Why Buy Anything When You Can Rent?
Last week, we talked about changing consumer trends that could stem from the implementation of the Apple Pay System. While we are patiently waiting for that evidence to accumulate, we turn our heads to another consumer trend that has quietly moved into the mainstream: Renting. Many products have been frequently rented over the years, including cars, movies, skis, and more. Society has seemingly always rented those items; but, over the past few years, we have watched as several other items have become available to renters, and the public has responded by reducing the number of products that they own.
Renting textbooks has evolved from a trend to a staple for college students across the country. Why spend hundreds of dollars on something that has extremely minimal use after the conclusion of the semester? In addition to textbooks, you can now rent everything from designer handbags to power tools. So, with the rental trend on the up, what's happening to consumer trends within the digital media industry? Just this morning, Wired published a piece stating how Apple and Amazon are in trouble due to the rental trend.
The irony in the matter is that Apple and Amazon have expedited the trend by offering products that eliminate the need to own. Amazon Instant Video allows users to stream movies, tv shows and more, from anywhere, without actually downloading anything. Users simply pay the fee to rent their media, they stream the media, and then the transaction/experience is over. There is no download, and the user doesn't own the media. In Apple's case, the increase in iPhone users has led to the increase in streaming music as well. Companies like Spotify and Pandora offer a more complete listening experience without forcing users to purchase individual media files.
Both Apple and Amazon have created products that lower their own profit margins. The WSJ reported that digital music sales through iTunes has dropped by more than 13% in 2014 alone. Amazon has reported one of their worst quarters in recent history, but both companies continue to press forward as not to fall behind the trends. It's not like these companies are losing massive amounts of revenue. Apple's newest iPhone release was record breaking, and Amazon still cashes in on every rental (just not as much as they would with sales). Do you still buy products that can be rented? Or, have you become a serial renter to save cash? Please let us know in the comment section below.