Used MP3s? Startup Treads Delicate Resale Terrain

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In the physical world, buyers are allowed to resell their possessions as part of the first sale doctrine.

That goes for used cars, used baseball cards, used couches, and even used CDs.  In fact, it also applies to promo-only CDs distributed by labels, according to a recent court ruling.

But does the principle translate into the digital world, an environment that eliminates scarcity?  In the early 90s, Garth Brooks unsuccessfully attempted to punish retailers selling his CDs used.  In the current context, major labels are unsuccessfully attempting to reduce file-sharing by suing suspected uploaders.  But what about those attempting to resell purchased content on the open market?

The question is academically interesting, though the concept is probably hopeless as a business model.  Just recently, beta-stage startup Bopaboo started floating the digital resale idea, despite obvious issues related to intellectual property and legal issues.  The marketplace allows sellers to post content for sale, and others to purchase at set prices.  “When we began Bopaboo, we set for ourselves not a modest challenge: can we provide consumers a legal method and marketplace to buy and sell digital music?” chief executive Alex Meshkin mused on the blog.

Tough question, especially since sellers can easily keep copies of content already sold.  The concept also seems vulnerable to fraud, though Bopaboo is only giving sellers credit to purchase new music from its site.  The private beta is happening at