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Think Twice About Your Music, It's Alright: ReDigi and Murfie

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Make a musical mistake? You could soon be whistling a new tune, thanks to two startups that shake up the secondary market and bring ownership back in style.

I've got no regrets about downloading Aesop Rock's "No Regrets". Ditto for Jay-Z's "Regrets". But I can't say my MP3 collection is without missteps. There are more than a few questionable choices on my hard drive, mostly classic rock and underground hip-hop deep cuts that I haven’t clicked on in years.

The story gets worse with a flip through my CD collection, which includes such gems as Everclear’s Sparkle and Fade and the original soundtrack for Beavis and Butt-head Do America.

We've all got musical mistakes we'd like to erase, Eternal Sunshine of the Spotless Mind-style. While the memories might never fade, a couple of new services can help find all those unwanted (and lawfully obtained) songs a good home, and repay you for the trouble.

These startups have met both enthusiasm and skepticism and, in one case so far, legal action. I reached out to the founders of ReDigi, an MP3-resale service, and Murfie, an online used-CD marketplace and storage locker, to find out more about why they do what they do -- and how their ownership-first services fit in an increasingly streamed world.

ReDigi: A Second Life for MP3 Dusties

The pitch for ReDigi is simple: it's like eBay, but for digital music files. The idea is that once you legally download a song, it's yours, and you should be able to treat it just as you would a CD or vinyl copy, including selling it to someone who wants it.

"When a person buys a digital file (music, book, etc.), they own that good," wrote ReDigi CEO John Ossenmacher in a recent email exchange. "ReDigi is simply providing consumers with the tools to access the intrinsic ownership rights to that purchase and the tools to store, stream, gift or sell that good in the secondary market should they decide they no longer want to own it."

When that sale happens -- song pricing depends on popularity and original market value –part of the proceeds go to the user (in the form of credits to be used in the ReDigi marketplace; there's no cash involved), part to ReDigi, and part to the artist. The company's Artist Syndication Program gives the creators of the music 20 percent of the total sale, which Ossenmacher says is often more than they receive from the sale of a "new" track in other markets. They'll soon roll out a program allowing unsigned artists to sell their music directly on the service and recoup 70 percent of each sale. "The artists we talk to love ReDigi," he says.

They might, but do their labels feel the same way? I first heard about ReDigi on account of its legal battle with EMI, which claimed that the service promotes copyright violations. ReDigi won the suit, but the battle is very likely not over. Don’t expect the company to back down.

"One of the reasons for the rampant copying of music without regard to the law is because digital music does not feel like it has value," argued ReDigi CTO Larry Rudolph, who's also a professor of computer science at M.I.T. It's how ReDigi recognizes that value -- and the differences between digital and other goods -- that makes him confident that the company can withstand further legal challenges. Users have to download and install a "Media Manager", which verifies legally purchased files on their computers, deciding which are eligible to be stored and/or sold (no files ripped from CDs are eligible, for instance).

Once it's uploaded to the cloud storage system, all copies of the file are removed from the local hard drive, so that users presumably can't keep listening to their music and sell it at the same time. "ReDigi is a tremendous deterrent to piracy because it only provides services and value to lawfully acquired music," said Ossenmacher.

Couldn't you just download copies of all your files to an external hard drive or slap 'em on a disc? Sure, but the Media Manager also stays on your machine, monitoring whether those files make a reappearance. If they do, you won’t be able to sell, anymore. Also, I'd think the fact that you can't actually make money off selling your music -- only get more music -- would limit the fraud factor somewhat.

I tested out the system myself, and it was pretty smooth. My chosen song -- Casiotone for the Painfully Alone’s “Tom Justice, the Choir Boy Robber Apprehended at Ace Hardware in Libertyville, IL” (sadly, prices are not set by title length) -- was quickly uploaded to my cloud storage locker, and another click listed it for sale. As of now, there have been no takers at the low, low price of 32 cents… but a guy can dream.

Murfie: A Ripping Good Time for CD Collectors

What if your regrets come in hard copy? You could haul your discs down to the local record store and have a smirking clerk offer you pennies on the dollar for them, or you could send them to the Madison, Wisconsin-based Murfie, which describes itself on its website as "a gigantic CD collection fueled by people across the country."

