Used CDs and DVDs Market

[anarchae]

I haven't bought a new CD in over 15 years and I haven't bought a new DVD at all. I buy all of my CDs and DVDs in the second-hand (shops, flea markets, online) and overstock (shops) markets for roughly 33% of their cost new (averaged across all sales). This is a multi-million dollar market that has obvious consequences/impact on the sales numbers of the recording and movie industries. I have watched the RIA go after online file-sharers claiming their sales are hurt by such activity, but I hear no mention of this major-marketing of second-hand and overstock media that surely must have more of an impact than online mp3 use/abuse?! In the case of the movie industry, the actual piracy that is occurring is having an undeniable impact, but this secondary market in previously-owned DVDs must assuredly be having (at least) an equal impact. What do you think? Do you get your media the same way?

[Dozer]

I think the problem is the fact that with online file-sharing, they can do something. With second-hand/used product, it is already covered under conventional Fair-Use laws(something that is suspiciously absent/vauge in the current DMCA)/ The RIAA picks the fights they can win, even if it's not the source of the true problem.


On a second note, why the HELL are CDs $20 now? This makes no sense, I can get a DVD for LESS than that(local shop sells all 1-disc DVDs for 18.99 :D )

[Jarulf]

I think the problem is the fact that with online file-sharing, they can do something. With second-hand/used product, it is already covered under conventional Fair-Use laws(something that is suspiciously absent/vauge in the current DMCA)/ The RIAA picks the fights they can win, even if it's not the source of the true problem.


On a second note, why the HELL are CDs $20 now? This makes no sense, I can get a DVD for LESS than that(local shop sells all 1-disc DVDs for 18.99 :D )

I am not sure about american copyright laws in this particular case, but what we have (online copying and second hand sales) are two very different things (from a copyright perspective). In the first, we typically deal with the act of creating a copy (which in most cases is a copyright infringement). In the second case, we have a distribution act. This is also a copyright iunfringement BUT, distribution is one of the rights that is consumed, that is, cease to exist, for the copyright holder once the first sale is done. That is, after that, the copyright holder do no longer have any right to control the distribution of the specific copy (I believe this is the first sale doctrine in american copyright law and has nothing to do with fair use at all). Hence it is perfectly legal to sell copies second hand.

[Dozer]

Well, you give a more correct explaination than me, but that's what I was trying to say, yeah :ph34r:

[Tal]

I prefer for the most part to buy my media first hand. I only buy so-so CDs, movies and games at second hand prices.

[anarchae]

The legality of the second-hand market is unquestionable. Prior to this phenomena, the respective industries had most consumers over a "buy-it-new" barrel. With the advent of the ready-availability of second-hand product, this has had to have led to a significant impact upon bottom lines and, I would submit, a much more severe impact than is acknowledged by the industries. There has been successful litigation concerning "price-fixing" practices on the distribution of new product. Perhaps, if the industries would engage in some "price-relaxation" they would actually see an increase in sales of new product.
Take DVDs, they currently cram them full of every "bell and whistle" they can possibly think-up, in order to convince you that $20.00+ is a "good-bargain". I am currently replacing a VCR library of a couple of hundred tapes w/DVDs, so I am more interested in simply a "good copy" of the movie and not all the "making-of" BS that they cram on those things. Maybe a "two-tiered" level of DVD product released concurrently? A "bargain" edition w/the movie (maybe full and widescreen, pref. wide if only one format) and then a "collector's" w/all the "fun stuff". What they appear to do now is, they release the "scaled down version" first and get $20.00+ a crack. A couple years later, comes the "collector's edition" at . . . $20.00+ a pop (couple of more bells). Then, a couple of years later, the "director's cut" or "special edition" at . . . yet ANOTHER $20.00+ (couple of more whistles), then there are "box-sets, etc. etc. etc. ad naseum. . . All I want is the frickin' movie, the way it was released, for cryin' out loud! So, I find myself avidly perusing used DVDs in order to obtain a DVD copy of a movie at the most reasonable cost (i.e. I paid 7.99 for Matrix Revolutions as used product - its "sale" price new averaged around $22.99 here!).

[Tal]

The legality of the second-hand market is unquestionable.

No its not. If you purchase an item the original seller has sold you all rights to that product. Hence why you can see DVDs of the Little Mermaid (which Disney is not selling any copies of right now) going for 200+ dollars on Ebay. If you buy a car from Chevrolet they cannot legally stop you from selling it to the Ford dealership across the street.

[anarchae]

Uhm, Little Mermaid NEW (sealed), Ltd Ed, Ebay, buy-it-now option $29.95 - 7 1/2 hours left on a one day auction (are links to such sites allowed, here?). Yes, some idiot just bid the SAME edition up to $46.00 in another 1-day auction that just closed (apparently this is a matter of "bid-rage" since both are on the same page)! However, neither of these approach the $200.00 you quote above. Amazon is a little pricier, w/new LMs going for a low of $31.93 and a high of $75.99 (good, used going for $21.99). Still, nowhere near $200.00?!
I can legally sell you any industry-produced copy of media (I don't claim to know the "legalese", but there is a transference of "rights" that go w'the purchase of the media). It is pirated copies that cannot be distributed/sold/produced. The legality of the second-hand market is quite sound.

