What would you pay for used MP3s and e-books?

Companies like Amazon and ReDigi are opening up an electronic marketplace for reselling digital purchases.
Written by Janet Fang, Contributor

Unlike paperback novels and wood furniture, digital objects never lose their good-as-new luster. Now, companies like Amazon and ReDigi are making it easier for us to hold virtual yard sales. New Scientist reports.

It’s been tricky setting up a second-hand market for digital purchases because, well, did we actually own them in the first place? But just last year, the European Union ruled that software vendors cannot stop customers from reselling their products.

Now there’s an Amazon patent for a system to support reselling digital goods. Customers keep their purchases -- such as e-books or music -- in a personal data store in the cloud only they can access. They resell previous purchases by passing access rights to another person, and once the transaction is complete, the seller loses access to the content.

Boston-based ReDigi has been running a resale market since 2011. Users upload items to ReDigi's servers to be bought and downloaded by someone else. A song that costs 99 cents new on iTunes, for example, might cost only 49 cents.

Digital items on ReDigi are cheaper because they are one-offs. If your hard drive crashes and you lose your iTunes collection you can download it again. But you can only download an item from ReDigi once – there is no other copy. That is the trade-off that makes a second-hand digital market work: the risk justifies the price.

Of course, these systems have to make sure the files aren’t duplicated in the transaction. That means deleting any copies the seller may have lying around on hard drives, e-book readers, and other cloud services -- since that would violate copyright.

It could be good for business too if the original vendors were to support resale and take a cut of the resell price. Microsoft’s new Xbox, for example, isn’t expected to work with second-hand games. But with Amazon's weight behind this, "the industry is waking up,” says ReDigi founder John Ossenmacher.

[New Scientist]

Image by Eastlaketimes via Flickr

This post was originally published on Smartplanet.com

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