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Friday News: Apple files for used digital good sales patent; B&N announces video licenses; Publisher rails against protection racket of bookstores; Readers beware

Friday News: Apple files for used digital good sales patent; B&N...

At Writer’s Unboxed yesterday (post has since been removed), the blog post was from an author (not a romance author) who was unhappy with the way in which readers interacted with her.  She enumerated several questions she didn’t like including the impertinent ones about money (how much do you make) and manuscript review (will you read my own book) but she also took to task readers who asked where she gets her ideas (very dumb question she says even though it is the very first question she answers on her FAQ at her blog).

Worse of all, she posted a reader email in which the reader expressed how much the reader loved the author’s work and how she had gone on to buy all of the author’s titles but that she was impatient that there were no new books in a particular series.  She urged the author to “get on with it.”  The author took great affront to this, calling the reader entitled.

There were two things that struck me about this blog post. First that she reposted a fan’s email to her. I hope that the fan did not follow the author online and see the way in which the author dressed her down in such a public fashion.  But second that the tone of the email’s charge to “get on with it” resulted in such a negative reaction when the entire email was how much the reader loved the author.

I know that writers feel a lot of pressure these days to produce more product, faster, but I promise that a reader who says “get writing” is only saying this because she has a tremendous desire to read more by that author. It’s really the ultimate compliment.

The blog post was ultimately taken down but I have to wonder what the purpose of the post was in the first place.  Chastising readers for not crafting their author emails just write in a public forum seems to be in poor taste and if it is designed to give advice to other authors, then it’s really bad advice.

This incident followed on the heels of another disturbing event where author Lloyd Lofthouse took it upon himself to hunt down reviewers/commenters on his blog and call what he presumed to be their place of employment.

If you leave a comment on a WordPress Blog, you also leave behind your IP address and may discover where the person lives and/or works.  In this case, I was handed both locations. It seems that Anna Karennina left her first comment from home and the second one from work at the San Mateo County Office of Education where only staff members and teachers have access to the wireless code.  I called the office and ended up speaking to the person in charge of internet security for the county and explained the situation.

Overall this is all so ironic because Mary Janice Davidson emailed me out of the blue about a blog post she wrote about author meltdowns. I emailed back that I was trying to avoid those. No such luck.  But I had to pass on these warnings.

Readers, be careful where you comment. Do you trust that person’s blog where you are leaving the comment?  Be careful whom you email or your email may be posted for critique by an author.


Recent patent filings reveal Apple is asking for a patent to sell used digital content. Apple’s patent contemplates an on sale limitation and a minimum price tag set by the original publisher. In some circumstances, the resale of a used good may result in the renumeration to the original publisher or the online store (like a seller’s fee). The patent application references, specifically, the resale of a book. The patent was just filed and it might be too similar to Amazon’s patent which has already been granted. TechCrunch

Offering instant access to a wealth of digital entertainment, NOOK Video lets customers shop a vast collection of new releases, blockbuster titles, popular television shows, favorite classics and more, available for streaming or download. NOOK’s newly announced content agreements will bring thousands of additional movies and TV shows for all ages and interests to the NOOK Video catalog, including the blockbuster films The Hunger Games, the Twilight movies, Tyler Perry’s Madea Gets a Job, Skyfall, Rocky, Fargo, Flight, Paranormal Activity 4, Act of Valor, Safe Haven, House at the End of the Street; independent films from Film Buff’s catalog including Charles Swan and Exit from the Gift Shop; and TV shows like Mad Men, Border Wars, Great Migrations, Amazing Planet; as well as educational content via Little Pim, the leading foreign language learning program for young children, plus many more. Press Release

Simon & Schuster was having a tiff with Barnes & Noble over what B&N referred to as the perceived lack of support from S&S.  B&N in response was “significantly reduc[ing] its orders from S&S.” Amazon takes its pound of flesh differently by requiring publishers to sell their books to Amazon at a 60% discount. Dale suggested that Amazon’s tax avoidance policies are helping to return buyers to their local independent booksellers.

The case of the used digital book store

The case of the used digital book store

Image via Big Stock Photo

Image via Big Stock Photo

In January 29, 2013, Amazon was granted a  business systems patent for the sale of previously owned digital products. This patent was applied for in 2009 and Amazon has done nothing to indicate that it intends to set up a used digital bookstore either when it filed for its patent or when it received approval for the patent.

The news of the patent grant led to much Internet speculation that Amazon would soon be opening a digital marketplace for previously purchased digital goods.   While Amazon is not the first company to have contemplated a used marketplace for digital goods, it is perhaps the largest name to be connected with such a concept.

