'Used' media markets could hinge on publisher reactions

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A recently uncovered pair of patent filings from two to the industry's largest music and video retailers could trigger a seismic shift in the way we buy and sell music online.

Both Apple and Amazon have filed for patents on second hand digital media services. In essence, the stores would allow users to buy and sell the DRM rights for content, transferring those rights to another device and removing them from their own.

The benefit for users is obvious, customers could save costs by buying used and recoup some of their purchases by reselling. The stores, meanwhile, are able to collect a higher margin on transactions of used items - though that could change with the revenue models Apple and Amazon use for their stores.

The publishers and studios, however, are not as fond of used sales, for obvious reasons. As they have already sold the media once, they are unable to get a second cut of sales and lose money when customers forgo new content for used copies.

As such, studios, labels and publishers come up with a variety of ways to keep users buying new content. Be it with new formats, special edition releases of popular titles and other methods, they've sought to minimise the value of used content.

Any university student who has had to purchase textbooks knows of these tricks. Publishers will come out with new editions of textbooks every year in order to thwart the market for used books. Often these new editions don't add much content, only enough to change page numbers and layouts enough to alter a course syllabus and lesson plan to the point where professors and bookstores have no choice but to abandon the old editions which are available used.

Will there be a similar reaction should Amazon and Apple succeed in opening their "used" digital content services? Will the publishers seek to strike a royalty model which gives them another cut of the resale profits, or will they simply take to the courts to block these services from ever seeing the light of day?

09 Mar 2013

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