Secondhand MP3 Dealer Redigi Expanding Into Europe... And Tangling With A Whole New Set Of IP Laws

from the used-'licenses,'-anyone? dept

Thu, Jan 24th 2013 11:04pm — Tim Cushing

Redigi, the 'used' mp3 dealer, is now sending out invites for its expansion into Europe. While many may question how big the market is for secondhand mp3s, Redigi obviously feels there's more money to made overseas.

In the US, Redigi is operating in the shadow of a lawsuit filed by the RIAA (with EMI/Capitol Records taking the lead). The RIAA wanted the company shut down, but the presiding judge refused to grant the injunction, citing concerns about the right of first sale, as well as a lack of "irreparable harm," as claimed by EMI. However, he did note that EMI's arguments were "compelling," which likely means that sooner or later, the RIAA will get its way. (The outcome of Kirtsaeng vs. Wiley will also have some impact this lawsuit, should it reach its conclusion first.)

Over in Europe, Redigi is relying on a ruling against Oracle (who was taking on UsedSoft, a software reseller), which claimed its software couldn't be resold. "Copyright exhaustion" is the key here -- a concept related to the right of first sale -- meaning the copyright holder's control ends once the sale is made. More importantly, the European court declared that the software could be sold even if Oracle's contract with the end user prohibits resale.

Obviously, this doesn't sit well with many rights holders. As we're all too aware, when we buy a digital good, we're usually exchanging our money for a license, rather than something we can resell or transfer or even move from computer to computer. These licenses allow the control to remain with the copyright holder (or the retailer/distributor) for long after the famous "first sale." As Redigi's CEO points out, if you block the customers' right of first sale, then they have vastly overpaid for these licenses.

[M]ost lawful users of music and books have hundreds of dollars of lawfully obtained things on their computers and right now the value of that is zero dollars.

Whether or not Redigi will be successful in Europe remains to be seen, but its business model is applying pressure to rights holders and their representatives to define more clearly what they feel customers are entitled to when they purchase a license disguised as a digital download.

Oh, and Redigi's CEO mentions books for a reason. The company is hoping to expand its current offerings from mp3s to ebooks... and video games. Rolling up on Amazon and re-triggering the AAA game developers' distaste for the secondhand market means things could get interesting in a hurry.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: copyright, europe, first sale, mp3s, secondhand sales, used mp3s
Companies: redigi

26 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Anonymous Coward, 24 Jan 2013 @ 11:51pm

While he doesnt realize it, this guy is setting up a future scenario where all for-sale digital content ends up being watermarked.
[ link to this | view in chronology ]
- That One Guy (profile), 25 Jan 2013 @ 1:31am
  
  Re:
  ...and the spread of DRM-stripping programs becomes even more widespread.
  [ link to this | view in chronology ]
  - Anonymous Coward, 25 Jan 2013 @ 9:30am
    
    Re: Re:
    The watermarking won't be in the form of your hated DRM...
    [ link to this | view in chronology ]
    - That One Guy (profile), 25 Jan 2013 @ 12:52pm
      
      Re: Re: Re:
      If it affect's people's ability to do what they want with what they purchased, do you really think they'll care? It'll be treated just the same.
      [ link to this | view in chronology ]
      - Anonymous Coward, 26 Jan 2013 @ 3:12am
        
        Re: Re: Re: Re:
        whoosh
        [ link to this | view in chronology ]
Anonymous Coward, 25 Jan 2013 @ 12:18am

The idea of buying something and not being able to resell it is fucking absurd. If I pay for something I am going to do with it as I please. Which may or may not include making personal rips,uploading to my personal storage, and yes even selling if I find it to be something I don't want to listen to anymore.

