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Used ebooks: Why your assumptions are wrong and the opportunity is huge

It can be so much more than simply lower-priced versions of the original work

Amazon has a patent and now Apple does too. I’m talking about the techniques both companies might use to let you resell your digital content. They join ReDigi, who already offers a platform to resell your digital music.

Ebooks are next, of course, and the concern I hear isn’t so much about the legal aspect but rather the risk of cannibalization. Most publishers seem hung up on the notion that a used ebook sale will mean one less original sale for them. And even if they participate in the used ebook revenue stream, they’re concerned that the selling price will be lower, so they’ll make less when cannibalization happens. I think that’s a very shortsighted view of the opportunity.

This isn’t just about lower-priced versions of the original work. It’s time to think about the added-value aspects of a used digital content platform.

I’ve written before about how consumer might be able to resell their highlights and notes. Let’s take that a step further. What if someone reads a 300-page business ebook and condenses the key lessons into 10-20 pages? Think of it as the Cliffs Notes, summarized version. Let’s further assume that reader bundles their summary with the original ebook they bought and sells it via a used ebook marketplace. Could they charge more for their version? Absolutely.

You’re concerned about this being more attractive than the ebook by itself? You should be. But what if the publisher owns this platform? What if all these sales were done directly by them, so they’re capturing 100% of the revenue stream and sharing the appropriate cut with the author? Now let’s take it another step further… What if that reader isn’t just able to sell the one copy they bought, but an unlimited number of copies that come bundled with their summary? The consumer price of this version would be higher than the version with the ebook by itself and the reader who created the summary would receive a portion of the difference between those prices, essentially making them a royalty-based author on the bundle.

Btw, there’s no reason the original author couldn’t create this summary instead of or in addition to whatever is created in the reader community. In fact, why not open this up to all readers to create their summary of the ebook and let consumers decide which version they want? Use a voting system so that the best summary writers build a reputation and generate the most income.

These summaries aren’t limited to written material either. There’s no reason video couldn’t play a role here. There’s also plenty of room for an idea I suggested a couple of years ago: The “VIP Notes Edition.” The key is to create a model where author, publisher and summary writer all share in the revenue stream.

So let’s stop thinking of the used ebook market as yet another step towards the race to zero content valuation. This is different from the used print book market and it represents some very interesting opportunities for publishers who are willing to embrace a new model.

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Comments: 18

  1. Why would Amazon and Apple open their systems so that an individual can resell their book?  B&N in its hay day did not deal in used books.  

    There really is not any money in it for a commercial firm.  

    • With all due respect, I think you’re totally wrong on this. Amazon does quite well in their used print marketplace and there’s no reason to assume digital couldn’t be as, if not more, successful. B&N has, and still does, offer a used print marketplace on their site, btw.

      • I stand corrected.  

        The Amazon used sale is a pass through to a used book dealer. The have no inventory and I would bet the used book seller pays to be on the site. 

        In the case of the Kindle edition, Amazon would have to provide the programming to make a used Kindle edition available. The seller would have to list the title and pay an up front fee to be on the Amazon site and be ready to collect the money. I for one would find that a real hassle. Additionally, I may have to become a company to do it.  

      • Show us the data that Amazon does well with their used print marketplace.

  2. Someone from Amazon’s legal department once told me that Amazon makes more money on used book sales than new ones. Why wouldn’t they want to do the same with “used” ebooks? I would love to join them before everyone decides to do it.

  3. Kind of like fan fiction for nonfiction. This introduces lots of other issues like derivative works, repurposing or mass quoting of protected content, etc. I can see something like this in theory, but there needs to be some protection for the authors here. A dedicated hobbyist could, for example, create a much more evolved and decorated edition that not only dilutes the original’s value but also subtly or not so subtly shifts its meaning and emphasis. Some writing can be collaborative, but the original author should have some choice as to where his/her words end up.

