Consumers Transitioning from Purchasing to Renting Media

Apple and Amazon, two of the world’s most successful retailers, find themselves struggling in today’s market to increase the sales of books, movies, music, and games because of a shift in consumer priorities. It seems that consumers no longer want to buy media; they want to rent it. The two companies can be considered largely responsible for creating the problem because they made it so easy to rent books and stream music that consumers didn’t feel the need to buy media anymore.

streamingAmazon has been particularly hard hit with the flop of its Fire Phone and little growth in media sales. During the last quarter, the North American sales of media on Amazon grew five percent from a year ago. That’s the lowest year-over-year growth in more than five years for the online retailer.

Amazon attributes the slow growth to textbook sales. Students prefer to rent rather than buy their textbooks, and Amazon made it easy and convenient to connect renters to lenders.

“It’s a model textbook publishers hate, because they only make money on new book sales, which is one reason textbook prices are going through the roof,” Wired reports. With higher textbook prices, more students will turn to textbook rentals, and Amazon will have to find another product to draw higher profit margins.

Apple is also struggling to profit from what used to be one of its most popular offerings: digital music downloads on iTunes. Digital music sales are down more than 13 percent since the beginning of 2014.

Apple had a hand in creating this problem because it made iPhones and iPads that can transfer data at high-speeds optimal for streaming. Spotify, Beats Music, and other music streaming apps might not have come along if Apple devices had not made streaming into a portable possibility.