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> rent-seeking and extracting money long term, on a regular basis recurring revenue is what you're talking about, it's a financially desirable thing for them,
by fsckboy 4y ago
> rent-seeking and extracting money long term, on a regular basis
recurring revenue is what you're talking about, it's a financially desirable thing for them, but it's not the same thing as rent seeking. Rent seeking is not receiving payments over and over on a regular basis, rather it's a term economists use to mean making money from your position in the market without contributing anything of value to the market (without putting in any work, so to speak). For example, "monopoly rents" are the extra parts of the prices that monopolies can charge because they face no competition.
add-ons to a major expense like an automobile can qualify as rents because once you buy the car, you are essentially trapped into buying the add-ons from the one manufacturer, like being forced to get your car serviced at the dealer.
- amatecha 4y agohrm, interesting... by that definition I would argue that the business model of car dealerships is specifically rent-seeking. They not only don't contribute anything of value, they actively detract from the value proposition by marking up far over MSRP and, like someone posted in another comment, engaging in shady tactics like selling your vehicle to someone else after waiting for 3mo because your bank isn't open until tomorrow. Just to scratch the surface.
- JamesianP 4y agoThe vendor still had to invest money to put the feature there, so it's a legit business transaction, even if it sounds silly. Presumably the monthly cost will be a lot less than the hundreds it would cost to buy the feature outright. Or are they charging people twice?