To rent or to purchase?
We rent something with every subscription we pay. While we see renting as easier and freer, it does not necessarily mean we're better off.
“…Hold me now, whoa. Warm my heart…
Stay with me…”
I whistled along with the song as I took myself for a long walk. Thoughts floated in and out of my mind; then one smacked me in the face: I am paying money every month to play songs I already own.
I wrote it down in my notes app and continued my walk. Then I saw a Substack note (in fact, I saw it more than once) about our music tastes forming at a certain point in our lives. My own experience suggests that not only did I form my tastes early in my life, but the degree to which I acquired new music fell off sharply after I graduated college.
So why was I paying a monthly subscription fee to rent songs that sit safely purchased in my DropBox?
Good question.
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Know what you’re paying for
I decided to explore what it would take to play my music library without Spotify. I discovered that while certainly not impossible, playing files you purchased (especially as an Android user) is not the mainstream way of listening to music.
It all comes down to what you’re paying for. It’s reasonable to think that what you’re paying for on Spotify is the music.
Close, but not quite.
Your monthly subscription fee pays for ad-free access to Spotify’s music catalog.1 You’re also paying for the ability to stream that music seamlessly on all of your devices.
The second part didn’t register until I started this exploration. Pre-streaming (otherwise known as the heyday of the iPod), you would purchase music on iTunes,2 use iTunes to play it on your computer, and then plug your iPod into the computer to sync the library on the device with the library on your computer.
I eventually switched to a Zune (yes, you read that right), and the process was the same. I continued with this process through college.
But now that I use Spotify, I value the convenience of seamless streaming more than the access to the music, as I already own most of what I play.
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Understand what you get and what you lose
This boon of convenience and everpresent access comes at a cost — and I don’t mean the $10.99 that automatically comes out of your pocket every month.
If you decide not to pay your subscription, you lose your pseudo-ownership access to that music. You now have to suffer through ads because they pay for your ability to stream the music. You’ve also lost many of the choices that come with owning your music, like skipping as many tracks as you damn well please.
And whether you realize it or not, your subscription doesn’t guarantee access to a song on your playlist indefinitely the way purchasing a song does. Licensing rights could change, removing a song from Spotify’s catalog, or Spotify could further limit what you can and can’t stream to force you to pay more.
Choosing to rent your music also comes at a cost to the artists who make the music. According to Discmakers.com, “one stream on Spotify pays about three-tenths of a penny — that means 1,000 streams pays $3.00. To put it a bit differently, you would need 3,000 streams to make $9.00, about the same profit you will make when you sell one CD at a concert for $10.00.”
The group making out the best in this rental arrangement is Spotify. Unless of course, you value the lack of friction that highly — and many of us do.
Which tether do you prefer?
Our affinity for renting comes from the belief that it makes our lives easier and freer. Don’t want to take the time to sync music libraries? Not so into vehicle maintenance? Can’t find a place to store those skis? Renting sounds great!
In some instances, there’s genuine value in renting. In many, renting makes us feel freer when, in reality, we’re just as tethered and possibly worse off financially and culturally.
I did the math for Spotify. Yes, it makes listening to music frictionless. I feel free seamlessly shifting from my computer to my phone to take my songs on a walk.
But they aren’t my songs. I am not free to move them (and my playlists and my data) somewhere else. I may not even be able to access all those songs somewhere else. If I want to keep accessing these songs as I’ve become accustomed to doing, I must pay for them. Over and over again.
If I live to be 100 and Spotify maintains its current $10.99 subscription rate (*dies laughing in the corner*), it will cost me $8,967.84 (plus taxes) to maintain access to Spotify’s catalog. I’m essentially buying my music repeatedly instead of buying it once. I’m also aware that I’m underpaying the artists my repeat button would lead you to believe I value.3
So the question is not what removes the tether but what tether would I prefer: the tether to the company that gives me access to something I rent? Or the tether that comes from caring for something I own?
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Single-use vs. perpetual rentals
Renting has a place and can deliver terrific benefits, provided you’ve considered your situation and what you value.
Start by recognizing whether you’re considering a single-use or perpetual rental.
For example, if you click over to Prime Video and select a movie you’d like to watch (and it’s not available on Prime), you’ll be given the option to rent or purchase that movie.