    Also, I’d say very few readers would actually be inclined to do this extra work, so there needs again to be safeguards in place for that very large number of works that are to be resold without embellishment.

    In the end, we all know that Amazon is all about money and price and will always skew in the direction of convenience and low cost to its customers. Good for them, but we’d be fools to think that they have any interest in protecting author and publishing rights.

  4. What many see as problems or challenges, I see as opportunities.

  5. “Used” or “Loaned” ebooks will work IF and ONLY if some (supposedly) uncrackable DRM scheme is implemented to enforce the simple rule that exists in the physical world, namely that each pBook is a unique copy and if I resell it or loan  it out, I no longer have access to that copy. And we’ve all seen just how well and warmly DRM is received in the world. 

    This proposal is also a scam by which publishers can “tax” sales of used books as they can’t in the physical world, which is why they hate used books. Wanna bet they’ll demand a transfer fee for each re-sale and enforce it with all the fine subtlety and gentleness we’ve all gotten used to from the movie and record industries?

  6. How is a repackaging a “used” ebook, complete with reader commentary and other relevant contextualizing enhancements, any different from “social reading?”  Seems to me the whole idea of a “used” ebook is kind of absurd.

    • You’re right that the word “used” isn’t the best one for this description. But everyone seems to understand what it means so that’s probably why it’s so common. I’m not sure I’d go so far as to say this is really social reading though. What if I just resell my ebook when I’m finished with it, adding nothing to it and accepting a lower price than the “new” one costs? That’s not social reading. It’s simply resale.

  7. I have two questions: Will the author share in resale of the book and will the resale of the book be counted in the rankings. I think the latter is more important than the former.

    • Nobody knows the answer to either of these questions yet. ReDigi is planning to share the revenue with publishers (and publishers would, presumably, then share it with authors). Amazon hasn’t said what they plan to do. Same for rankings, although I suspect Amazon would treat rankings the same way they do the sale of used print books.

  8. Of course they’re are opportunities like anything. But challenges too. Right now the publishing world is insane. Everybody is throwing a million different business models into the mix and I feel like eBooks are the red headed step child of paper books.

    This used eBook/music, etc. thing is just another thing to hype. Amazon and Apple’s patents are reactionary. Just because they file patents doesn’t mean they intend to do anything about it. I would be very surprised if Apple offers used digital media: it will drive down the price of their “new” digital media. There’s no escaping this. Consumers are fickle. They will wait to buy digital resales for 1/3 the price. Then sellers will start lowering the price of the “new” digital content to compete. Apple doesn’t want this to happen.

    I can see Amazon dabbling in this though, but again, it’ll drive down the price of new digital media in the way I just mentioned. This isn’t good for the creators. Steve Jobs once said that Apple wanted to make it worth it to creators to actually create content. The more you drive down prices, the less interested people are going to be to create and sell things, and then you have the content drain happening.

    You can make the argument that you see more sales of author’s books with cheap resales. But that’s not clear. All that’s clear is a drop in pricing and more fickle consumers who already expect something for nothing.

    And when used digital hits, everybody is going to jump on this. All eBookstores will have these options for their customers to resell. It won’t be resigned to just Apple or Amazon.

    As for repurposing the content and selling it for more, I find this suspect. I don’t think people want your eBook full of all of your junk, just like people don’t want to buy used books full of notes in the margin. Those are your notes. Your ideas. They don’t mean much to anyone else.

    For me, creators deserve to get paid, not get victimized by every new business model and controlling platform that comes along in the publishing industry.

    I’m taking all of this with a grain of salt. In the end, people want quality content and a good reading experience. And creators need to make money. This can’t be stressed enough.

  9. I’m sorry, but the notion that this won’t be cannibalistic is completely naive. First of all, the distinction between a “used” eBook and a “new” eBook is nonsense– they are identical files and, thus, perfect substitutes for each other. Given the choice between a “new” eBook and “used” one, the buyer would rationally pick the cheaper (i.e., the used) one every time.

