Digital media lives in a strange place in our lives. While some cling even now to the claim that vinyl holds nuances no mp3 file can match, the fact remains that people are overwhelmingly choosing digital media over more traditional alternatives. This easily opens more than one can of worms, certainly. Apple alone has sold more than 150 million iPods, as of April 2008; that’s about one for every two U.S. citizens. Reasons to go digital abound. Why keep hundreds of CDs when you can carry their contents in your pocket? Books are bulky, expensive, and all too often the wrong one ends up in the overnight bag – why not keep all of your books on the slim, carry-all Kindle?

However, many questions remain about the cost of these conveniences. Digital media can be somewhat ephemeral – just a power outage or change of licensing terms away from disappearing. Particularly interesting is the change in purchasing dynamics caused by this shift. See, physical media – books and CDs, for example – are examples of durable goods. You can use them once or twenty times, and, assuming some baseline level of care, they’ll survive another read or listen. In contrast, a piece of fruit is a nondurable good – once it’s been eaten, you can’t eat it again. Since durable goods are those you can reuse many times, it is only natural that durable goods support resale to secondary, or used, markets. With regard to books, research suggests that used markets benefit rather than detract from sales of new books, and also allow those who would normally not buy books (at full price) to do so. Amazon – creator of the Kindle – embraced the idea of secondary markets for used books when they started allowing people to sell used books alongside new on Amazon.com.

What about digital media? Digital media fits the criteria for a durable good in that mp3 files can be played repeatedly and a book on a Kindle can be read over and over again. This would suggest that digital media could support a secondary market. However, those who sell digital media usually control transfer of that media after first sale. In spite of their previous embrace of used markets, the Kindle terms of service disallow any resale or transfer of Kindle-based books. Similar terms in iTunes limit the number of computers which can access a particular song purchased there.

For now, the fact that consumers can’t ever loan, trade, or sell the music and books they buy in digital formats does not seem to be slowing them down. If secondary markets really do benefit us, though, the paperback is going to be around for a long time.

Related posts:

1. Amazon’s Kindle: Super Useful or Super Flop?
2. Three Technologies That Don’t Impress Me Much
3. The Case of the Disappearing Bid?
4. New Factory Orders Continue Steady Rise
5. How the iPhone Changes Consumer Behavior