Oh, how much is that second-hand app on the home screen?

Frédéric Filloux in his Monday Note column describes a rights-based (as opposed to files-based) future for managing digital content (whether magazines or books):

A first phase is likely to consist of an extension of what we have today, i.e. a transaction system based of book files: text-based books or richer media products. The main players will remain Amazon, or the Apple iBooks store. But, in five to ten years, this way of dealing with intellectual content  will be seen as primitive.

The true revolution will be a shift from a files transaction system to a rights transaction system. This transformation involves radical changes in the way we think of digital content, books, videos or even games.

Today, Joe can’t share a book that he bought (rented?) from an e-book-store, can’t give it back, can’t pass it on, can’t re-sell it – nothing. He can either keep it or delete it. – what a waste! The publisher and technology industries, for all their talent, have created a form that, in important ways, is less convenient than even the original physical book form that it is based on .[1]

They will be forced to fix this state of affairs as more people read their books, magazines and more online, and competitors with saner policies enter the market.

But even in a digital rights-based world, what about a second-hand market for digital books – and apps? If Joe purchased an email program for his Nokia smartphone, and a year later bought an iPhone, he could

1. return his app (the rights to the app) to the store he bought it from. In this case, does Joe get a full or partial refund? Unlike a physical good, there has been no wear. And it’s fair to say he’d be refunded whatever the current price is (or maybe the price he bought it for, whichever is less). But this is flawed – since the number of rights are infinite, they are worth nothing themselves. The store gains nothing by refunding Joe his money, so there’s no incentive in a return-refund.

2. transfer his app (the rights) to Jane’s Nokia. Unless Joe’s gifting the app away, a transfer means Jane will need to pay Joe for those rights. How much are those rights worth to Joe?

This is the second-hand market for digital goods.

An eBay for digital goods sounds about right, and about time [2].

[1] And when we attempt to set the digital book/magazine free, the limited corral of policies we build around it is maddening in its clumsiness: you-can-only-share-with-so-many-people, you-can-only-share-so-many-times, you-can-only-share-with-an-identical-device, you-have-to-pay-extra-to-share. This is when you know that from among the inventors, engineers, marketers, lawyers and accountants, the first two have left the room.

[2] This market will need support from app stores and developers, of course. There’s no way – over-the-counter or otherwise – for Joe to transfer his app to Jane (or any other bidder). This is regardless of whether it’s bought from an app store (Apple/Android/RIM/(ugh)Nokia) or from the app developer itself.

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