Users can buy and sell music using the service as a middle man: You send your CDs to Murfie, and they rip and transfer them to zip files, which are then sold at whatever price you set (the company takes a 30 percent cut). For an extra $3 fee, the buyer can get the physical disc, too, or it can simply be transferred to the buyer's account in the Murfie warehouse. The idea is that people want access to the music on CDs, but recognize the limitations of the CDs themselves. “Online and purely digital music are in many ways better than CDs,” Murfie co-founder Preston Austin recently wrote to me via e-mail. “The best collaborative consumption is when people have flexible access and ownership -- it doesn’t have to be one or the other.”

Murfie also offers users the option to simply store their music and reduce all that CD clutter (if you want the music back as a file, it’ll cost you $1 per ripped disc). It’s a service I wish I knew about last summer, when I spent several hours burning discs to my hard drive in preparation for a move, leaving behind a shoebox full of music in the back alley. With Murfie I could’ve saved time and made some money off the stuff I didn't want to own anymore. I’m not the only one who sees some benefit here; Murfie currently has about 5,000 members storing over 200,000 discs in the company’s secure warehouse.

Buying and selling CDs isn't really new, which explains why Murfie hasn't faced the same legal challenges as ReDigi. Austin said that like publishers and retailers, the service operates under the ‘first-sale doctrine,’ which allows a purchaser of a copyrighted work to transfer it to someone else while giving up his or her rights to it. Of course, there's a potential for users to game the system by copying music they buy and then re-selling the discs, but that can happen just as easily in a used record store. Murfie's planned for infringement as best it can, with a 30-day waiting period on re-listing any titles purchased through the marketplace, meaning you’d have to be pretty dedicated to infringement to make any real cash.

While the company respects its members to do the right thing, it respects artists and copyright holders just as much, and wants to create a marketplace that meets the needs of everyone. To that end, Murfie is working with labels to create unique licenses for the service, and exploring options specific to help independent artists sell their wares. In Austin’s mind, it’s not just a legal issue, but an ethical one. “Failure to contribute funds to the economy that produces music is a failure to support an economy you get value from,” he said.

In an effort to contribute to the system, I recently sent off some of my remaining discs to Murfie via a postage-paid kit. It took a week or so to get my personal shop up and running, but I'm optimistic that some '90s completist will want my copy of 311’s self-titled breakthrough.

Despite the early success of both services, it could be argued that these innovators are actually behind the curve. Isn’t it all about streaming now? Spotify, Rdio, Pandora and the rest have dominated the conversation of late, and many fans seem to find these providers fit more easily into their low-commitment lives. A recent Bloomberg Businessweek profile of Spotify founder Daniel Ek makes the case: “To know whether Spotify will make it in America, you need only ask yourself: Do you still need your collection?”

The ReDigi team thinks you do -- if not for philosophical reasons, then for practical ones. The biggest problem with “pure streaming” services, Ossenmacher said, is that once you stop paying, “all of your music goes away. You have nothing to show for the money you spent.” Austin put the conundrum in real estate terms: “When you rent you are subject to the whims of landlords who may be great, may suck, and may change from one to the other. Owners have more liberty.” Among the privileges of ownership is “the right to give a rare album you own to your sweetheart and have that mean something special.” Shared streaming just won’t cut it on Valentine’s Day.

Services like these certainly raise some questions, but in my mind they also have the potential to increase the overall value of music for users, who make a conscious decision about what they want to own, and thus are more likely to engage with it. They also offer a similar low risk as streaming, because you can always trade in your selection for something else or get (most of) your money back.

Both the ReDigi and Murfie founders say they're music lovers, and I think it shows in their business models. Music is an obsession with a lot of turnover. Only a small percentage of my collection is something I feel I need to own and have in regular rotation. Should artists and labels want their music sitting around, un-listened to, on a hard drive or in a CD folder -- or should they want it in the hands of users who might actually listen to it, potentially spurring more purchases down the road? I'm pretty confident that I’m done with my Sublime phase, for example, but there's likely someone else who's just getting started with that particular obsession and would jump at the chance to acquire my used music.

“It’s about being excellent to each other,” said Austin, and supporting the music market in a way that benefits everyone -- the old listeners, the new listeners, artists, and labels. ReDigi also has a philanthropic streak; according to Ossenmacher, the original idea for the company was a service to help people donate digital goods, and the team plans to add a donation component soon.

Good thing, because charity might be the only way I can unload my copy of Cat Stevens’ “Miles From Nowhere”.

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