[Sigia-l] Buy or rent?

[Skot Nelson]

On Feb 16.2005, at 12:45, Manu Sharma wrote:

> Ziya:
> "I wish this episode could open up a substantive discussion on issues
> concerning the 'rent' model, and not just for music."
>
> Since buy vs rent is an old problem and has little to do with
> technology,

also a problem for which jurisdiction is key: laws on copyright 
materials vary by jurisdiction, and what constitutes a "buy" in one 
zone may, in fact, constitute a rent in another.

in canada, copyright law is fairly straightforward with respect to 
music, for example: fair use means you can make copies for personal 
use. this sparked, as you may recall, substantial controversy over the 
issue of P2P file sharing: a (far too brief) summary of the court's 
opinion: if you own it, there's no problem with you copying it over a 
P2P network - ergo, P2P is not - in and of itself - illegal, even if 
some of the activity on it may constitute theft.

> Can we rephrase the question as: How do you design systems that favor
> customer *loyalty*?

This is a much better question than Ziya's. Sticky was a very trendy 
word that has long since been transformed by that very trend.

loyalty has been a goal of commerce since day one: this is part of the 
reason why merchants haggled in antique markets, why stores still 
haggle today and why bands like U2 and directors like Wes Anderson 
demand high fees: loyalty.


> By forgetting about stickiness, and delivering such exceptional value
> over other competitive products/services that customers keep coming
> back for more.

Value is but one way, and im(not so)ho the easiest way to engender 
loyalty. wal mart has tremendous loyalty, although their products are 
not regarded as generally high quality.

> At least this is one of the lessons I take from the Google vs Yahoo
> approach.

I like this parable very much. Despite the fact that a friend of mine 
was marketing director for a while, i was never a yahoo fan for the 
reasons outlined.

in general, i'd rather rent services but buy products. music is a 
product. search is a service. renting services means that if a better 
service comes along, i have the option of moving.


--
Skot Nelson
skot at penguinstorm.com