Used Digital Record Shop ReDigi Can Stay Open, for now

District Judge Richard J. Sullivan said not so fast to Capital Records by denying their request to shut down start-up and pre-owned digital music site/shop ReDigi.

As reported by Ars Technica, ReDigi's founder John Ossenmacher had this to say to Capital Records:

“We hope Capitol can get back to their business and find a way to catch up to the times instead of trying to stop the innovation process, denying rights to their paying customers along the way”.
You can read the original complaint from Capital Records which was kind enough to allow ReDigi to just fold up their virtual tent and pay Capital $150,000 per track for material they deemed to be infringing on copyrighted material. You can go here for more on this story which touches on the important issue of the First Sale Doctrine as it applies to "digital phonorecords" which essentially gives us the right to sell our lawfully obtained copy. Or does it?

For more on the First Sale Doctrine as it applies to digital music files, see Duke University's "THE FIRST SALE DOCTRINE AND DIGITAL PHONORECORDS" where the author, Bob Hyde, argues that you can't really buy a digital phonorecord you really just lease it (kind of like beer?). Which also means he feels you cannot legally sell a digital phonorecord.

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jazzfan's picture
Paradigm shift

As I keep repeating, in fact repeating so often that I'm beginning to sound like a broken record, the wide spread use of digital media has created a paradigm shift in the way media is consumed. The media companies along with their political allies (whom the media companies pay very good money for) are trying to enforce copyright laws written for analog (for lack of a better word) media. This will never work.

Why does the concept of re-selling digital media in the form of a computer file strike so many people as not quite right and yet reselling digital media in a physical form, e.g. a DVD or CD, not raise the same red flag? After all I can very easily copy the contents of a DVD or CD and then sell the original disk. Furthermore the copy I make will be, for all intents and purposes, identical to the original disk. If the law allows one to resell digital media in its physical form then why not allow one to resell digital media in its "file" form?

Digital media needs new copyright laws which better reflect the new and unique properties of the media.

deckeda's picture
Hey, I'd lease beer!

I mean really now, why buy if the taste is the same? It's not as if I want to keep it.

 

Michael I was thisclose to emailing you the link to the ars story but I'm clearly late to the game. (For those unfamiliar, ars technica has been doing some bulldog reporting on tech policy and digital copyright issues, with a decidedly consumer-friendly stance for some time now.)

Did everyone see the nugget there about how ReDigi claims to remove transferred songs from the original owener's "iTunes account." That was the main curiosity about their business model for ensuring security. The blog comments are all buzzing about that, what it means, or what it does not. Here's mine.

My view is (further) that if ReDigi gets cornered into having to guarantee a file's provenance and protection (a position they seem to embrace) they will lose, either because they won't ever adequately convince or it's patently impossible.

The trial judge will have to be convinced ReDigi has taken adequate measures (a different, softer requirment, but a fair one IMO) in order to quell plaintiff's stated complaints.

In other words, there's absolutely NOTHING that prevents an iTunes or Amazon buyer from copying/distributing illegally, which makes those delivery mechanisms as culpable as anything ReDigi does. The difference of course ... is that iTunes and Amazon pay the labels something, and money is what they really want, not true protection of content.

ReDigi challenges all of that on the face of it, because just like the used CD store, labels get zero. I really hope the trial judge has some common sense here, assuming of course ReDigi isn't just blowing smoke.

Michael Lavorgna's picture
The record companies are trying to kill this market...

...before it starts by making it illegal to re-sell downloaded music.

Of course a large chunk of their business is moving to downloads and this notion that you can't resell the music you buy is obviously a very different scenario from CDs and LPs which retain a % of their original value (some actually increase in value over time) on the used market. And it's perfectly legal to sell your old CDs and LPs.

So...If we do not own the downloaded music we legally purchase, why is it priced the same as a CD or LP? Shouldn't we be seeing a drastic reduction in the price of downloaded music roughly equivalent to the value we lose by not having ownership rights to it?

jazzfan's picture
Sense

So...If we do not own the downloaded music we legally purchase, why is it priced the "same as a CD or LP? Shouldn't we be seeing a drastic reduction in the price of downloaded music roughly equivalent to the value we lose by not having ownership rights to it?"

Michael,

You are making way too much sense with the statement quoted above. Check out this op-ed piece in today's New York Times for a story closely related to this one and also check out the comments section. They seem to running about 10 to 1 against the RIAAA and their nonsense.

http://www.nytimes.com/2012/02/08/opinion/what-wikipedia-wont-tell-you.h...

Michael Lavorgna's picture
This Op-Ed has been brought to you by

Cary H. Sherman is chief executive of the Recording Industry Association of America, which represents music labels.

Cary H. Sherman appears to have a different relationship to facts and the truth than I do. I'd suggest this article from the Economist for a less financially-vested whine even though it's somewhat dated.

Michael Lavorgna's picture
And...

Here's a scathing indictment of Cary Sherman's Co-Opted-Ed point by point.

deckeda's picture
Not just music/video, but games, too.