    Of course, this also happens in the print book market, but in that case
    there is market segmentation because the used book buyer receives a product that
    is obviously inferior. Authors and publishers don’t love used books, but it’s something they can live with because it’s never emerged as a serious competitor to the new book market. In the educational market, print textbooks are priced so high specifically because publishers know there is a used book market, so students can buy knowing there is resale value.

    If consumers were allowed to “resell” their eBooks, there will be more sellers, and thus more supply, of an eBook. Publishers already take a significant haircut in eBook revenue vs. print revenue, in part because of reduced costs (although the marginal costs of printing, shipping, etc are in fact minimal) but largely because the consumer has no ability to lend or resell the product.

  10. Not sure your example works. That person who writes the “cliff notes” summary and attaches it to the ebook can resell the used ebook – ONCE. If it took them only 5 hours to write that 20 page summary, they’re going to need to resell it for what, $40 more just to make minimum wage? It’s simply not going to happen.

    Publishers reselling such a work, with a value add, are not selling used ebooks – they’re selling a new edition. And they’ll have to get a new contract with the original writer, most likely. Which will cost them more money. That could happen – heck, does happen now, has happened with print for ages. You see plenty of second editions with new material.

    But it’s not used ebooks.

    Publishers probably can’t sell used ebooks, because they’re not in a position to strip the titles from the consumer’s account at the retailer. Amazon, Apple, B&N, Kobo, and other ebook retailers can do this. Publishers cannot.

    Even if publishers made an arrangement with Amazon to buy back Amazon ebooks on the publisher’s website, WHY would they do this? They can resell the used ebooks. But they already have an unlimited license to sell copies of the ebook at the regular retail price. Every ebook they bought back and resold would be a net loss to them. And while yes, they might be able to get someone to buy Seth Godin’s personal copy of a marketing guide, complete with all his notes – all they could do is sell it ONCE. They don’t own the rights to Godin’s notes; they just own a license for that one copy, unless they make a contract with Godin for more than that…and then we’re right back at what I was discussing above.

    The bottom line is that used ebooks will have a negative value for publishers. They will hurt income. They will reduce the profits from ebooks, especially from major bestsellers (as those will be the ones with the most used copies circulating).

    One reason why multiple fiction publishers (including my own company) are working the serial angle is because serials are much less impacted by the used phenomenon. When your audience wants the next section of the serial NOW, not a week from now when people resell it, then you have a good chance to make large sales. But when people know that there will be thousands of copies of that new $14.99 ebook by Stephen King available for $5 or so in a couple of weeks, they’ll be much more inclined to wait.

    In the past, used book sales had little impact on front list sales, because a) people waited MUCH longer to resell print books, often doing so in batches every few years and b) the list of used print books available from any bookstore was limited, so you had no guarantees of getting any given book.

    With ebooks, both of these features will go away. A few button clicks, and the novel you just finished is sold back to Amazon or uploaded to their marketplace or whatever. A few more button clicks, and you’ll be able to surf the list of every used ebook available worldwide from the world’s largest retailer of ebooks. Used print books had no serious negative impact on print sales. But used ebooks will be game changing. They will have such a negative impact that they will very likely change what is considered publishable, as well as how books themselves are brought to the market.

    • I’m not sure you read far enough into the original article to see where I said this:

      “What if that reader isn’t just able to sell the one copy they bought, but an unlimited number of copies that come bundled with their summary?”

      So yes, I’m suggesting the summary creator will be able to sell their version multiple times.

      Also, yes, no publisher has this capability today. I’m suggesting they build it themselves though, rather than wait for a retailer to do it for them (and further extend the publisher’s reliance on retailers).

  11. I like the possibilities you are suggesting. It feels like the original ebook is the platform on which value-added content morphs it into a wiki of sorts. The benefit being micro payments for all along the way. 

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