There are enough jokes online about unreturned, overdue library books. In our present times, though, ‘library’, ‘unreturned’ and ‘overdue’, all sound like vestiges of a different era.
With physical goods like home, car/bike, furniture etc. we started by buying them outright. We wanted to own them, for life.
Then there was a massive change in the system given an increasingly higher cost of acquisition. We moved to leasing or renting those products. So, home on rent, cars on lease and so on.
At one point, thanks to Uber and the likes, car ownership itself was on the wane, till the pandemic upended that notion and made us consider getting back to our own cars, for the sake of avoiding shared spaces and safety from the virus. But that queasy situation has given rise to newer models of car ‘ownership, one that even industry leaders like Maruti-Suzuki are exploring actively – cars on rent/subscription.
Furniture on rent is already here, with brands like Furlenco or Rentomojo.
We now even have clothes on rent, something that was unimaginable a few years ago.
Now, when it comes to digital goods, we started by mimicking the model of the physical goods – buy them outright, or ‘download’ them in our physical drives. This was the equivalent of buying a CD, cassette, videotape or DVD.
Then, we started renting them out, at least movie titles. Netflix started as a movie tape rental service.
Now, because of improvements in internet speed and predictability of access, we don’t own any digital media, quite literally. They exist in a cloud not owned by us, and we simply access it on-demand. We cannot download them legally/legitimately on our own hard drives, and even the offline download option on Netflix or a Hotstar is time-bound.
Ditto with music on streaming platforms.
It’s almost like the library now has the power to take back their books on their own. Or, the books that we borrowed will automatically vanish from our virtual shelves after the period of hire expires.
That’s the case with every song we purchase digitally on any streaming platform, every movie we pay for (viewing) on any streaming video channel, and every book we ever buy on Amazon Kindle.
We moved from physical asset-light to digital asset-light even though, technically, we need not have.
The move from owning physical assets to renting them was because of criteria like cost of ownership, the need to have the physical place to store them and to have the option of changing them as often as we want, not constrained by the cost we pay to acquire them.
With digital assets, technology has helped us have more and more digital storage space. Phones these days come with default 256MB storage space, though that is not necessarily intended to store digital files forever. It is to be able to rent more digital files and download more apps.
Then, it all comes down to the cost of ownership. That model of production-to-purchase is the biggest change, both in physical assets/goods and digital assets/goods.
What the producers used to get while making physical goods was drastically reduced because of industrialization and machinery. Even then, for reasons beyond the cost of ownership, we moved away from asset ownership to an asset-light model.
With digital goods, there is almost no option to own anything with everything going into a cloud despite storage space increasing dramatically and becoming very cheap. As a result, digital goods that deal with art have been devalued when compared to what their producers used to get earlier when they were being sold via physical media meant for physical ownership.
So, musicians get far less from streaming platforms than what they used to get when physical media was sold. And they are forced to make up for that loss with live gigs and other merchandise.
Movies are now testing pay-per-view because there is no option to release them in theaters owing to the pandemic. The model of releasing them on OTT platforms where the producers get a flat fee is curtailed by the amount the OTT platform can muster from its content acquisition war-chest.
At some point, I do expect movies and TV shows too to take the rental model. Instead of framing it as ‘pay-per-view’ and enabling a user to view it once, a different framing could be renting movies, which could appear different from pay for one view (as pay-per-view indicates). Apple TV+, for instance, already has this option, and the rental pricing is different from the buying price.
When you rent a movie from Apple TV+, you have 30 days to start watching it, just like a timeline given to you by a physical library from where you picked up a printed book.
As soon as you play your rental, your rental content is available only the next for 48 hours. And your rental automatically deletes from your library 30 days after you rent it or 48 hours after you start watching it, whichever is sooner!
Streaming platforms could add a new model alongside unlimited streaming libraries for both digital music and movies IF the content producers start looking at a different model of consumption for end users.
Right now, they sell the title outright to platforms (who have the upper hand in the equation) for a flat fee and then recurring amounts (that are consistently very, very small). But, if the negotiation included an option to make the digital content available on rent, they could still show up in a search (discoverability), but instead of offering them up for consumption on a very, very low royalty fee, they could be offered for rent that comes with an expiry date.
So, in music renting: if you play that playlist again (which has a song that can only be rented and not simply streamed with the flat fee you pay for the entire platform), that song should again be rented to you for a period of time, at a slightly higher rate that is still lesser then you buying that song.
In movies renting: the Apple TV+ model. Cheaper than buying, slightly costlier than paying a flat rate for ‘n’ number of content every month to the platform, but opens up a better quality of returns for the producer of the content.
In books renting: this is already happening, much to the annoyance of publishers because they are comparing the fee charged for renting versus the outright sale of the book. Except for Amazon’s Kindle Unlimited, flat-fee-read-all model is not very common in books, the way it is in movies and music. So a renting model works better in the absence of people buying the books.
Software renting: this already happens, with software like Microsoft Office 365, which we subscribe. Apple is able to offer its equivalent software for free because they charge a hefty premium for their hardware that is part of the larger ecosystem they own. For most other software than can run out of the cloud, a rent (or call it a subscription) model seems more prudent.
This is one of the few ways content producers could get a slightly better deal than what they are getting now. The same deal, for movies, where we are completely spoilt by paying a flat fee for all those movies produced for mega-bucks.
But, the power to accept such newer models of digital content distribution right now lies with the all-powerful platforms.
The irony here is that when we buy a digital product and it resides in the cloud for us to access wherever we want, we haven’t actually bought anything at all. The rules are clearly skewed towards a model where we are simply accessing it each time from a remote server that’s owned by the platform. So, we might as well drop the charade and call it ‘renting’ and charge ir appropriately so that at least the content owners gain, in times of rampant piracy and devolution of content value.