Over the past few weeks we’ve seen some landmark decisions on whether you really own that content you bought and if you can resell it. First, in the Kirtsaeng vs. Wiley case we learned that it’s OK to buy low-priced print books from overseas, ship them to the U.S. and resell them for a profit. That’s a victory for the middleman entrepreneur and everyone frustrated with high-priced textbooks. Well, it’s a victory till publishers raise their overseas prices to be more in line with U.S. prices, at which point students in those foreign countries lose.
Next, we have the federal ruling against ReDigi on the digital content resale front. I’m hoping ReDigi appeals but for now this means you can’t sell your iTunes library, for example. That ruling is considered a victory for labels (and publishers as ReDigi is looking to move into used ebook sales) and a loss for consumers.
The simple rule appears to be you can buy your physical product from anywhere and resell it to anyone but your digital products are really only licensed to you and you can’t even resell that license. Now let’s add Amazon’s AutoRip serviceto the discussion to see how it further complicates things and the dangerous precedent it sets.
If you’re not familiar with AutoRip, it’s a nifty way for consumers to get the digital version of CDs or albums they’ve bought from Amazon. It addresses the issue everyone has experienced at least once in their life: you bought the album so why can’t you have the CD, cassette or MP3 version free? Not all tracks are AutoRip-eligible on Amazon; presumably Amazon got permission from the labels for AutoRip-eligible songs.
So what happens if I buy a CD from Amazon, get all the tracks into AutoRip and then sell the CD to someone else? Maybe I’ll sell it via Amazon’s own Marketplace service. I get to keep all the songs I originally bought, still in AutoRip, and I’ve paid far less for them than I probably could have in any physical or digital format. Victory for the consumer! Maybe the labels participating in AutoRip still haven’t figured out most people are ripping CDs on their own and then reselling them. By participating in AutoRip they’ve helped the consumer avoid the ripping step and are further encouraging resale of that physical CD. A resale, I might add, that the label gets zero revenue from. At least with ReDigi the labels were able to participate in the resale revenue stream.
Now let’s consider the dangerous precedent this sets. What exactly is the value of the digital content from the consumer’s point of view? In the scenario above it’s the price the consumer paid after netting their original CD purchase with whatever they earn on the resale of the CD. IOW, the perceived value of the content is pretty low.
What happens when AutoRip is extended into books? Buy a print book today and get the Kindle edition free. In fact, Amazon could easily give you a free Kindle edition of every print book you’ve ever bought from them, including ones you sold to your local used bookstore years ago. Again, a victory for the consumer. But doesn’t that further erode the value the consumer places on the digital content? The ebook basically becomes a free item tossed into the deal long after you made the purchase decision. It’s like floor mats for the new car.
What worries me most about this model though is how it once again keeps publishers away from establishing a direct relationship with their customers. If you really want to give the consumer a free ebook version of the print book they bought, why not bring them to your own site and get to know them? The answer to that question, of course, is publishers would have to give up DRM to provide the free ebook. So once again, we have DRM being a tool used against publishers and their ability to create a direct channel with their customers. What a shame.