Subscribing to Things

The transition from owning things to subscribing to things is going to be hard until there is widespread market adoption and greater choice. Consumption is central to our economy and the only way we know to consume is by owning things. However once digital distribution becomes seamless we can subscribe to whatever we need to consume whenever we need them.

This article was first published in The Mint. You can read the original at this link.

As regular readers of this column will attest, I have often argued in favour of shifting our thinking, in the digital context, away from ownership and towards use. But as much as I believe this is the direction we should be taking I will be the first to concede that the journey will not be easy.

We Consume therefore We Own

Ever since Adam Smith, the notion of consumption has been central to our conception of economic growth. As a result, notions of ownership have shaped the way we think about regulating all property - be it tangible or intangible. Now that it is possible to efficiently distribute digital goods using online platforms, I believe that it is time to question the need to continue to regulate digital goods using the same paradigm.

We no longer accumulate collections of CDs, vinyl and tape since everything we want to listen to or watch is available online through streaming media platforms. For a flat monthly fee, we can access all we want to consume and, even though we own none of this content, it is available on demand whenever the fancy strikes us. If we have so fundamentally changed the way we consume content does it not make sense for us to rethink the way we regulate it.

I’ve argued in favour of thinking outside the context of current intellectual property law in order to build a framework more suitable for our digital context:

We will need fresh thinking in intellectual property law to allow for the creation of content outside of traditional frameworks of publishers, record labels and film studios. We will need frameworks that allow us to benefit from the advantages that digital platforms offer while continuing to make it economically viable for artists, musicians and film-makers to produce content. We will need a new approach to liability that allows platforms that aggregate service providers to do so without incurring the level of liability that is currently reserved for owners, while at the same time ensuring that standards of safety and security that are currently imposed on owners are appropriately addressed in any new framework. 

Planned Obsolescence

One of the immediate benefits of this is likely to be the gradual elimination of planned obsolescence in consumer facing technologies. For decades we have purposely retarded the pace at which technology advances because any science that extends the life of of a product comes in the way of its increased consumption. In an earlier article I spoke of the Centenial Bulb at Fire Station 6 in Livermore, California that has been functional for over a century as an example of what can be achieved if manufacturers took full advantage of existing technology.

But as society begins to favour renting over owning, obsolescence will become less relevant. The higher utilization brought about by the greater availability of specialised services will allow better, more long-lasting technologies to be deployed. The software industry was the first to embrace this change but we are already seeing how this could spill over into other sectors:

A decade ago, we would have been hard-pressed to conceptualise how we might effect the same sort of transformation in the world of physical goods. In the past few years, companies like Airbnb and Uber have shown us that we no longer need to own stuff if we can build business models that allow us to access them whenever we need to. And, while these companies have been reviled for operating on the fringes of the law, they have managed to change the way we think about physical assets.

Subscribing to Things

It is for this reason that suggested that we try and extended these notions into the physical world. I was particularly convinced about the need to do this in the context of urban mobility, where on-demand urban transportation services is forcing us to rethink vehicle ownership now that mobility is reliably available as a service. It was my belief that India is particularly well suited to take advantage of this given our low per capita ownership of cars.

We don’t own as many cars per capita which means that, unlike the US, India has no tradition of car ownership that will come in the way of the transformation of mobility. To the contrary, younger generations of Indians will probably leapfrog vehicle ownership entirely, choosing to depend on ride-hailing rather buying a car. All of which will serve us well as we transition to our inevitable autonomous future.

But despite my enthusiasm to see all this come to fruition, I am conscious that the transition from an ownership-based economy to a use-based one will be fraught. Early signs of how this might play out are already starting to become evident in the consumer goods space - an industry that has quite the reputation for exacting an extortionate price for their consumables (just think of how much you spend on replacement razor blades or ink cartridges). For companies like these, the ability to legitimately deploy a subscription model is exactly what they have been waiting for all along - an excuse to implement technology measures to enforce adherence to subscription contracts.

Take the example of Juicero. Three years ago it was all the rage in Silicon Valley when cold press juicing was the latest fad. Juicero Press was a wifi enabled machine that extracted juice from single-use sachets of pre-cut fruits and vegetables that customers procured through an exclusive “farm to glass” subscription service. It used QR codes to ensure that the packet had not expired and remotely disabling Produce Packs in case there was a reason to recall it. But Juicero turned out to be more hype than substance - its QR code based subscription model little more than a novel way to lock customers in.

This story has played iself out time and again in different contexts. Expresso machines have been designed to only accept coffee pods distributed by the manufacturer, enforcing this obligation by embedding proprietary technology into the design of the pod. The smart lighting systems have had their firmware updated to only accept bulbs from approved vendors. Printers will now stop printing after you exceed your estimated page count unless you pay an additional amount for every subsequent page you print.

As we transition from owning things to subscribing to services, we will most likely see more technological fetters like these being applied to ensure that the terms of subscription contracts can be strictly enforced.

At first these restrictions will chafe - particularly considering the price at which these early subscription services are being offered and the unfortunate lack of choice. But in time, as digital distribution becomes more widely adopted, I expect that market forces will start to come into play. This will ensure that these services are both more affordable as well as widely interoperable.

At which point in time our unfortunate preoccupation with consumption can finally be laid to rest.