But you aren’t purchasing anything. You’re either renting the movie once or renting it perpetually. If you leave Prime, you won’t be able to take the movies you “purchased” with you.
You might rent a movie once if you’re confident you won’t want to watch it again. If you perpetually rent a movie you watch frequently, you will have to “purchase” it again if you switch platforms.4
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When to rent and when to purchase
Here are three questions when considering whether a single-use rental, perpetual rental, or outright purchase is right for you:
1. Do you want to try it?
If you want to try something, renting is perfect, particularly if there’s a route to purchase what you’ve been renting should you move past the exploratory phase. Examples include instruments and sporting equipment.
It’s fair to ask if you might (accidentally or otherwise) damage whatever you’ve rented, in which case it’s worth doing the math to see if purchasing takes the pressure off of giving the experience a try.
It’s also worth setting the runway. When do you need to decide whether or not to make a purchase? At what point is the perpetual rental costing more than the value it provides?5
2. How often will you use it?
If you never plan to use it again, renting may be your best bet. I think of things like prom dresses, tuxedos, and wedding dresses.
Keep in mind that while you might only wear your wedding dress once, you might want to pass it on to your daughter. It’s a gamble, but that doesn’t mean you shouldn’t ask yourself the question.
For things you only need once in a long while — or for a unique circumstance — renting may be a better choice than purchasing. Think renting your skis for your annual ski trip, renting tools like carpet steamers and power washers, or renting a van for your move. Even renting (known as leasing) a car can be a good option if you don’t drive often or far.6
You can also apply this thinking to storage.7 Sometimes renting is the only way to gain sufficient space even if you aren’t doing it short term. It’s worth asking if what you're storing is worth the perpetual rental you’re paying on top of whatever you paid to own the stuff in the first place.
3. Do you want total freedom in how you access it and what you can do with it?
Our things — right, wrong, or indifferent — play a part in how we express ourselves. If you want to customize your snowboard with stickers or write notes in the margins of your books, you may want to purchase those things. The value of making it yours counts.
This question may also change how you think about perpetual rentals like your Spotify or favorite Substack subscriptions. Where you may determine Spotify isn’t worth it, the perpetual rental of access to your favorite Substack is worth it because you want access to every new post and the ability to go through the archives.
Those archives raise another consideration: how important it is to have the item with no fear of ever losing access to it?
Leaving Spotify
In my case, the perpetual rental of music I’ve already purchased makes little sense. I’ve already cleaned my music files in DropBox and identified a suitable music player for my phone. I have software that can play music on my computer, but I’m strongly considering sticking to my phone as my only music-playing device because it’s what I use 95% of the time already and it’s always within reach.
If I make the switch in July, I will have $54.95 (plus tax savings) in my budget to put toward purchasing any songs I don’t own. I’ll likely be able to buy anything new I’ve gathered while using Spotify, start next year without this line in my budget, and continue to enjoy all my music everywhere I go.
If you're a business leader, think about what you're asking the people you serve to do. Do they purchase or rent with you? What value is that structure centered on? Does it actually deliver that value? Does it help or harm other people involved in your business? Does it shape a world you and the people you serve want to live in?
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Currently, Spotify boasts access to over 100 million songs.
Or, you know, pirate music on Limewire and Pirate Bay. Let’s all be honest — we’ve done it. Being a broke kid is a thing.
And they plan to pay artists even less next year, according to Billboard.
You can see some of this at play with SaaS but in reverse. Technically, if I bought the software, I could cut subscription ties with the platform and continue to use my software. But out-of-date software doesn’t get you very far, so you’d need to purchase a new version reasonably in time with the other individuals and groups with whom you work. It’s likely worth having the most up-to-date version.
I’m blown away that companies have created a way to identify subscriptions you’re paying for but have forgotten about. How does that happen?
Me. I put 320 miles on my car in a year. While I appreciated going through the process of buying a car, I would have found leasing more valuable.
Digital storage presents an interesting circumstance in that it highlights that sometimes, what you’re paying for is expertise you do not have. I could skip cloud storage and keep everything locally, but then I couldn’t access my files across all my devices which would make doing my job more cumbersome. I could set up servers in my apartment but I don’t know how to do that or take care of them properly, so I consciously choose the tether of a DropBox subscription to keep my files somewhere I can get to them.