Why Amazon lending worries me

November 4, 2011, 4:21 PM UTC

FORTUNE — There’s a lot to like about the Kindle ecosystem. Jeff Bezos and Amazon have made sure of that, from one of the largest digital book selections around to a cross-platform syncing feature that “just works.” Of course, depending on who you are — consumers, publisher, competitor — there’s also lots to dislike, too: DRM-protected books that make users think twice about leaving for a competitor or relentless price undercutting on the company’s e-readers. Its latest effort, an e-book lending program, raises a red flag for me, though not for the reasons you might think.

The Kindle Owners Lending Library will let Kindle and Kindle Fire owners who are also Amazon (AMZN) Prime subscribers check out a book from a limited selection of 5,000 titles, far shy of the one million-plus available in the Kindle Store. There are a few other catches right now, too. Users can take out a book for however long they like, but they’ll only be able to check out one title at a time, and then only one title a month.

I’ve waited for a big digital book lending push like this, but it also got me thinking about what the program signifies. Like Netflix (NFLX) Instant, Spotify, and Amazon’s own movie streaming service before it, we’re seeing Internet companies inch towards an “all-you-can-eat” business model where users pay a flat fee for digital content.

The benefits for consumers are obvious. Netflix Instant and Spotify subscribers are exposed to more content this way than if they paid for media a la carte. Why pay $1 a song on Apple’s (AAPL) iTunes when you can pay $10 a month to listen to as many songs as you want?

As Spotify CEO Daniel Ek told Fortune earlier this year, giving users “access” to content in this buffet-type fashion is the future because, he believes, once users try it, they’ll get hooked and sign up for a premium plan. Obviously, that’s great for business.

For users, there’s a drawback that isn’t nearly as obvious yet, largely because it’s still early days. By subscribing to one of these services, they’re relinquishing ownership over the content they consume. In Amazon’s case, you pay a flat fee for Amazon Prime, but you don’t actually own the digital books you are lent.

It’s renting versus owning in its most basic form. In one scenario, that money is going towards something that’s yours. In the other, you’re paying for temporary use of a good, service or property. Depending on how much media you consume, “renting” may actually be more cost-effective than “owning” in the short-term. In the long run however, your money arguably gets you less of a return.

And regardless, there inevitably comes a point when subscribers cut and run. You might not think that will ever happen, but look at Netflix, a company many thought could do no wrong until it mishandled a price hike and backtracked on a spin-off of its DVD business. Those two faux-pas helped cost it 800,000 customers in its most recent quarter. (Let’s not get started on the hammering its stock took.)

That’s not to say the other companies here will trip up or that the “all-you-can-eat” business model is even a bad thing per se. But I do worry that digital ownership could one day be a defunct concept, that we as consumers won’t have much in the way of choice, and all we’ll have to show for our continued patronage is a lighter wallet.