Come Oct. 5, the music and publishing industries will probably be glued to the copyright infringement lawsuit filed by Capitol Records against ReDigi, an online startup selling previously owned digital music. The suit is slated to head to U.S. District Court in New York City to decide whether ReDigi has the legal right to buy digital songs from their original purchasers and resell them to other consumers.
Although the suit deals with music files, publishers are watching carefully because ReDigi expressed to Publishers Weekly an intent to resell used e-books in the same manner. Publishing companies that were counting on e-books to zap the used-book market out of existence may now be faced with the prospect of an even larger market if ReDigi prevails in court.
However, unlike the secondary sale of CDs and print books, the musicians and authors would receive a payment from ReDigi for each used digital item sold. ReDigi has plans to let recording companies and publishers get a cut, too. MIT’s Technology Review explained the details of ReDigi’s business model, but in short it works like this: ReDigi transfers a music file to its cloud servers while simultaneously deleting the file from the seller’s synched device. When the file is resold, the reverse occurs. The sum received is split among ReDigi, the seller, the artist, and eventually the producing company.
Capitol’s lawsuit claims ReDigi violates copyright law because it’s actually making a copy of the music file when it’s uploaded to the cloud servers, then making another copy when it’s downloaded to a new buyer.
For its part, ReDigi has built some antipiracy controls into the transaction. Music files are checked for legal ownership before being accepted for resale; “ripped” files are rejected. A digital signature is added to each file when it’s resold so that companies could track any illegal activity thereafter.
If it gets the chance to resell e-books, ReDigi also plans to sweeten the deal for publishers by harvesting and sharing reader data from the used titles—such as length of time spent, number of times the e-book was accessed, and skipped sections—that could aid publishers in better understanding their audience. That’s information that could be particularly handy for textbook publishers.