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Of course Google takes on Spotify and Pandora — it’s a pay as you go world

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Today at Google’s Developer Conference (IO) the crowd was treated to the announcement of Google Play, the brand new service that offers a Netflix-style access to music content for as low as $9.99 per month. The announcement rocks the world currently dominated by iTunes, Spotify and Pandora. Google Play offers not just access, but the means to build playlists, charts and recommendations. The interface looks great and not at all like a 1.0 product.

This is a trend

This is yet another example of the ability to rent rather to own the things we consume, a lesson that business needs to giving its close attention. This isn’t locked in software or entertainment content as we watch companies like Uber spring up and quickly gain traction amongst those who realize they can save enormously by not owning a car.  Many cities now have bicycles that can be rented from public bike ‘yards’ and ridden just one way and dropped off, like the very successful Velo system in Paris.  People are waking up to the idea that we can rent many of the things we currently own and that ownership is a burden of storage and maintenance, whether for a car, movies or music.

It’s the services, too

In the IT world, we see this through the very rapid movement toward SaaS software that charges a monthly fee and typically can be upgraded far more often and more easily than on-premise software. People don’t buy SaaS subscriptions simply for price…they realize that they stay on the leading edge of innovation without constant internal turmoil.

The same goes for Netflix, Google Play and other services that offer monthly subscriptions. Each offers a host of services, from playlisting to recommendations that provides value well beyond access to an enormous amount of content. Netflix is as much a recommendation engine as it is a content provider. Those services can easily be an enticement away from the old model and in fact, we expect to see the services become the differentiator of brands more than the content.

The concept of a ‘rental movement’ has the potential to significantly change the marketplace. So much of our world is based on ownership that we don’t often stop to think about what that ownership really costs and how much of the services we need to self-provide.

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