No discounting secondhand digital markets

Very recently Apple and Amazon, respectively, filed and was granted patents on processes that create secondhand markets for digital content within their ecosystems.

The commentary since has focused on what this may mean for rights owner revenues. The assumption seems to be that secondhand digital goods will sell for less than their "new" counterparts, negatively impacting revenue.

The underlying hypothesis is wrong, for several reasons:

  1. Unlike physical goods secondhand digital goods don't degrade in quality.
  2. Being infinitely new, objects should be priced accordingly

The secondhand digital market is the greatest opportunity for rights owners I've seen during my 15+ years in the entertainment industry (music, media publishing and book publishing).

For the first time publishers can capture revenue from sales that until now were out of their reach.

Unfortunately, the music industry is already shutting down a buyer's right to resell digital goods? Another way of looking at the linked case of Capitol v. ReDigi is that the music industry is looking to prevent competition to streaming services such as Spotify.

So not only will there be no discounting in secondhand digital markets, it looks like there won't be a market at all.

RobC

RobC

Marketing. Tech. Tunes. Words. Don't believe everything you think.

Read More