Is there a re-sale market for ebooks? Should there be one?

Philip Turner • 13 February 2013

At a PW round table, Philip Turner (left) engages with ReDigi's plans to create "the world's first digital marketplace".
Before you rush to answer "no" to the first question asked above, consider that recently applied for a patent in this corner of the emerging digital marketplace. That development was covered recently by the publication Motherboard, in a piece headlined, "Used Ebooks, the Ridiculous Idea That Could Also Destroy the Publishing Industry". There are many people in book publishing who believe that if a resale market for ebooks is created it will unavoidably engender a race to the bottom in ebook pricing, causing not just disruption but real damage in the entire book world.

And, yet, notwithstanding the impulse toward slightly surreal jokes about ebooks somehow shopworn with torn covers or dog-eared ebooks, a company called ReDigi is devoted to creating what it calls "the world’s first digital marketplace". They say they are working to enable readers of ebooks and consumers of digital music to resell books and music they choose no longer to own. Today, Publishers Weekly, in one of the Executive Roundtable forums they hold every few months, offered their podium to John Ossenmacher, CEO of ReDigi. We were told early on by moderator Joe Wikert that several journalists were in the room, and that the day’s conversation would be on the record. I was glad about this, since I’m a blogger and I report on these issues too. Thing is, I would hardly have been willing to consider it off the record had Ossenmacher insisted on that. Though he came equipped with a deck filled with many slides, his presentation quickly turned away from the screen at the front of the room toward the audience in front of him.

The result was a spirited Q&A between Ossenmacher, a self-described "engineer who likes to get his hands dirty", with a rather sceptical book business and media-centric audience. Ossenmacher said they began engineering the software for their platform in 2008, and went live to users and consumers in October 2011. He added that shortly after that Capitol Records filed suit against ReDigi, on the assumption they were a site sharing files illegally. Capitol claimed infringement of copyright on their intellectual property by ReDigi. The court didn’t see it that way, and Capitol’s plea for an injunction against ReDigi was unavailing. Presumably because of the litigation history, Ossenmacher was guarded in his statements, but not so careful that I couldn’t follow what they’re trying to do. Among the intriguing things he said was that ReDigi is striving to lend some element of "physicality to a digital entity".

Counter-intuitive though this may seem, it is also an issue publishers are facing in a related context, where they’re challenged to create an analogue to the experience of print book buyers, who meet an author and eagerly purchase an autographed and inscribed copy of a book. (Autography is one company working to create personalization in ebooks, with digital autographs, inscriptions, etc. Read the article here.) He claimed that, far from enabling theft of IP, within ReDigi’s domain they monitor sellers' accounts and request that they delete an e-file of a book that’s been sold on to a new user - thus, he said, preventing multiple copies from being shared out improperly. He added that they would terminate the accounts of users who did not comply. Ossenmacher claimed their business practice would serve to reduce piracy, not enable it.

One neat piece of tech he mentioned was what he called "digital sonar", which allowed them potentially to locate and find a digital file that had somehow gone missing in the vast digital ecosystem - it emits a kind of "ping" that allows a stray file to be recovered and reassigned to whomever is its rightful owner. Ossenmacher asserted that currently "publishers are leaving digital dollars on the table", by not accommodating readers and customers who enjoyed the ebooks they bought, but then did not want to retain them for perpetuity. He claimed that by design ReDigi was sharing revenue with publishers, who he added could in turn share that revenue with authors. I tweeted my concern, though, that if you're talking about Big Six publishers, they are still offering a sub-standard royalty of 25% for ebooks, half of what many other publishers offer.  

It must be pointed out that publishers and authors currently enjoy no benefit from the market for used print books. With my publishing friend David Wilk, I am an advocate for what in the UK and Canada is called a "lending right". The term is a bit arcane, and its meaning isn't obvious. In those countries, each time a book is checked out from a public library, the author receives a small royalty. You might say this was the first micro-payment. During the Q&A I spoke up and asked if there might be something like a "digital lending right" that could follow a book down the resale or re-licensing trail, benefiting creators beyond the first sale. After the programme ended, I went to the podium to thank the speaker, and found him in conversation with Bill Rosenblatt, of Giant Steps Media Technology Strategies. Rosenblatt was saying to Ossenmacher that as far as he could ascertain, ReDigi must be creating a copy of e-files they received from resellers - if so, it would suggest one kind of legal status for them vis-a-vis the IP they’re handling. For his part, Ossenmacher insisted, "No, we’re not creating a copy." I offered an observation, that in ReDigi’s parlance, they’re "passing on a baton", as in a relay race, not making a new baton. I wasn’t trying to carry water for ReDigi, but that was his point. He thought the baton image aptly fitted what they’re trying to do, and I later tweeted about our three-way exchange.

I’m glad at least that ReDigi, in trying to create a secondary market for ebooks and music, is sharing revenue with publishers and record labels. If that part of it works, it could become a good thing for creators and content companies. And yet, I worry about the far greater possibility that a market for re-licensed digital files will only degrade the value of initial sales that publishers make. I wonder if ReDigi’s willingness to share revenue is in part conditioned by their certainty that publishers’ reluctance to do business with them would never be overcome without this provision.

Philip Turner is the writer and curator of The Great Gray Bridge. The original version of the piece ran here.