Daily Dose of iQ: Apple and Amazon's Content Conundrum - People Don't Buy Anymore

Oct 28, 2014 — Diana Thomson

WIRED published an interesting article yesterday (Oct. 27) on changing consumer spending habits. Author Marcus Wohlsen talks about how consumers don’t want to buy media (books, movies, music) anymore –- they’d rather rent. This is a problem for content providers like Apple (i.e. iTunes) and Amazon, he says.

Consumers are buying less media, opting to rent, stream or subscribe instead.

I can relate to this consumption shift.

For music, I typically spend my entire day streaming music off of a free website. This allows me to learn about new artists; it's instant, and it's free. It is more of a discovery tool and only if I am really invested in an artist will I complete the purchase on iTunes. Which I still do, just not nearly as often as I used to.

I typically would purchase one song, however I have actually noticed that I am purchasing entire albums rather than single songs, once I find a band or artist that I am invested in. I have done trials of streaming sites that have monthly fees, but I have never actually committed to becoming a paying subscriber.

As far as television goes, I use Netflix just as often as I watch my PVR’d television. The only reason I am currently paying for television is to have the most current seasons that I can record and watch when my schedule permits it.

With streaming services like Netflix, you can choose what you want to watch, when you want to watch it.

That is another convenient thing about streaming services. You choose what you want to watch, when you want to watch it. It's instant and I much prefer this option.

I discovered recently that I could purchase the entire season of Walking Dead Season 5 on iTunes, which is tempting, except that I don’t want to own it. I would much prefer to have the option to “rent” an episode that I may have missed rather than having to purchase the entire season to get the most current episodes.

Wohlsen also makes an interesting observation in his article: Apple enabled this change in consumption. Its hardware (specifically mobile devices like iPhone and iPads) allows users to sidestep iTunes/Amazon in favor of streaming services like Netflix (for TV and movies) and Spotify (for music) –- again, “renting” instead of buying.

I'm not aware of any "book streaming" services (outside of public libraries that allow people to read e-books instead of buying them on Amazon, but I would suppose there is a market for that too.

Apple has invested in streaming and Amazon has moved away from just books -- both companies are adapting to changing times.

So what's the take-away here?  Essentially, Amazon and Apple are facing a shift much like Blockbuster did years ago. Content consumption is evolving away from a purchasing model to a renting or subscribing model. It's important to note how Amazon and Apple are dealing with these problems.

With Apple’s investment in streaming, as well as Amazon’s movement away from books as its main focus -– these companies are not actually losing money at all, just in one particular area each. Adaptation? I guess that is the important take-away. Foresight and adaptation.

Topics: Wireless Trends, Mobile Industry, Customer Experience, Retail Marketing

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