0

By Chris Meadows

Ars Technica has a two-page article that looks at the problems digital media (such as mp3s, computer games, and—yes—e-books) pose for a resale market.

First Sale, Then What?

A hundred years ago, a publisher attempted to put a notice on a book dictating terms under which it could be resold. One might almost call it the first-ever “End-User Licensing Agreement” (EULA). The courts declared this notice unenforceable, thus giving birth to the “Doctrine of First Sale”: once you buy a book or movie or anything else, you have the right to resell it however you like (as long as you don’t violate any other laws, of course). In other words, the publisher can only control the “first sale,” not all the ones that come afterward.

The problem with this doctrine is that it assumes you are dealing with physical items—items that, if you sell, you no longer have yourself. Digital media present a problem in this respect, however: if you send your mp3 file to someone else, you will still have that mp3 file on your computer.

“Selling” your mp3, then, largely becomes a matter of trusting that you will delete the file from your hard drive as soon as you have “sold” it—something that publishers would be foolish to do now that people are becoming increasingly blasé about intellectual property rights.

Bop a what?

This hasn’t stopped someone from trying, however. A start-up with the unlikely name of “Bopaboo” is attempting to set itself up as a resale site for mp3s. The problem is that selling the mp3 requires it to be uploaded to the site (thus making a copy) and downloaded again (thus making another copy). And making copies is not covered by the First Sale Doctrine.

To try to get around this, Bopaboo is attempting the novel approach of courting music publishers, offering them a cut of its sales (something that publishers do not usually get for resales of other media) in exchange for permission to continue operating.

This is possible for Bopaboo, of course, because there are so few music publishers (record labels) with whom to negotiate. It is doubtful it would work for, say, e-books, given how many different book publishers there are. (Though, on the other hand, one could draw parallels between this and Google’s recent settlement with the Author’s Guild.)

As the article points out, another problem with used sales of digital media is that digital media do not degrade with use. A paper book will become increasingly worn with each use until it is eventually no longer salable. Even a DVD or CD will get scratched up. But a digital file is still the same bit-for-bit file the tenth time it changes hands as the first. If resale was possible, a digital file could be resold infinitely.

Objectionable Initials: EULAs & DRM

Publishers traditionally do not like resale markets because they do not get a cut of the sale. Especially in the computer software industry, where business software can cost into the hundreds of dollars per box, publishers feel they have a vested interest in eliminating the sale of used or unopened software, via EULAs and DRM (Digital Rights Management) to disallow resale or make the software useless to a would-be buyer.

EULAs have a mixed record of enforcement in the courts, though most cases that seem to strike them down do not actually speak to the enforceability of EULAs so much as whether the EULAs can actually have been considered agreed to in a given circumstance. As for DRM, it has been showing up more and more often—especially in computer games such as Spore.

It’s one of the side "benefits" of using DRM. While DRM has never done much to keep movies, music, or games out of the hands of warez sites and torrent search engines, it can work surprisingly well to limit the secondary market for products. Once a product has been ripped, camcorded, or cracked, pirates can swap it easily and millions of times. With users who try to stay legal and sell only used copies of games, music, and movies that they have purchased, the DRM scheme needs to be bypassed in each case, by each user. It also makes criminals of those who do break the DRM in order to sell their files.

While some companies are relatively lax about reactivating DRM-locked software, the practice of using harsh restrictive measures only seems to be becoming more prevalent.

The E-book Angle

Although the Ars article does not specifically address e-books, being focused largely on mp3s and computer software, the fact still remains that the inability to resell an e-book has long been cited as one of the disadvantages of the medium, and must be taken into consideration along with e-books’ other disadvantages and weighted against their advantages.

It might be possible for an e-book service to use some kind of DRM to enforce trust by nullifying someone’s right to read the e-book file on his hard drive if he has “sold” it to someone else—but this would face the same problem as e-book “libraries” that rely on DRM to “check in” a book from a library patron so it can be “checked out” to another one. If a patron chooses to crack the DRM, the book is his to keep even after he’s “passed it on” to someone else.

Part of the cost of adopting digital media may simply be accepting that the old resale rights simply cannot apply the same way in a digital world—and perhaps this inability to resell should be factored into the price of digital media as opposed to physical media.

 
0