is the future of the digital space and that there is no turning back” and comparing their platform to their understanding of the platform Amazon has patented.
Another consideration in all this stems back to the Kirtsaeng d/b/a Bluechristine99 v. John Wiley & Sons Inc. case currently being considered in the US Supreme Court. Reporting on the case at Wired last year, David Kravets explains that “[t]he case tests the so-called ‘first sale’ doctrine, which generally allows the purchaser of copyrighted works to re-sell or use the work without the copyright holder’s permission … But how the doctrine applies to foreign-purchased works — the so-called gray market — has been a matter of considerable debate.” That decision, expected soon, will directly and immediately affect physical goods, but the ramifications will extend to the resale of digital goods in the future as well.
Gannett’s paywall success, Digital First Media’s data-for-content exchange
Poynter’s Rick Edmonds reports some good news for community newspaper paywalls this week — Gannett’s fourth quarter earnings report indicates its 80 community newspapers have been very successful with digital paid subscriptions. “With 46,000 new digital-only subscriptions, digital access deals for existing print customers, and aggressive subscription and single-copy price increases for print editions,” Edmonds writes, “Gannett has reached a milestone: Circulation revenue growth for the quarter more than made up for print advertising losses.”
Edmonds reports that the 46,000 subscriptions only amount to about 2,000 per paper but that “CEO Gracia Martore said that the company achieved that with little or no marketing” and subscriptions totals are expected to rise to 250,00 to 300,000 by the end of the year.
In related news, Digital First Media CEO John Paton announced a new Subscription Project in a blog post this week. Paton writes that when he took charge of the MediaNews Group in 2011, he looked at the performance of the newly launched paywalls at the group’s 22 smaller dailies and found their performance after a year to be “abysmal.” So, he’s now experimenting with a new partnership with Google in which readers “pay” by answering Google Consumer Survey questions — exchanging data for content. He also says they’re considering trying “an interstitial ad” in place of the survey on some sites.
“It is too soon to say what will work and what won’t,” Paton writes, “[b]ut I think we can say that emotional arguments over what something is worth in a market economy is a near worthless waste of time at the expense of finding real solutions to the problem.”
The future of publishing — yes, there is one
Baratunde Thurston assured publishers this week that their industry isn’t doomed. We can lament our losses, he says, but to wallow in them too long “would be to miss what’s thrilling about all this change.” He argues that, given the fact that more books were published in 2011 than ever, coupled with the number of blogs, texts and status updates, “words are a growth market.” Thurston writes:
“A look at several of the most interesting apps available today reveals strong hints about where those words are headed. Findings is a web app that allows clipping, linking, sharing, and thus deep remixing of segments of text previously trapped within bound volumes. The e-book platform Readmill makes the Kindle look like a stone tablet in the way it lets readers compare content — and have a conversation — about several books at once. The iPhone apps Circa and Tapestry are among the first text experiences on a smartphone that feel built for mobile first.
“Yet we’re doing more than digitizing words and adding tantalizing interfaces. We are networking them — and the ideas they represent. What excites me most about the future of reading is the linking, translating, co-creating, and discovering we have yet to do.”
You can read Thurston’s piece at Fast Company — it’s this week’s recommended read.
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