The Digital Renting Business is Fundamentally Flawed – (by @baekdal)

What we see happening is a third party (Apple) jumping in a void left by clueless content creators, at a cost to both the consumer and the content creators.

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The digital renting business model is fundamentally flawed, and we need to get rid of it before everyone forgets why we do not need it.

The renting business model makes a ton of sense in the traditional world of manfacuring and distribution. It’s a win-win situation for everyone.

In a digital marketplace, the cost of manufacturing is zero. Once you have created your “prototype,” you also have your product. A movie studio doesn’t need to manufacture DVDs, because the original digital file can be used directly.

The real answer is two things.

1: Traditional executives have forgotten why they started renting content in the first place. They are just continuing the status quo, doing what they have always done, and generally failing to understand the economics of the digital world.

2: The few executives who do get it, are trying to drive up a false level of demand, by implying that buying a TV show should be more expensive than renting it. They are being greedy, and are using every trick in the book to get you to play along.

The renting business model is a relic from our non-digital past, and back then it solved a real problem in a rather ingenious way. But, the internet has solved that very problem in a much more efficient way.

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