While it has been decreasing in a lot of places (rather than own certain products, we now enjoy them as services), in other virtual domains, the possibilities have been increasing as well.
These are the trends that I see happening in these areas (this is an excerpt of my trend e-book, which you can read here):
Increase in ownership
When it comes to digital assets and information, we are definitely seeing an increase in ownership. Whereas virtual goods were seldom unique and easily copyable (and so commercially uninteresting), we now have the non-fungible token (NFT) trend that allows people to really own unique pieces of digital art like a Bored Ape or apparel like a special Balenciaga bag in some metaverse (which we will discuss in the next point) game.
The interesting part about this type of Web3 products and services is that they will also change the nature of ownership itself. NFTs, for instance, are basically pieces of “if this …then that…” code that can even be programmed to change. And that is very different from other virtual products which are static in nature. If you buy a song, a movie, a book, concert ticket, they will never change, but an NFT could. One of our ‘Web3 Tour’ speakers at Christie's told us that she had bought a visual that changed along with the seasons. A gimmick, of course. But what if you could buy the concept of "the most popular virtual dress in Asos" as some sort of subscription NFT for your avatar, where your attire would change along with fashion trends? Products could become fluid, adapting to their context, which is a truly fascinating idea. Another type of Web3 driven ownership is fractional or micro-ownership. The Rembrandt Heritage Foundation, for instance, is planning to digitally cut Rembrandt’s most famous painting, the Nightwatch, into 8,000 pieces and sell them as NFTs.
We will also need to talk about ownership rights when machines will increasingly develop products, arts and text on their own. Who owns the IP of a DALL-E visual: is it the user who asked for the image, is it DALL-E, is it Open AI (the organization behind DALL-E) or is it the developers behind DALL-E? A lot of food for thought, here.
Not only will ownership of products and services change, we might also see a big shift in the ownership of user data: from the tech companies in the Web2 model to the user in the Web3 model. This could have some huge impact on identity, privacy and security, seen from the user’s point of view. But seen from the perspective of companies (where the increase actually becomes a decrease), this will mean rethinking any type of data-related marketing and business model. Interesting times lie ahead.
Decrease in ownership
But at the same time, we are definitely seeing a decrease in ownership in the world of atoms (Versus the world of bits, I mean, not the actual atoms, who in fact, never owned things and cannot therefore decrease their ownership of them. Poor atoms.).
There are two main reasons: first of all ESG and ethics, the increased appeal for degrowth and the fact that our rampant consumer behavior is devastating for planet, climate and even society. Just think of the plastic soup in the sea, the insane amount of travel done by cheap products from China to here, the awful labor conditions of workers allowing us to buy cheap clothes or the clandestine giant dump in the Atacama desert with tons of discarded clothes. Especially the younger generations are advocating to buy (and therefore to own) less things.
Second, affordability: in the current downturn food, energy, real estate and care prices are rising. And so the younger generations are choosing to rent cars when they need them (and favoring other types of mobility), instead of buying them. In fact, it has also become almost impossible for them to buy real estate without the financial help of parents. But it’s interesting to see that this also seems to go hand in hand with new types of renting models: like community driven rental or short term rental. The latter is especially interesting for employees in fully working from home regime, who want to test out new regions to live.
We see quite a few things moving in this area. Andreessen Horowitz has invested 350 million dollar in ex-WeWork Adam Neumann’s new ‘Flow’ rental apartments, which are basically WeWork, but for living: he wants to “connect people through transforming their physical spaces and building communities”. Shortly after that news, Zumper and Landing – which both have short-term rental models – announced they respectively each raised $30 and $75 million.
But it’s not just private real estate, office real estate will also go down because it’s expensive ànd people are working more and more from home. I’m not expecting that there will no longer be offices, but they will probably be smaller than before. Lyft, for instance, announced it will cut back on its physical office space in the U.S. as it is increasingly shifting to remote work. In fact it is renting out approximately 44% of its 615,000-square-foot office real estate. On the other hand, the high cost of energy might be driving employees back to the office again, so this might become a really interesting area of change. Maybe companies could cut back on physical space (because of the cost), but offer energy vouchers to employees (instead of meal vouchers) to help them meet ends?
And of course, there’s still the ‘old’ trend of the sharing economy that’s still out there, with platforms like Turo (car sharing), Zipcar (car sharing), Airbnb (house sharing) or Link Coworking. And let’s not forget the streaming of media and entertainment (movies, music and games) instead of owning the carriers. The latter models have been around for a loooong time, of course, but there are more recent examples of this type of “streaming” of services, which we have now come to call “subscription models”. For instance, seat heating used to be a fixed feature of a car. You either bought a car with it or without it. But BMW has started rolling out subscriptions for seat heating in some vehicles in South Korea. Similarly, Tesla has announced that new Tesla orders would require a subscription for navigation services. Old cars came with navigation, new cars no longer do. Same goes for tires, Michelin, for instance, is offering Tires-as-a-Service. The Verge analyzed that the “auto industry is racing towards a future of microtransactions.”
It's interesting to see this decoupling of hardware and software here, with BMW and Tesla. Though we have always been accustomed to buy or lease the software on our computers and sometimes on our cell phones (the apps, I mean), the software in camera’s, cars, smart home speakers etc. have always been inherent to the product. But if we can regard Tesla and BMW’s evolution, this might be about to change. Which means that we might need to subscribe to the software on many of our smart devices like fridges, vacuum cleaners and security camera’s in the future. And maybe the software and hardware providers will no longer be the same at one point: with for instance Tesla providing the hardware and Apple the software.