It started off like most things do - convenience for the consumer, then it gets sold as cheaper, better for the environment, cleaner, more efficient, better for everyone.
Not to mention, companies love steady, recurring revenue. Renting, or 2-3 "Service" plans are gold, allow for easy access to capital, and an easy way to slowly increase margins and revenue over time.
It was an easy sell for most really. Just down load it to your computer/platform of choice and you can load it anywhere. Sure there were wrinkles with platform issues between Apple and Windows/Android but - we mostly got past those.
But - all you owned was the rights to download or play. There was no physical copy - which was great since there was no way to lose or damage it.
But you can't sell it either, so you own it buy you lost your resale rights - while it was a small detail, some people noticed this. but I for one didn't see the trend.
If you are old like me - you remember having to buy discs with the new Microsoft Office to install, or the New Windows Software with a product key.
You could resell those too if you no longer needed it, or upgraded first and someone was old with an older version. Not anymore, now its basically a rental, or its all cloudbased and you have to pay an annual fee to access. it. Enter Softerware for service.
While you might not get concerned about music or software - this is where business is headed. There is a an effort to remove private ownership of many assets and have individual lease or rent them as needed.
How many of you are eligible for an "upgrade". How many of you own your phone - or do you have a buyout amount if you wanted to switch? I now many people who role into a new phone "rental" or "leased" upgrade every two years, and I can see a time in the near future where you are no longer allowed to Bring Your Own Device (BYOD) on most major carriers.
Most people like this - they don't have to pay $1000 for a phone, they just pay an extra $50 a month for 2 years. The trend continues -
I am sure you have read the same articles, in fact Ford has even said they see a future beyond car ownership
This is already exists in smaller examples like Boat Clubs - this is move toward elimination of private ownership of many assets. The target is always products that have a relative high cost entry, and a high turnover rate given the cost.
What other assets do you own today that may be at risk for this new business model. Businesses love this model because it guaranteed recurring revenue. What other assets are at risk for this trend.
Lets face it, renting costs more. On average it has to, it if didn't, those renting the products would go out of business and run out of capital.
The pull of renting is flexibility and lower initial cost, but at the end of the day, you don't own an asset, and you have nothing left of value. If you go through decades of renting everything - you won't be left much to show for it.
This will also impact your ability to pass along assets down to your family. Sure they may have your user name and password to your music or movie collection, but what happens when the Big Corp gets a copy of the death certificate sent to them and they terminate the account?
I am not a fan of this trend. I want to own and drive my own vehicle.I know I may be the minority - and old fashioned. I know I am already in the minority. I can sell my old phones on ebay for a small amount of money - and they find a life somewhere else. I can sell my car or keep or donate.
@cluelessinvestor - aka a random nobody on the internet spewing nonsense
This post NOT financial advise, it contains my personal opinion and experience and is intended for educational purposes. Perform your own research and analysis prior to making investment decisions.
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