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First Sale and Digital Content

The previous entry ended on the note that to discuss file sharing, there must be some discussion of first sale in the age of digital content. At base, first sale is a straightforward concept. A copyright-holder has the exclusive right to make and sell copies of the work, but that right to sell is exhausted after the first sale. Once a consumer has purchased a copy, she has the right to resell the copy, give it away, lend it out, or even destroy it. First sale typically makes content both more available and more affordable. Content is made more affordable by the creation of secondary markets for used copies. Libraries also rely on first sale rights to lend copies to the public (or to members, students, etc), lowering the cost of access by distributing the cost of copies over a population (of tax-payers, tuition-payers, etc). First sale increases availability of content by allowing the owners of copies to continue to circulate (through sale or gift) their copies even after the work is no longer in production (publication, distribution, etc) by the copyright-holder. Works are therefore less likely to become “lost” when they are no longer available on the primary market.

The first thing to notice here is that first sale is predicated on the requirement of a medium, some form by which content is both delivered and consumed. The copyright-holder has the right to make and vend copies. Those copies serve as a means to transfer content between the publisher and the consumer (books, records, DVD's, etc) and as the means by which the consumer consumes the content (reads the novel, listens to the music, watches the film). At the point of purchase (or other form of alienation, such as winning the book in a raffle), the copy becomes the property of the consumer, and she may dispose of it as she wishes. In so doing, no copy is made, so there is no infringement, merely a transfer of chattel property. As such, it is coherent to talk about the sale of the copy as something other than the sale of the content.

The digital age changes the picture somewhat. When content is distributed digitally, no medium is required for transfer of content from distributor to consumer. Instead, the consumer simply downloads a copy from the server to her own computer (or other device). The consumption of the content then takes place on an appropriate device or with the use of appropriate software. Of course, there is still a medium, the hard disk drive or other storage device (flash drive, mp3 player, etc), but no medium changes hands. Furthermore, the role of medium in media consumption is trivialized by the ease of transfer. If I have an mp3 on my hard drive, I can play it using any one of several programs, or I can transfer it to my mp3 player for later listening.

In such cases, it is not immediately clear how first sale might apply. All of the standard ways of transferring digital content involve making a copy of the file. In an instance of digital distribution, there is no medium to resell or transfer to another. I could make a copy, but media producers appear to be certain that such copies constitute infringement, especially when disseminated via peer-to-peer networks. As such, it would seem that first sale might simply pass away with the ascent of digital content. Unfortunately, in such cases, there is chance that the benefits of first sale will be lost.

Consider the relatively recent case of Amazon deleting copies of George Orwell's Animal Farm from Kindle devices due to a request from the publisher. Without notice, “owners” of a public domain text found that text missing from their libraries. Likewise, paid subscribers to the Hulu Plus service may queue an episode or movie for later viewing, only to find that the content provider has removed the episode from the service. In these cases, the content providers have made clear that access to digital content is something that they want to control, and very tightly, but tight control is more likely to lead to loss of works. If a content provider removes all episodes of a series from Hulu, refuses to release it on DVD, refuses to sell rebroadcast rights, and refuses to sell or otherwise release any digital copies, the series will quickly be forgotten. Now, one might also say that such activities are antithetical to the content provider's interest. After all, if the series cannot be seen in any form, it will not become popular, so there will be no demand and no way of making any further profit from the work. Nevertheless, there is nothing to stop a content provider from releasing the series, allowing access via Hulu or perhaps Netflix for a time, then removing the content entirely once the profits begin to decline. In such cases, there may be demand for the series, but the content provider prefers to focus its efforts in developing other media, and does not see letting any particular series fall by the wayside as especially tragic.

The challenge, then, is to fine some way of preserving the benefits of first sale, finding some way to distribute access to content on a more egalitarian basis (as libraries as secondary markets do) and allowing individuals or organizations to archive content to make it available once it is no longer offered on the primary market.


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