All their ideas do is promote piracy even more...
[ link to this | view in chronology ]
Anonymous Coward, 25 Jan 2013 @ 12:45am

Imagine if ford or Chrysler or whirlpool thought this way about their products.
[ link to this | view in chronology ]
Anonymous Coward, 25 Jan 2013 @ 12:47am

Imagine if ford or Chrysler or whirlpool thought this way about their products.
[ link to this | view in chronology ]
- Anonymous Coward, 25 Jan 2013 @ 4:35am
  
  Re:
  And what makes you think they don't? As it is, some homebuilders are now writing into their sales agreements provisions for getting paid *every time* the house changes hands down the road. You think car and appliance builders aren't watching this stuff?
  [ link to this | view in chronology ]
  - btrussell (profile), 25 Jan 2013 @ 6:06am
    
    Re: Re:
    I want paid every time a door swings. If you will be having guests or is built where others may see it, you will need to pay more.
    [ link to this | view in chronology ]
Anonymous Coward, 25 Jan 2013 @ 12:56am

[M]ost lawful users of music and books have hundreds of dollars of lawfully obtained things on their computers and right now the value of that is zero dollars.

Yet according to RIAA:
Pirates have zero of dollars of unlawfully obtained things on their computers and right now th value of that is hundredthousands of dollars.
[ link to this | view in chronology ]
- That One Guy (profile), 25 Jan 2013 @ 1:29am
  
  Re:
  An interesting contrast in the legal vs. piracy system:
  
  Legal: Pay hundreds, collection is worth nothing.
  Piracy: Pay nothing, collection is worth millions(just not to you).
  [ link to this | view in chronology ]
  - Anonymous Coward, 25 Jan 2013 @ 2:30am
    
    Re: Re:
    MY GOD! It's almost as if some consider it a zero-sum game!
    
    Inconceivable!
    [ link to this | view in chronology ]
    - Not an Electronic Rodent (profile), 25 Jan 2013 @ 6:04am
      
      Re: Re: Re:
      Inconceivable!
      You keep using that word... I do not think it means what you think it means.
      /dodgy spanish accent
      [ link to this | view in chronology ]
      - Jeff (profile), 25 Jan 2013 @ 6:49am
        
        Re: Re: Re: Re:
        prepare to die!
        [ link to this | view in chronology ]
Mr Claypole, 25 Jan 2013 @ 2:58am

From a publisher's perspective
I write and publish ebooks and audio samples - no DRM, customers have free unlimted re-downloads if they lose their books (unlike the case with paper books!), free content updates to the ebooks they bought, free 1-2-1 support direct from the author, much lower price compared to what we'd charge for a paper copy etc. I also don't have a problem if a customer wants to 'sell' their book when they've finished with it.

Of course unlike a 'paper' book, which once sold is no longer in possession of the seller, ebooks can simply be easily and identically copied and kept. They can be 'resold' infinite amounts of time by the same person. This then becomes a commercial venture - I've already seen this on Ebay with a couple of my ebooks ('Buy it now - more than 10 available').

So I am definitely concerned about open season on people just making digital copies of my book and reselling it en masse. I mean, I completely accept file sharing - I don't see it as competition or 'lost sales', it's just a bunch of people sharing books with each other with no money changing hands.

However selling more than the one copy originally purchased is a different matter, it's a step too far, and unlike file sharing, is most definitely a lost sale IMO, they are in direct competition, commercially selling my work without my permission and without the legal rights to do so. Selling a single 'second hand' copy - fine, but how do they propose to stop people turning this into a commercial venture? Do sites like redigi require evidence of original purchase?
[ link to this | view in chronology ]
- Anonymous Coward, 25 Jan 2013 @ 5:52am
  
  Re: From a publisher's perspective
  I'm confused by your post. You allow your paying customers to download unlimited DRM-free copies of the works they buy from you, and you allow them to resell the works when they are done... but it's "too far" when they sell more than one copy? You're also okay with them distributing the files for free ("costing" you even more "sales"), but when money changes hands that makes it bad?
  [ link to this | view in chronology ]
  - Mr Claypole, 25 Jan 2013 @ 7:08am
    
    Re: Re: From a publisher's perspective
    Don't be confused, just read my post properly and you'll see I don't believe file sharing costs me sales. I also don't care if someones take the opportunity to 'sell' their single copy of my book that they bought from me - one time sale being the key. Much like someone may wish to transfer the license of software they own or how they would sell a paperback after reading it.
    
