It seems that every so often I hear that the subscription model for music is dead. They could be right and they could be wrong. I don’t know. But the reasons they give are often… curious. The biggest is the question of “why rent music when you can buy it?” and absolutely fail to address the most obvious answer “Because I don’t want to have to buy a song to listen to it.” They talk about how if they stop buying music, at least they’ll have something to show for it. For me, at $13 a month, why should I want to stop buying music.

The argument is not dissimilar to saying “Why get cable when you can just buy DVDs?” The answer is because they offer two different services. I could be wrong, but honestly, I think that there is room enough for both. I think that the rental market will actually only get stronger as we can stream (and temporarily save to play) music in more and more places.

This is where I think DRM could (finally!) prove to be a very, very helpful thing. Consumers hate DRM because it’s putting a limitation on what you believe you have bought. Vendors like the control.

Where I think the disconnect primarily exists is that vendors like to pretend that they’re selling the product (and they price accordingly) whereas customers object to the idea of renting something at the whims of a big corporation with a pretty shoddy track record.

What I would like to see happen is that the vendors own up to the impermanence of DRM-crippled art. They should make the DRM restrictions tighter… but should charge less for the product. And they should call it the rental that it is.

The most recent example is the eReader, most popularly the Kindle. Amazon is in a tight spot because in order to get the publishers on board, they have to crippled their wares. But this inherently creates transient ownership of the product. They absolutely, positively cannot change the latter. But if they take ownership over the latter, we might be getting somewhere.

What I would like to see is Kindle and the publishers come up with a library model. Or a Movie Shack model. If they acknowledge the transient ownership, it’s possible that they could get the publishers on board with lowering the price. It longer competes with an actual book sale.

Ideally, they’d do something like what Rhapsody does and offer a subscription rate. You can rent all the books you can read for a flat monthly fee. Then they’ll allocate the money by which rentals were the most popular.

There is simply no way that I would buy a Kindle with their current model. And I can’t imagine the publishers signing on to any sales model that would be enough to generate my interest. But I could definitely see buying one for Clancy for rentals.


Category: Market

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7 Responses to Own To Rent

  1. logtar says:

    My wife loves to read, its also a collector tendency of hers and the main reason she does not own a kindle (I think she should.)

    What I would find very interesting would be a pricing model that lets you rent to own books, but from digital to print. So you read the book on your e-reader but you loved it… give me a discount on the book so I can have it.

    I think we are really in an exciting time where art is changing once again and becoming something for everyone rather than for a few that can afford it. I think availability and access will make price somewhat fair to the artist and the person enjoying the art rather than just profit for a middle man.

  2. web says:

    We might as well add the Kindle to the list of devices covered by this comic strip.

    Part of the problem, as you say, is the abysmal track record of the big companies. Unfortunately, I think they’re too far gone – they’ve screwed the pooch so hard, so often, that the consumer rightly says “Oh Hell No” when it comes to their latest offering.

    Part of the problem is that the “rental” offering, and more to the point the “trap” necessary to keep them from becoming permanent, invariably collides with the ability to use older purchases. It takes a number of hoops to convert previously-purchased DVD content to run on many modern media-player devices (even devices that come with conversion software in the package). Disney’s “we’ll give you a locked digital copy to put on your iPod” model just tends to look stupid – sure, I can put that “copy” on one device, once, but given that the “locked copy” can only be used once, and the average lifetime of and iPod is ~18 months before it’s dropped, stolen, battery dies, etc… no way.

    I can’t use my previously purchased PDF’s on the Kindle. I can’t use freely available PDF’s published by the author for free download or that I have made myself (a copy of my tax return, for example) on it. Why? Because the Kindle is locked down to prevent that. If you didn’t “buy” it from the Amazon store, it won’t work on the Kindle.

    People don’t like locked-down devices that only work with a specific vendor (like the Kindle). They don’t like devices that are wholly incompatible with what they’ve already bought, when there is no technical reason they should be.

    But most of all, the “rental” model screws the fundamental premise of commerce: the First-Sale doctrine. When I buy a book, I can read it and then give it to someone else, or sell it to an outfit like Half-Price Books, or donate it to a library. Your “rental” model short-circuits that.

    Now, there is an area where your model has made inroads. In the video game market, all three consoles have download services. Of course, two of the three offer a free playable demo of just about any game that could be purchased (something I argue is far more important to the model that makes their stores work), and they keep the prices reasonable (around $20 or so). Even at that, however, a lot of gamers have their worries about managing to archive their games; the consoles only have so much space, and eventually either the console will die, or the company will shut off the authorization servers, quite plausibly making the game not work.

