If you bought a music CD from Amazon in recent years, the giant online retailer has done you a small favor – and itself and the music industry a bigger one – by digitizing them for you as MP3 files and storing them online for you to download or stream. The company calls its new feature "AutoRip", and for at least some customers, it'll be a genuine convenience.

It's a small favor for me, because I'd already ripped my CDs to MP3 files. I've even converted some of my even older LPs – for youngsters, that would be music on vinyl platters, played on a turntable – to digital files. For Amazon (disclosure: I'm a long-time, though quite minor, shareholder), the benefits are simple and potentially valuable: the service further ties music customers to the Amazon ecosystem rather than, say, Apple's iTunes marketplace. For the benefit to record companies, check out the fine print accompanying AutoRip, which will give you qualms – more on that in a moment.

But for at least one music buyer, AutoRip is proving to be a great value. I asked my followers on Twitter and LinkedIn what they made of the service, and Josh Wolf, a documentary filmmaker, responded:

"(F)or those who have been purchasing CDs from Amazon for a long time, and have also suffered the unfortunate burglary of their music collection, this new AutoRip service could be a life-saver. I last lost my music collection in 2000, but I may still recover a few CDs I thought had been gone for good."

The broader meaning of AutoRip is about more than just music back-ups, however. It reminds us of the blurring lines between physical and digital versions of "content" products. And that leads you quickly to the question, posed on Twitter Thursday by Scott McNulty:

Now that Amazon is giving people MP3s for the CDs they bought since 1998 (on Amazon) will they do the same for books? — Scott McNulty (@blankbaby) January 10, 2013

The answer is probably no, but not because it's a bad idea.

Many years ago, I suggested to an executive in Amazon's ebook unit a pricing system that went roughly along these lines: if I bought a physical book, let me have a Kindle copy for a dollar or two more. And if I bought a Kindle ebook, let me pay the difference between the ebook price and the physical book price, plus a dollar or two, and get the printed copy as well. The Kindle copy was always stored online in any case (though I've made it a practice to download and store my Kindle books, just as I keep multiple back-ups of my MP3s).

The Amazon executive's response was, to put it mildly, unenthusiastic. He didn't explain in any detail. I speculate, first, that Amazon itself wasn't all that interested. But I'd guess that the chief resistance to any such system would come from the major book publishers, which have amply demonstrated that rational pricing and customer satisfaction aren't high on their collective agenda. Given, also, publishers' ongoing war with Amazon over what they perceive to be control of the industry, they weren't going to do anything to give Amazon's customers any more reason than they have already to shop there.

The publishers – understandably worrying about their fading market and competition from new players – have been more gung-ho about adding DRM (digital rights management) to books than the increasingly savvy music industry, which, years after Napster, realized that DRM was causing at least as many problems as it purported to solve. Amazon's proprietary Kindle format is just more of the same: a way to control what customers can do. In short, it's all a mess.

The terms of service on AutoRip have incorporated some of that messiness, I'm sorry to report. Consider: if you own a CD, you can rip the music easily and legally for personal use. AutoRip's terms of service aren't so simple: for example, Amazon has made deals with at least some music labels (it doesn't say which) to watermark the MP3s so that they can track them should they escape, on purpose or otherwise, onto the wider internet. Moreover, by using AutoRip, you're also agreeing to the terms of service of Amazon's more encompassing Cloud Player. I don't know about you, but I find it insulting to be treated like a criminal.

Onerous terms of service, a standard feature of today's internet, are related to another fundamental problem with all online buying – or, for that matter, anything you buy using a credit card anywhere. As giant companies create mega-databases of information about you and your purchases, and then hand them over (often for a fee) to governments and others who are interested in learning more about you and your habits, two things are happening: you and your data are becoming much less secure, and you are losing fundamental privacy rights.

This seems especially relevant when it comes to books, movies, music and other brain-food that collectively say a great deal about who you are and what makes you tick. We need to create systems that allow anonymous purchasing in this new world – to recreate cash in a digital format or some other method to recreate anonymity.

The institutions that claim the right to spy on us incessantly – namely, governments and corporations – won't like this. But if cash and anonymous buying do disappear, so will a fundamental freedom, and we'll regret it in the end.