A New York court has concluded (PDF) that you cannot resell music downloads.
The case is Capitol Records vs ReDigi, a web site which lets you trade in pre-owned legal downloads.
The argument from District Judge Richard Sullivan is that reselling a music download is impossible, because you cannot transfer your download, you can only copy it:
Simply put, it is the creation of a new material object and not an additional material object that defines the reproduction right … the fact that a file has moved from one material object – the user’s computer – to another – the ReDigi server – means that a reproduction has occurred.
But by that argument, don’t you make a “new material object” every time you copy your iTunes download to a new directory?
As Capitol has conceded, such reproduction is almost certainly protected under other doctrines or defenses, and is not relevant to the instant motion.
The concept of “fair use” does not protect ReDigi either, according to the judgement, since it is a commercial transaction and not merely storage or personal use.
This is a decision with far-reaching implications. In essence, it says that once you pay for a music download, your money is gone forever. Your download collection has no resale value, nor can you legally transfer it to anyone else. The only way you might get your money back, oddly, is if your collection were destroyed; I have seen provision in some insurance policies for downloaded assets.
Who is going to stop you from transferring your collection to another person privately? That is different, a question of enforceability rather than legality.
You are better off buying a CD; the used CD market is deeply depressed, but does at least exist. Ripping a CD to your hard drive is illegal in some countries (including the UK, as far as I am aware) but I do not know of anyone being pursued for this, and there is a better argument for personal, non-commercial, fair use.
If the music industry could convert us all to streaming subscriptions, that would make more sense in the digital world. That said, it is unfortunate that streaming services like Spotify pay very little to artists in comparison with download services like iTunes.