    My concern is when this is scaled up and someone decides to just keep on selling that book by continually making copies, selling it thousands of times. I do see this as lost sales, as this has moved to large scale commercial infringement - this is not fluffy file sharing, where most files are downloaded by people who have no intention of purchasing in the first place.
    
    With tangible goods, once you've sold something, it's no longer in your possession. Not so with digital goods, so IMO the law has to recognise that - certainly in this instance with the business model redigi is adopting.
    [ link to this | view in chronology ]
    - Don Schneider, 27 Jan 2013 @ 8:02am
      
      Re: Re: Re: From a publisher's perspective
      You'll see, if you read about the US launch of ReDigi, that they are a tech-centric company and they have gone to great lengths to explain how their technology works. In a nutshell, ReDigi verifies that the digital thing you are selling is indeed yours, legally purchased by you. Then, when you sell it, it scans all of your devices ongoing to make sure you have not kept a copy for yourself. I think they have worked out the concerns you present.
      [ link to this | view in chronology ]
  - nasch (profile), 25 Jan 2013 @ 7:26am
    
    Re: Re: From a publisher's perspective
    It's an understandable reaction, though an emotional one. Putting it on a file sharing network is spreading something you enjoyed to others, while reselling copies of it is trying to make a buck off someone else's work. If I were in that situation, I would encourage people unwilling to pay me for the work to just get it for free. There's no reason to pay a third party for it.
    [ link to this | view in chronology ]
Josef Anvil (profile), 25 Jan 2013 @ 3:55am

But..but..but.. it's the same
If copyright is the SAME as a property right, then why should digital sales be any different than physical sales?

Given that infringement is often called theft and that copyright is "definitely" property, there should be no argument about the first sale doctrine among the trolls.
[ link to this | view in chronology ]
- That One Guy (profile), 25 Jan 2013 @ 4:33am
  
  Re: But..but..but.. it's the same
  Oh they only consider it 'property' when it comes to the seller/original owner's rights, as soon as it's been sold suddenly it's nothing more than 'licensing', even as they claim the previous 'property' rights are still in effect.
  
  Very much a case of wanting to have their cake and eat it too.
  [ link to this | view in chronology ]
gorehound (profile), 25 Jan 2013 @ 5:02am

And what do you think a bunch of Digital Files are worth to a Collector ?
Answer: NOTHING !

Now, what if those files are on an OOP Piece of Vinyl ?
Answer: Tons and tons of Cash.

Same thing for Physical Books, ETC.

I am a Collector and do own a Ton of Rare Books.All will be in my Will to my Son.
Over 16 Grand in Rare Books in my Library.
[ link to this | view in chronology ]
- Anonymous Coward, 25 Jan 2013 @ 5:59am
  
  Re:
  gosh, you're so PUNK!
  [ link to this | view in chronology ]
I forgot, 25 Jan 2013 @ 8:37am

Planet Earth
It is extremely wasteful of this planet's limited resources to block the purchaser's first sale of anything. Let the companies that are attempting to block these sales be totally responsible for the collection and salvage of precious resources contained in these devices and recycling the rest. This is as frustrating as sitting alone for 3 minutes at an intersection, car idling, waiting for the light to change. There has to be a way to make the system more receptive to change for the ~better rather than all this lining of the pockets of those who waste our resources endlessly.
[ link to this | view in chronology ]
- nasch (profile), 25 Jan 2013 @ 10:51am
  
  Re: Planet Earth
  It is extremely wasteful of this planet's limited resources to block the purchaser's first sale of anything.
  
  We're talking about digital files; no measurable amount of resources are wasted.
  [ link to this | view in chronology ]