The business model shift driving growth in digital music, solar panels, and other consumer technologies is poised to have the same impact on commercial energy efficiency in the United States.
This innovation could increase annual energy-efficient technology spending — LED lights, high efficiency HVAC systems, and smart thermostats — by 42 percent, unlocking $20 billion in new investment by 2020 and doubling annual industry revenue to $48 billion by 2025.
“As-a-service” is popping up everywhere. Software-as-a-service. Rides-as-a-service. Home-maintenance-as-a-service.
For a customer, the service model swaps complications of ownership — high upfront costs, numerous vendors, and decision fatigue — for an all-inclusive pay-as-you-go option. This delivery model spreads the total cost of product ownership over time into predictable payments with worry-free upkeep. It’s transforming how we all purchase and own goods, expanding markets by lowering cost barriers and reaching new customer segments.
Consider the music industry. The web and mobile devices enabled digital downloads and music streaming services, pushing CDs aside. Revenues from music streaming services like Spotify outpaced CD sales for the first time ever in 2014 at $1.87 billion.
But Spotify hasn’t just usurped CD and digital purchases; it has created an entirely new group of music consumers. In 2014, streaming services represent 27 percent of the total U.S. music industry sales, compared to just 5 percent five years ago.
Read the full article. (Greentech Media)
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