The reason for it being so trendy is its appeal to young people.
The reason for its being so trendy is its appeal to young people.
I understand the grammatical difference between these two sentences, and to me they both sound correct. But I have a few questions:
I recognize that this is not a duplicate of the questions that simply ask which case should come before an "ing" verb form. OP says that he or she understands the grammatical difference and asks a couple of very specific questions.
The meaning is not exactly the same. Consider these sentences:
I like the woman appearing in the play.
I like the woman's appearing in the play.
In the first case, the speaker likes a woman who appears in the play but doesn't necessarily like the fact that she appears in it. In the second, the speaker likes her appearance in the play but doesn't necessarily like the woman herself.
That being said, many people use the first construction to mean the second. In your first example sentence, it doesn't really make sense to interpret "being so trendy" as a present participle phrase (presumably describing "it"). Therefore, people are very likely to interpret that sentence as meaning the same as the second.
When the first meaning is intended, then the first construction is universally favored over the second.
When the second meaning is intended, then both constructions are seen. I don't have any statistics, but I suspect that the first construction is more popular (though usage may differ by context, dialect, age group, etc.). People who like to maintain traditional distinctions between participles and gerunds are more likely to use the second construction, but you will see the first even in academic journals, official government documents, etc.
