Startup Claims It Can Sell Your Used MP3s Legally

While not quite a truism, it’s pretty widely accepted that a music startup is a bad idea. The record industry is at best unsupportive and at worst litigious when it comes to digital music sales and sharing and when it comes to welcoming (or crushing or suing) new companies and technologies.

So it’s hard not to be quite skeptical about the claims from a new startup – ReDigi – that it plans to launch a marketplace where you can legally sell your pre-owned digital music.

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The ReDigi Marketplace will be a contemporary used record store of sorts, the company says, where customers can bring in their old, unwanted records and CDs for trade-in and then buy used music at a discounted price. Except in this case, of course, those unwanted records are digital music files, and the transfer of ownership is a lot more complicated than simply handing over an old CD for a couple of bucks.

Buying and Selling Used MP3s – Is It Legally or Technically Possible?

ReDigi claims it’s meeting a customer demand – the desire to get rid of old music you no longer want. “The typical listener regularly uses only about 20 percent of the music in their libraries. The balance represents a lot of money and disk space being tied up on their computers and mobile devices,” says John Ossenmacher, ReDigi’s CEO. “With the legal issues involved in the selling and sharing of digital music, people have been stuck with their unwanted tunes, or forced to delete them in order to free space. ReDigi is the answer to that problem.”

ReDigi says it has come up with a technological solution to this problem, although it hasn’t released details of exactly how this transfer will work. It also claims that it’s “figured out what could be done to legally ensure that consumers regain the freedom to manage their own personal music collections.” Details are scarce there too.

Ownership of Digital Content – Is It Different Than the Physical Version?

Digital music files were once viewed by the record industry as illegal in and of themselves. An MP3 was presumed to be ripped and stolen from a CD. Although you can now easily purchase MP3s (and/or music in a DRM-restricted format), the rights you are granted as a customer are quite different than those when you buy a physical copy of an album. When you download an MP3 from Amazon, for example, the terms of service say that “upon your payment of our fees for Digital Content, we grant you a non-exclusive, non-transferable right to use the Digital Content for your personal, non-commercial, entertainment use, subject to and in accordance with the Terms of Use.”

You are free to sell your physical copy of a record, in other words. That’s legal. But you cannot transfer your rights to an MP3 to another person.

According to a story in Hypebot, ReDigi says it will give record labels and artists a share of sales. And while these groups have never had a share of the used record business, I am still skeptical that this is enough to win the record industry’s support.

The Future for Used (Digital) Music, Used (Digital) Books

Even if a music startup is a bad idea and a marketplace for used MP3s a suspicious one, this project is fascinating nonetheless. Are physical copies different than digital copies of content or not? The challenges that, I predict, ReDigi will face will likely be yet another demonstration of how the rules that apply to physical media – namely the ownership, transfer of ownership, and lending rights – often only apply to digital media when those rules benefit publishers and record labels. You can only lend a copy of an e-book to one person at a time, for example – just like a printed copy. You can only lend an e-book 26 times – quite unlike the shelf-life of a printed copy. You can sell a CD you don’t want to another person, but you cannot sell MP3s you don’t want.

Discuss