As of yesterday (March 7th), Apple has filed yet another patent with US Patent & Trademark Office, this time pertaining to used digital content “such as an ebook, music, movie, software application.” That’s right folks, soon Mackelmore will be popping virtual tags that he’ll acquire through digital thrift shops. Okay, that joke was a bad, I know, but I’ve never claimed to be a comedian.
But in all honesty this move by Apple, which coincides with similar efforts by Amazon, could shift the way we buy digital content in the future. Amazon is working on being able to share digital content (primarily books) between friends and re-sell these books to others once the user is done reading the book. Amazon plans to utilize it’s Marketplace platform to manage these transactions. Apple’s approach, on the other hand, carries provisions for making the lending and selling process happen between users rather than involving a marketplace intermediary.
While Apple’s patent doesn’t factor in a marketplace intermediary, it does take into consideration transfers that either take place through the original providers’ store or directly between users. In methods where an online store wouldn’t be involved, the determination about whether an item can or cannot be sold will reside within the user device itself, and will be based on criteria put into place by the original publisher. The kind of criteria we could expect to see is along the lines of “Digital Content X” can’t be sold for at least “X” days, and must have a minimum sell price of “X Dollars”. Other criteria to be determined by the user devices includes whether or not commission on the sale is transferred back to the publisher or online store.
It’s the commission piece that publishers should have the most concern with. The percentage of commission the publisher will receive will be based on time passed from the initial purchase, as well as how many transfers/resells have happened for the lifetime of the particular item. Publishers definitely stand to make more money by ensuring that DRM content is available only new and direct from the source, but Apple is arguing that it’s better to make a little money off of a discounted sale than no money on a sale that isn’t made due to the initial cost being too high. The sale of ‘used digital goods’ could still drive revenue back to the publishers from users who might otherwise resort to pirating content instead of paying full price.
What does this mean for you as an app developer? Probably not much initially, as chances are the focus of used digital content will be primarily focused on books, music and movies at the start. But there will probably come a time when apps and games will be resold as well. So for now, focus your energies now on retaining your existing customer base and getting their help to acquire new users so when the day comes that apps are resold, you’ll have a loyal following that won’t want to leave. And keep it in your mind that one day you’re work will be resold, so find a way to entice your users and customers to stick around. And once that day comes, we’ll no doubt give you all of the inside tricks and tips to make that happen!
Becky is the Senior Content Marketing Manager at TUNE. Before TUNE, she led a variety of marketing and communications projects at San Francisco startups. Becky received her bachelor's degree in English from Wake Forest University. After living nearly a decade in San Francisco and Seattle, she has returned to her home of Charleston, SC, where you can find her enjoying the sun and salt water with her family.