I'm not a gamer but have read of similar efforts by video game publishers to squelch sales of used video games. Sometimes it's onerous DRM or membership that requires "activation" or making life harder for retailers who offer used product.

Michael Lavorgna's picture
How Copyright Industries Con Congress

Here's another interesting and thought-provoking angle on this subject by Julian Sanchez from the Cato Institute titled, “How Copyright Industries Con Congress”.  Sanchez tracks down the origins of the oft-repeated effects of filesharing and piracy.

For example:

"The movie and music recording industry have gotten away with using statistics that don’t stand up to the most minimal scrutiny, over and over, for years, to hoodwink both Congress and the general public. Wherever you come down on any particular piece of legislation, this is not how policy should get made in a democracy, and it’s high time they were shamed into cutting it out."

"Intellectual property infringement was supposedly costing the U.S. economy $200–250 billion per year, and had killed 750,000 American jobs. That certainly sounded dire, but those numbers looked suspiciously high, and I was having trouble figuring out exactly where they had originated. I did finally run them down, and wrote up the results of my investigation in a long piece for Ars. Read the whole thing for the full, farcical story, but here’s the upshot: The $200–250 billion number had originated in a 1991 sidebar in Forbes, but it was not a measurement of the cost of “piracy” to the U.S. economy. It was an unsourced estimate of the total size of the global market in counterfeit goods. Beyond the obvious fact that these numbers are decades old, counterfeiting of physical goods imported in bulk and sold by domestic retail distributors is, rather obviously, a totally different phenomenon with different policy implications from the problem of illicit individual consumer downloads of movies, music, and software. The 750,000 jobs number had originated in a 1986 speech (yes, 1986) by the secretary of commerce estimating that counterfeiting could cost the United States “anywhere from 130,000 to 750,000″ jobs. Nobody in the Commerce Department was able to identify where those figures had come from."

jazzfan's picture
Are you sure...

Michael,

I just have to ask: are you sure that you are an audio writer? It seems to me that you express views and opinions closer to the average objectivist audiophile rather than those of the average subjectivist audio writer. For example bashing on the music industry instead of defending them. Next you'll be writing how even run of the mill USB and ethernet cables sound the same as all those over priced boutique cables. PLEASE don't do this - I really like AudioStream and don't want you to get the powers that be too upset which might lead to them replacing you with someone who tows the party line.

Michael Lavorgna's picture
Last I checked

But I won’t take a stand on either side of a false dichotomy that I didn’t get to make up.

;-)

Pablo's picture
Jazzfan

This why I aprecciate this blog of Michael Lavorgna, he is a no BS blogger and this is seriously lacking on our audiophool community. So please keep it going.

deckeda's picture
Labels want it both ways

You're gonna love this one.

 

Debra SledgeJoan SledgeKathy Sledge LightfootKim Sledge Allen and Ronee Blakely filed suit in federal court in San Francisco on Thursday claiming that the music giant's method for calcluating digital music purchases as "sales" rather than "licenses" on songs such as the band's chart-topping "We Are Family" cheats artists out of money due to them under recording contracts, many of them signed decades before music was sold digitally via iTunes, Amazon, ringtones and other outlets.

"Rather than paying its recording artists and producers the percentage of net receipts it received--and continues to receive--from digital content providers for 'licenses,' Warner wrongfully treats each digital download as a 'sale' of a physical phonorecord...which are governed by much lower royalty provisions than 'licenses' in Warner's standard recording agreements."

If that claim sounds familiar, it's one of the most hotly-disputed issues in the music business. Songwriters typically make much less money when an album is "sold" than they do when their music is "licensed" (the rationale derives from the costs that used to be associated with the physical production of records). But record labels have taken the position that music sold via such digital stores as iTunes should be counted as "sales" rather than licenses.

 

Are ya seeing this, ReDigi lawyers? It's like a freakin' Fair Doctrine gift laid right in your laps.

Michael Lavorgna's picture
Priceless

Songwriters typically make much less money when an album is "sold" than they do when their music is "licensed" (the rationale derives from the costs that used to be associated with the physical production of records). But record labels have taken the position that music sold via such digital stores as iTunes should be counted as "sales" rather than licenses.

And

Eminem's publisher brought a nearly identical claim against Universal Music Group and won a fairly important decision at the 9th Circuit Court of Appeals in 2010 (the Supreme Court declined to hear an appeal). The 9th Circuit ruled that iTunes' contract unambiguously provided that the music was licensed.

I thought it was worth highlighting the contradiction in a one place.

So…when it comes to paying artists, the music industry takes one position and when it comes to getting paid by consumers they take another. And both equate to more money in the pockets of the people that have nothing to do with the actual making of the music. Nice.

deckeda's picture
oops, nevermind

The 9th Circuit ruled that [Eminem's] iTunes' contract unambiguously provided that the music was licensed. 

 

Sorry, didn't read that before posting above. Apparently the contracts ARE setup as licenses, not sales, but that the labels don't treat them that way until sued to do so by artists. Makes perfect sense, now.