[Kevin]

The difference on a second hand market on bottom line is different in that the seller actually got money in the first place on that single item. Sure they aren't getting a second sale from the second hand buyer, but that second hand buyer is generally not in their sales demographic anyway. A DVD, assuming that a copy wasn't made, can only be in one persons hand at a time. With file sharing, that one original that was bought can simultaneously be in the hands of everyone now. It's a non tangible item with no limits on distribution. A physical DVD isn't. If you buy that DVD second hand, no one else can. If there are only 10 second hand copies and 15 people want it and will buy a copy, you still get 5 new sales. If the second hand seller wants the unit again, they have to buy it back second hand or purchase a new one.

A second hand market is just that a different market. They have been around for as long as there have been product markets, they have well documented economic factors as well. They aren't a big deal. Sure some second hand markets are much larger than others and this new information and digital market has really blossomed with the durability of the media, but the car industry has a bigger second hand market than any other product, I believe. It doesn't really hurt the bottom line, or at least not in a way that can't be accounted for. The new product was sold and it sold as many units as expected for the manufacturer. Those units then circulate to other buyers with no impact because the total sold was what was planned.

The danger with games, music and movies that is different from cards is that the 2nd hand item you buy may have been copied and kept before being sold off. So now you have one unit in multiple hands and that is a similar issue to the file sharing. Well, it's the same thing but just via a different conduit. However, most of the 2nd hand market isn't of that nature. The product is sold because people didn't want it in the first place or they don't care about it anymore. In that case a second hand buyer is like the original buyer. The manufacturer got their sale, it just went through 2 hands to get to the actual buyer.

Overstock isn't really any different. Demand wasn't interpreted correctly, which is the real damage. In many cases, the associated loss is taken by the reseller, though not always. If Wal-Mart buys too many Weekend at Bernies DVD's to sell and then puts them on clearance, Wal-Mart, not whoever made that horrible movie, is the one who eats the loss since the production studio already got its money from Wal-Mart on the initial product purchase.

So, where are the obvious consequence on the movie/recording industry. It slows market growth for that product. That is really the only real impact. When you have a product that only has a 6 month life cycle, and most of your second hand markets are a year out, that stunted market growth is meaningless.

It's discussions like that this that really make me believe that 2 or 3 semesters of econ is good for everyone, because it means you don't have to have a lot of the discussion because it's already been explained. :) Admittedly you don't usually see the 2nd hand market analysis stuff until advanded or at a good school, intermediate, level studies, but eh.

[Tal]

Uhm, Little Mermaid NEW (sealed), Ltd Ed, Ebay, buy-it-now option $29.95 - 7 1/2 hours left on a one day auction (are links to such sites allowed, here?). Yes, some idiot just bid the SAME edition up to $46.00 in another 1-day auction that just closed (apparently this is a matter of "bid-rage" since both are on the same page)! However, neither of these approach the $200.00 you quote above. Amazon is a little pricier, w/new LMs going for a low of $31.93 and a high of $75.99 (good, used going for $21.99). Still, nowhere near $200.00?!
I can legally sell you any industry-produced copy of media (I don't claim to know the "legalese", but there is a transference of "rights" that go w'the purchase of the media). It is pirated copies that cannot be distributed/sold/produced. The legality of the second-hand market is quite sound.

Well its been a year or so since I was looking for this DVD for my daughter so my prices are a bit off. So pick another DVD thats very hard to find and isn't offered in the store and you'll notice the price is significantly higher. My point was that the original distributioner of the media have no claim on the extra money someone can make off the sale of an item for a much higher purchase price than the original.

I do have to apologize to you though as I misread your "unquestionable" as questionable. Sorry for the confusion.

[Griselda]

I know it's come up in the book market. There was a bit of an uproar from publishers when Amazon started offering used books side-by-side with new ones. In that past, used book stores were primarily separate from new book stores, and used book shopping was more of a "browse and see if you're lucky enough to find something good" activity. That didn't bother the publishers, but Amazon's model does.

Of course, Powell's Books, in my home state, has been offering new and used books together for at least as long as I've lived here. For me, it's always depended on what sort of book I was shopping for. If it was something that I expected to re-read many times, or that I wanted to keep in good condition, I'd probably buy new and maybe even hardback. Impulse buys are much likely to be used, but in my opinion that's *good* for the market, because I may just stumble upon an author I enjoy.

[anarchae]

Griselda hit what I was driving at. In the past, you had to go to a few "hole-in-the-wall" record stores (in our campus area) for the used goods and not a lot of people really didn't want to bother w/traveling down there to hunt the used bins. Now, w/the internet venues and the appearance of used media shops (handling used CD, DVD, game console media) in B-grade malls across our city (and I am sure in many other cities around the nation), the availability of used media is nearly ubiquitous. Amazon, and similar venues' offer used as an alternative to buying new to large segments who may have never considered purchasing used when it had to be "hunted". The appearance of shops, in suburban locations, catering to consumers of used media only increases the average consumers access to this alternative to new. I prefer the "hunt" method as there is more satisfaction (for me) in acquiring a good deal on a sought after CD/DVD, so I usually avoid the Amazon-type venues for purchasing. I do refer to them for pricing-references, though.