  3. trumwill says:

    Logtar,

    I’m particularly partial to the Zune model, where you pay for a subscription service (renting, in essence) but every month you get 10 downloads (owning). Not sure that would work in the book industry since right now they’re not willing to go DRM-free as the music world did. I like your idea for books. A physical book is not less convenient compared to a digital one in the same way that a physical CD is less convenient than an audio file.

  4. trumwill says:

    Web,

    We’re talking about two different kinds of “rentals”. What I’m advocating is actual rentals; what you’re talking about is the pseudosale rentals that they’re talking about now.

    If the content providers were simply up front about the transience of your possession of the work, and if they priced accordingly, rental offers a potential boon for everybody. The problem with your PDF files is not that it won’t work on the Kindle, it’s that you believed you purchased it (and paid accordingly) when you didn’t.

    Regardless of your feelings towards RealNetworks, the Rhapsody model is one of the easiest and most satisfying models out there. No one is being misled. If they go out of business tomorrow, I lose nothing that I believed I already had (as opposed to if Amazon discontinued the Kindle). I can’t be cheated. And in the meantime, I have access to hundreds of thousands of songs to listen to.

    The biggest problem with the Rhapsody model is the limited scope with which I can listen to the music (and even there I have options I simply haven’t availed myself of). But that’s a technology problem. As WiFi availability increases and new gizmos come out, I can envision a future where owning the music is redundant for me and a lot of people. Why pay $1.30 for a song when I can listen to it in the car, on a portable player, or in my house?

    Likewise for novels. If I have a subscription to a library service and can “check out” the book when I want to, why would I feel the need to “own” a digital copy? Likewise for movies. If Netflix had a better digital selection (and they’re getting there), the need to own the DVD decreases considerably.

    If content providers don’t want to give people complete domain over what they purchase, and they don’t (for good reasons as well as bad), then they need to stop pretending that they’re selling it. Consumers need to stop expecting (and paying for!) pseudo-ownership and the rights thereto.

    The ownership model is based on the physical ownership of things. To own a book, a VHS/DVD, and so on. As that ceases to become the case, I believe that people need to rethink how we’re going about it. We no longer need to own something to have super-easy and convenient access to it. To the extent that this remains the case, it’s a technological problem within striking distance of being solved. After that, the only thing left is for prices to come down, but even there having a $200 rental device isn’t outrageous. Unfortunately, right now buyers are fixated on ownership and sellers are fixated on sale rather than rental prices.

  5. web says:

    Will,

    The PDFs I paid for (or made myself, or was given for free). I “own” them in the sense that I can do what I will with them – I can space-shift them to CD/DVD, I can put them on a flash drive or another hard drive, and I can view them on any device with the ability to read the PDF format. I, in fact, “own” them in that sense. My objection to the Kindle is much more like my objection to earlier “media player” devices from Sony that only read Sony’s “ATRAC” music format rather than the standard MP3 format.

    As for the rental idea, I think you’re missing the point – with Netflix, for example, you are renting something that someone else owns. Netflix is the owner of that DVD that you’ve paid them to rent for a while.

    At the end of the day, rental can’t exist without ownership. Digital file reproduction makes scarcity harder to enforce without the artificial scarcity imposed by DRM, in much the same way that printing presses made scarcity much harder to impose as opposed to the day when each book had to be hand-written, but the consumer is (mostly) going to prefer to OWN, so that they can enjoy at their leisure with minimal hassle, the product.

  6. trumwill says:

    As for the rental idea, I think you’re missing the point – with Netflix, for example, you are renting something that someone else owns. Netflix is the owner of that DVD that you’ve paid them to rent for a while.

    For DVD rental, sure, but not their online/XBox services. That’s a case of rentals occurring without (physical) ownership. As is Rhapsody. All you need is a vendor to have the IP rights to rent out digital copies. And if you don’t want to stream, there’s no reason you can’t have DRMed files the become inoperable after a specified time if/when you discontinue service. Rhapsody used to do this and I believe that Zune does now (in addition to the MP3s you get with the service).

  7. trumwill says:

    Regarding the PDFs, I misread what you said and thought that you had purchased DRMed PDF files or something (I’m relatively ignorant of the non-free PDF market because all my PDFs are just docs I downloaded for free). The inability of the Kindle to read unDRMed PDF files is another reason that I am disinclined to own one.

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