An Amazon patent filing suggests the company wants to sell used copies of digital files such as Kindle books. But the economics involved means making the idea into reality could be tricky.
The patented idea is effectively an adaptation of the existing lending policy on Kindle books. That allows one user to lend a book to another for a set period. During that time the original owner is unable to access the book on their own devices, although the digital file remains in place.
The idea now is to simply adapt that system to remove the stage where the borrower “returns” the book to the original owner. The original owner would still have the file on the device until they deleted it, but would never be able to regain access to it (unless they purchased the content again.) The patent talks about the idea of putting a technical limit on the number of times a book could be resold. Naturally each “resale” would have to be done via Amazon, which would no doubt take a cut of the price.
Although the model is adapted from Kindle books, Amazon says the idea could work for other digital files such as music and videos.
While the technology is relatively simple (albeit virtually inviting attempts to hack it and regain access to the files), the financial and legal situation could be a nightmare. Amazon already needs permission from publishers to make books loanable and would likely need similar permission to allow for resales. While publishers can’t currently get any money from sales of used physical goods, you can bet they’d push to get a royalty for every digital resale.
The other big question is how the pricing would work. From the reader’s perspective, what they get is identical whether it’s a “new” or “used” digital file, so there’s no reason not to buy the cheapest version every time. Logically, the only time anyone would buy a “new” copy would be if nobody was currently offering a “used” copy. If owners are allowed to set their own price for reselling (in the same way as with printed books) the result could make a fascinating case study for economists, with prices driven purely by demand and supply and both buyers and sellers having perfect information through the Amazon site.
Given this likely outcome, it’s hard to see publishers going for the idea. I suspect that even if Amazon is able to persuade them to allow digital resales, they’ll insist on a fixed period after publication, such as six or 12 months, before people can sell “used” copies. That would deal with the fact that different people have different levels of desire to buy a book and different prices they are willing to pay, limiting the problem of publishers losing out when those willing to pay full price are able to get it cheaper.