MusicMagpie, a leading re-commerce business in the UK and US specialising in refurbished consumer technology, has expanded its rental subscription service beyond smartphones and into new product categories such as tablets, games consoles and MacBooks.
Originally launched in October 2020, musicMagpie’s innovative rental subscription service provides customers with a more affordable and flexible option than an outright purchase or a pay-monthly contract with a mobile network.
The device is supplied to the customer at no up-front cost, in return for a monthly payment from as little as £8.99 over 12 months. Once the rental agreement is over, the customer can upgrade to a more recent device, keep the same device and pay less, or cancel the agreement and return the product.
The smartphone service has already attracted some 13,500 active subscribers as of 30 November 2021, including the first cohort of contract renewals, and its success has prompted musicMagpie to extend into other categories. Games consoles, tablets and MacBooks are all now available to rent, and the Group sees potential to expand into other types of consumer technology in future.
Monthly rental fees start at £8.99 for a refurbished phone, £11.99 for a console, £12.99 for an iPad, and £19.99 for a MacBook. The Group has also recently launched new Apple products onto the musicMagpie Store in the UK, with the latest iPhone 13 available to rent for as little as £31.99 a month.
In addition to the benefit to consumers, for musicMagpie a rental subscription generates recurring revenue for the period of the contract, with the ability to achieve further additional revenue from second and third rental periods of that product, and ultimately a potential sale of the product at the end of its rental life. In the case of a rented smartphone, the Group achieves a higher revenue (after approximately 19 months of subscription) and EBITDA contribution (after approximately 7 months) over the life of that device compared to an outright sale.
Aligned to consumer subscription economy growth trend
The strong progress that musicMagpie is making in the rental area is part of a wider growth trend in the subscription economy; from Q4 2011 to Q4 2020, the Subscription Economy Index, which tracks the volume of business generated by subscription-based products and services, grew by 437%.
Furthermore, a report by musicMagpie has found that one in three people say they are more likely than ever before to rent things instead of buying them, citing a range of reasons such as affordability, flexibility, protection of the environment, and being able to access higher quality items. Over half (53%) also agreed that a redefinition of ownership is underway, whereby consumers don’t place as much emphasis on ownership and, as a result, have more access to a greater number of products and services.
Steve Oliver, Chief Executive Officer of musicMagpie, comments: “We are delighted with the progress of our innovative rental subscription service, which is why we’ve expanded it beyond smartphones and into other consumer technology categories. It’s clear from the popularity of this service, as well as the growth of the wider subscription economy, that consumers are increasingly prioritising access, value and sustainability over full ownership.
“There is also a growing awareness of the rising problem of e-waste, which musicMagpie’s circular economy model helps to tackle head-on by refurbishing and reselling consumer technology products, giving them a second or third life which they would not otherwise have had. The beauty of our rental scheme in particular is that it keeps electronic products in the musicMagpie circular ecosystem for longer.
“The amazing consumer value that renting a device from musicMagpie provides, in addition to the environmental benefits that it generates, means that our rental proposition is a true embodiment of our long-standing ‘smart for you, smart for the planet’ ethos, which is why maximising and scaling our rental business will be a major point of focus for us in the coming year.”
