Dispatches from the Digital Revolution
Digital publishing has been abuzz (and in many cases, aghast) at the recent news that Amazon may be entering the digital resale market. Publisher’s Weekly announced earlier this month that the United States Patent and Trademark Office had approved a patent application, submitted by Amazon in 2009, for a digital item resale system.
There are plenty of places to read general rants against the idea of digital book resale market, so I won’t repeat them here (though they certainly bring up valid points). Instead, let’s take a look at what the Amazon patent—and the threat of a resale market—mean a little more concretely. You can read the details of Amazon’s patent on the USPTO website, linked here.
Amazon proposes a system by which “a secondary market which allows users to effectively and permissibly transfer ‘used’ digital objects to others while maintaining scarcity” is created. This recognizes that wanton sharing of digital copies would ruin the market for digital content; “maintaining scarcity” is a good thing in the consumer economy. So far, so good.
The way Amazon intends to preserve that scarcity is to create two “counters” for their digital products. The first is the Object Move Counter. The Object Move Counter (OMC) counts the number of times an object is moved from one personalized data store (i.e., your Amazon account) to another. According to the patent: “the OMC may be used to implement a policy in the marketplace where digital objects may only have a finite number of moves between personalized data stores.”
This means that Amazon (or, conceivably, publishers) can set a limit of transfers allowed for any given digital product. If the OMC is set to “1,” then only one resale or loan is allowed for that product. If it’s set to “2,” then two moves are allowed, and so on. (Speculation on my part: Might a higher OMC be a justification for higher Kindle prices?)
The second counter is the Object Download Counter (ODC). Unlike OMC, this doesn’t restrict movement of a file between individuals. Instead, it looks at how many times an individual can download his or her own content. The example used in the patent is that of digital music files. “If set to one, the ODT [Object Download Threshold, or the maximum downloads allowed through the ODC] would permit the user to download the song once from his or her personalized data store to, e.g., his or her personal media player or to another personalized data store, but thereafter the user would lose the ability to download the song again.” If the max is set to zero, users would only be able to listen to the song by streaming through their Amazon account, instead of on, say, a burned CD, an iPod, and so on. (Again, speculatively: Perhaps a file set to zero downloads would be a free download offered through Amazon or a song sample; perhaps files with a higher download threshold would cost more.)
While the rationale of the system is interesting, perhaps the key aspect of the patent is this:
User identification information may also be used to modify the OMT. For example, the OMT may be set to allow five permissible moves between a first set of users (e.g., users located in a specified geographic area, users having a premium membership, users purchasing a premium version of the digital object, users belonging to a specified group, etc.) but only one permissible move to a second set of users (e.g., users located outside the specified geographic area, users having a basic membership, users purchasing a basic version of the digital object, users not belonging to the specified group, etc.).
My interpretation of that clause? Join Amazon Prime now, friends. You’re going to have some sweet deals coming your way.
In sum, Amazon is creating a system to encourage users to share content as they would physical books, CDs, and DVDs, but with safeguards in place to preserve the scarcity of consumer goods. (Since, of course, digital loans are not limited by physical proximity in the same way that physical book or CD loans are.) What does this mean? Come back to Appazoogle tomorrow for more discussion of the Amazon patent and its implications for publishers and consumers.