Will This Startup Get Shut Down For Abusing iTunes?

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Though dated and becoming obsolete, CDs and DVDs still offer one distinction over digital media: if you don’t want it anymore, you can sell it off again. Not so for music and movies bought off the web, a court has ruled — once you make your iTunes purchase, you’re stuck with it.

A start-up firm, ReDigi, was brought to court by Capitol Records, which insisted that Redigi did not possess the authorization necessary to resell music purchased through Apple’s (NASDAQ:AAPL) iTunes program, and the judge overseeing the case, U.S. District Judge Richard Sullivan, sided with Capitol.

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The decision, handed down on Monday, offers slim hope that there may one day be a used marketplace for digital media, similar to one based on used books and CDs.

“This will profoundly affect the economics of any digital re-sale marketplace,” by limiting what can be sold as “used” or forcing sellers to obtain copyright holders’ approval before transacting business, said Bill Rosenblatt, president of consulting firm GiantSteps Media Technology Strategies.

Digital music surpassed physical purchases for the first time in 2011, and made up over 55 percent of all music purchases in 2012 according to Nielsen SoundScan, which tracks sales of recorded music.

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