Netflix, Amazon, Tesla… Behind the subscription and rental models, customer backlash

The 2010s ushered in the age of access: whether through subscription or rental, consumers gradually got into the habit – and even decided – to dispense with the ownership rights that the manufacturer transferred to them when purchasing a property. In other words, the use value of goods and services has gradually displaced their exchange value.

Services as diverse as audio or video streaming have thus developed (rental of a catalog that is only accessible as long as the user subscribes to the service – Netflix, Spotify, Deezer, etc.), the access to a vehicle at any time (Uber ), clothes (Le Closet, Rent the Runway) or even rental of washable diapers (Popopidoux, Coco layer).

In addition to the access to the item itself, there has also arisen, thanks to the Internet of Objects (IoT for “Internet of Things”), which refers to the connection that can be provided to any type of object to connect to other objects or application systems ), more and more refined access to certain properties of the asset.

Recurring income

This generated new types of business models, directly inspired by smartphones and their ecosystems of mobile applications (I buy my smartphone and then I buy applications from the manufacturer or other companies that will increase its utility value). For example, car manufacturers now offer on-demand options that are only available by subscription: the customer buys their vehicle and can then decide whether to activate the heated seats or steering wheel, the autopilot, etc.

This type of business model has several advantages. For the companies, it primarily ensures recurring and additional income (the money continues to come in after the sale of the property). Customers, for their part, can test options, check their suitability for their needs (applications) and gradually enrich their property according to the evolution of their income or technical progress (subsequent purchase of options that are unaffordable or non-existent at the time of purchase) .

Finally, the environment also has something to gain from it: a simple update during the life of the product makes it possible to improve it, extend its existence or correct any faults without necessarily having to replace it, which is much more environmentally friendly.

Help, my door won’t let me out!

Described in this way, such products and business models seem like a panacea in light of the problems that can undeniably be solved by increasing their utility value. However, they contain many limitations, some of which remain highly underestimated. However, the latter may be the cause of what we described in a research article published in 2017 as the destruction of value for the customer.

First, not all customers are ready to hear that the product they have purchased is complete, but that they can only get full use of it if they pay again – potentially for the entire life of the product. In addition to the fact that this point is not always very clear at the time of purchase, this contributes to increasing the level of limited spending, not without consequences for the purchasing power and the level of consumer debt.

This then brings about a radical change in the relationship between a customer and their supplier. Despite a transfer of property rights from the second to the first, these economic models create asymmetries by giving very strong power to the supplier.

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Philippe K. Dick illustrates this perfectly in his novel Ubiq. Written in 1966 and published in 1969 in the US, he describes the grotesque situation of Joe Chip, a technician whose debts are such that he can no longer leave his home and no longer has the necessary credits to pay for every opening and closing of the door of his residence. A delightfully absurd dialogue ensues between him and… his door, the latter being automated and equipped with speech (and the ability to make decisions) thanks to an artificial intelligence.

Surreal? Pull your hair? Probably not when we know that as early as 2020 Tesla has remotely withdrawn an autopilot functionality from an owner who bought his vehicle used on the grounds that he had not paid the manufacturer for this functionality when the purchase from the previous owner – who had acquired it anyway.

In 2020, the manufacturer Tesla removed an autopilot functionality from a vehicle owner.
Matti Blume/Wikimedia, CC BY-SA

Similarly, Amazon has previously removed books from certain customers’ Kindles. The question is therefore how far companies whose income is based on these economic models can go.

These transformations are therefore accompanied by a double necessity. Firstly, more transparency and clarity from the companies. They no longer have to limit themselves to an accumulation of pages with terms of use, formulated in abstruse terms that their customers drown in, but on the contrary, clearly explain how far they can go in relation to changing the product after its purchase – or during its purchase. rent.

unlikely situations

However, this transparency cannot avoid a simultaneous increase in regulation, which seems significant for at least two reasons. The first, to avoid situations as extreme and (seemingly) improbable as the one experienced by Joe Chip, but one cannot help but believe that they might well arise one day.

Imagine a building on fire that refuses to let its occupants out on the pretext that they would not have enough to pay for the opening of their door! The second reason relates to access to personal data, which companies depend on for their current and future offers, and which provides information about behaviour, preferences, uses, etc. of their customers.

In addition to the risks associated with hacking or leaks, this data used in the context of usage-based economic models must be subject to increased protection and returned to customers when they request it, with the risk that companies will not use them to further lock their customers into their utility ecosystem – causing major competition problems. You just need to change (or try to change) music streaming service and will rearrange your playlists or other lists of albums to understand the nature of the problem.

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