In fact, at least one other company related to books called book.ish  out of Australia  has put forth the idea of bringing greater ownership to readers by allowing the resale of digital goods. A popular company known as Steam commands approximately 50 to 60% of the digital distribution of videogame software.   Steam does not develop videogame software but instead is a digital rights management company which sells access to digital  video games.  While the right of first sale hasn’t been decided in the US, in 2012 the European Court of Justice determined that digital software and games could be resold so long as the original purchaser does not keep a copy of it themselves. Valve, the company that runs Steam, has been sued in Germany for the right to resell access.

In the United States, a company called ReDigi  started a business to resell iTunes MP3s. Capital Records, among others, have sued ReDigi  for copyright infringement. Currently the  parties to the lawsuit have filed opposing motions for summary judgment, or legal documents requesting the court to rule in their favor. The court has not ruled on those motions but when it does,  it will have far-reaching effects on the concept of ownership and digital goods.

While authors and publishers look at the resale of a digital good as something just a step up from piracy, consumers see this as an acknowledgment of ownership rights.   Or in other words, there are two sides to every coin.

While the ReDigi business model does not divert any funds to the original creator upon resale of a  record or album, it is likely that any  marketplace set up by Amazon for  used digital goods would be very much like the existing lending system Amazon has in place for digital books.

For those unfamiliar with the Amazon lending program, owners of Kindle devices have the opportunity to borrow  one book each month  from a pool of eligible books. The authors and/or publishers are compensated for each lend from a pool of money that Amazon makes available to those content creators participate in the lending program. It should be noted that only Amazon Kindle device owners can take advantage of this program. You cannot access the lending feature from a  Kindle app downloaded to your Android or Apple device.

For the most part, Amazon lends only books for which the content creators have given permission. when Amazon first launched the lending program, there were titles included in the program which Amazon had not received specific permission to include. For those titles, Amazon was paying  their wholesale price for each lend.   Since then, most if not all books in the lending program are included on a contractual basis with the publishers or authors participating.

In addition to the Kindle Owners Lending Library, some books have a reader to reader loan feature.   Each book that has that feature will include “Lending:Enabled”  at the bottom of the product details section of each book listing:

Lending Enabled

A purchaser of the book that has lending enabled can loan that title for 14 days to any person with a Amazon account and a willingness to download an Amazon App. Reader to reader lending via Amazon does not require a Kindle device.   During the lending period the original purchaser does not have access to the title.

One of the arguments against allowing the resale of digital goods is that the original purchaser will keep a copy for themselves while selling a copy for their own profit. This of course assumes the majority of book buyers are dishonest and criminal.   But it also ignores that readers can engage in this activity while  participating in the Kindle Owner Lending Library program as well as the reader to reader program.

Amazon has the technical capabilities of implementing a digital used bookstore at any point. I do not believe, however, that Amazon will launch a digital used bookstore without  agreement of the original content creators. It is not in Amazon’s interest to drive content creators away from its Kindle platform. Whenever I see authors accuse Amazon of anti-author behavior,  it demonstrates a misunderstanding of how Amazon is attempting to circumvent and disrupt traditional publishing.

Amazon is in a greater position of negotiating power today due to  the success of non-traditionally published books. The self published author who uses the Kindle direct platform and has success in doing so provides Amazon with greater power in the publishing industry then when it solely sold books produced by others.   Amazon has no  incentive to drive away self published authors at this juncture.

There are two legitimate concerns regarding the resale of digital products. Both have to do with the fact that a copy is nearly as perfect as the original. When you buy used product, the value of that used product depends in part on its “like new” status. The more like a new product the used product appears, the higher price the used product can command. A used digital product is almost indiscernible from its new product counterpart.

The second legitimate concern regarding the resale of digital products includes the  durability of a digital good. There are no studies that I can find that indicate how long a physical good lasts  although it has been said anecdotally that a used book will have nine owners. A digital book can be sold and resold an infinite number of times with little or no degradation.

In its patent application, Amazon does contemplate restricting the number of times a digital good could be sold and it may be that Amazon would tier the price of a used digital good based upon the number of owners it has had previous. Thus if you purchased a book that had been sold five times previous, Amazon’s resale value of that book would be reduced proportionately.

Digital book prices have been falling consistently since the Kindle was originally introduced in 2007. According to independent booksellers like Smashwords and All Romance Ebooks, the file has not been precipitous but steady.   It is possible that with the increase of rights associated with the digital book  such as the ability to resell and recoup the financial outlay,  consumers will be more amenable to a higher price point for digital books.

It is also possible that increased volume may result from lower priced books which could benefit the content creator should the  used marketplace created by Amazon for digital goods returned some amount of  revenue to the original content creator.   Given the  uncertain state of the law regarding use digital goods, it may be that Amazon launches a digital use marketplace in the European Union or Germany or Australia before such a marketplace is introduced in the United States.

Ownership of digital goods is an important property issue that needs to be decided with some finality here in the United States; not only for current consumer  usage but for inheritance rights as well. There are a number of rights to be balanced in this argument but I would hope we would not forget that the consumer has rights as well.