What Is Your Digital Music Library Worth? The Pending ReDigi Case

ReDigi, "The Pre-Owned Digital Marketplace" is being sued buy EMI for copyright infringement. In its claim against ReDigi, EMI is asking for $150,000 for each song from the EMI catalog that they claim ReDigi re-sold illegally. At the heart of this case lies a very important question whose answer will turn your downloaded digital music library into an asset similar to your record or CD collection or it will turn it into a worthless bunch of bits in terms of resale value. This begs the question—why do record labels expect consumers to pay ownership rates for something we do not have ownership rights to?

The ReDigi business model is fairly straight-forward—their software supposedly verifies that your music was in fact downloaded legally from the iTunes Store and it also removes any copy of a song you sell through their service from your computer thus eliminating the possibility of selling something you still own. I'm not sure how ReDigi can avoid the very simple work-around of someone copying their entire music library to an external hard drive and then removing that drive from the equation during the ReDigi resale process and then connecting it back up once they're done. But I am on ReDigig's side in theory and the main reason is for those consumer's who have been paying for their downloads, they've been paying ownership rates and the record labels have let people assume they own the songs they buy right up until the time and opportunity arose when they could re-sell them.

What's more, in the case of iTunes, music buyers have been encouraged to make copies of songs for their iPhones/iPods implying ownership rights and this suited everyone just fine as long as money flowed in one direction, from consumers to Apple and the record labels. Now, when consumers would like to resell some of the music they no longer want and get a small return on their original purchase, EMI is crying foul.

From a BBC article:

"Most 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," said ReDigi's chief executive John Ossenmacher.

"ReDigi takes zero dollars and we create billions of dollars in wealth overnight."

While I do not buy music, or any other form of art for that matter, with resale value in mind, the outcome of the ReDigi case will set a precedent with potentially far-reaching impact. For one, if I do not own the music I've purchased via download, what happens to my music library when I die? Will the record labels come after my heirs for copyright infringement if they listen to my music? Sounds pretty silly when you look at it that way but ownership rights are exactly what is being argued in this case. And if it turns out we've been renting our music downloads without an option to buy, I'd expect the record labels to re-price downloads accordingly (but I would not recommend holding our collective music-buying breath).

The EMI v. ReDigi case is due to be heard in district court in Manhattan, New York, beginning this Friday, October 12th.

labjr's picture

I have pretty much the same opinion as you. I expect most consumers  would. Well, at least the older people that used to buy records and CDs. Younger kids mostly listen to stuff for a couple weeks and dump it anyway.

To me, this is a good reason to keep physical discs alive.

What about the Tom Petty set that included a download and disc? Can we resell that since it has a physical disc? Or the Jethro Tull set. Can we only sell the vinyl part of it since it's not digital? or can we only sell the viny and CDs since that used to be acceptable but not the DVD or BluRay discs, because they have copy protected( or the illusion of copy protection).

Are they now going to ban the sale of used SACDs and BluRay discs since the copy protection has been defeated?

Is it because the files are digital files which don't get old and wear out. Or because there is no physical medium?

Powerful corporations usually get what they want with these issues.

I don't believe the court's denial of the injunction against ReDigi means they will neccessarily favor ReDigi in the end. I think it may even mean the opposite. Like they showed no bias against them and treated them fairly and then ruled against them in the end.

I hope not but I feel like the court will make a typical ruling in favor of the record industry reading something like this: "Irreparable harm could come to the entire entertainment industry if the practice of selling used downloads is allowed to continue."

BTW, is this a case to be heard by a judge or is it a jury trial? With any luck the judge is an audiophile or an avid record collector.

deckeda's picture

- ReDigi is showing a good faith effort of adhering to the "don't copy, don't distribute" main points of copyright law by deleting the owner's file. If intent and context see sunlight with the court ReDigi will go far. If concerns about unproven or potential losses weigh heavily they will not. 

- Presumably the TOS for the iTunes Store has language that denies the downloaded file to be redistributed, re-whatevered, which could sway the court no matter what.

- The music industry will do whatever it can to not answer the question of why can't digital downloads be resold. They will predicably only be worried about theft and loss and leave themselves zero room to consider the former or how it might coexist without harm to the latter.

- Either way ReDigi is doomed. If they survive EMI they won't survive Apple, who could more easily create their own used music service and either undercut them on price or better the convenience, since everything ReDigi does revolves around Apple's iTunes app and the fact that the songs are "contained" within the same app that buys the songs.

MikeyH's picture

I don't see why one should subject music to Digital Rights Management after purchase when it's such a proven bad idea before purchase (so far), and has generally been removed from music distribution.

That's enough to doom ReDigi for me.

It will be interesting to watch this case, though, for the endless arguments as to what is digital media and can one 'own' it. Some of these ideas are new and far from settled in law, yet. I don't believe for a second this case will decide that, and a narrow interpretation will result.

All digital files are works created by someone, and as such implicitly have some rights attached, whether you agree to them or not. Those rights vary with the content of the file, and the will of the file creator. In some cases (software applications distributed on or off computers) there is a legal right to resell. It seems very poor form to conflate this right with media files, where the owner rights are so very different and can involve many more rights owners.

earwaxxer's picture

Interesting to see how we progress through the digital age. Not quite as cut and dry as it seemed to be.

What does it mean to 'own' something that can be cloned any number of times? I remember the early days of making personal copies when I recorded a Beatles album on a small portable reel to reel tape recorder. It seemed like magic, although there was never a thought about it being 'wrong'. It just allowed me to listen to the music without playing the record. Much different now that a copy can be made 'perfectly'.

deckeda's picture

Remember the "copy once" DRM used for consumer DAT recorders? Unlike later DRM which used only software that either made the file unplayable or sound weird, SCMS relied on a hardware handshake.

I wouldn't want to go back to that but it least it was an acknowledgment that copying was going to happen anyway, on some level. No such acknowledgment has occured since. 

All of this requires a balance of freedom vs. financial and intellectual concerns and in the end doesn't matter if an artifical limitaiton to copying is implimented or if a social or cultural one is. Just as long as there's a balance. 

I think both sides have gone a bit overboard at times.

marcusavalon's picture

I am sure the definition of ownership and the the right of an owner to sell thier property will keep the lawyers occupied for a significant length of time. However downloads are such a no brainer for the record companies anyway, no packaging, no art work, no physical store or distrubtion costs and now no ownership just a restricted license to use a track for a fee and the added bonus that if the customer is not carefull they may loose all thier music on a corrupted drive and have to replace it. Think of the enhanced profits! Ultimatley the concept of owning music will disappear as in a download only world ultimatley you will pay a subscription to stream music over the internet.

I think I will carry on buying physical CD's for the moment.

Vigna ILaria's picture

Now that really is a great question!....   Puts the whole matter in its proper perspective.

labjr's picture

How did they come up with $150,000 per song? Now that's a bit much for a used download.  I'll gladly sell some of mine for like $100,000 each.

MikeyH's picture

That's easy. It's the maximum statutory damage amount per item, set into the Copyright act.


It's arguable the law as it stands was intended by Congress to apply to infringing operations larger than one person, one file, one computer. However, the law is clear and that's the maximum per item for 'wilful' infringement i.e. when you know what you're doing is against the law. The amount, as with so many fines, is intended to be a deterrent in part. I think the minimum is $250/item.

The statutory damages are there to prevent time wasting on endless arguments in court over the actual amount of the damages to the rights owner.