Sunday, April 21, 2019

"Landlord 2.0: Tech’s New Rentier Capitalism"

We've visited the author of this piece a couple other times and found him to be a very interesting guy.
Although titles like the one above might elicit a "Oh another one of those articles" reaction, Sadowski exhibits subject mastery that takes his stuff beyond pop exposition to pieces worthy of serious attention.

From Jathan Sadowski at Medium, April 4:
By selling us hardware but retaining ownership of software and data, tech companies are treating users like digital tenants

When Tim Cook and his fellow executives hit the stage for Apple’s event on March 25, it was to announce a major strategic pivot. The company knows that its markets for iPhones, iPads, and Macs are stagnating, a trend unlikely to change anytime soon. That means Apple needs to sell its customers something else.

“Apple’s reinvention as a services company starts for real,” declared Bloomberg after Apple announced a series of new services that will demand subscriptions: Apple TV+ to stream movies and TV shows, Apple News+ to aggregate news publications, Apple Arcade to play games, and an Apple Card to pay for it all. With Apple’s gigantic, built-in user base, financial analysts estimate the company could reach 100 million subscriptions in just a few years, creating “a $7 billion to $10 billion annual revenue stream over time.”

Apple is doing more than just responding to competitive pressures — it is following the shift in how technology is being used to change notions of property ownership and profit accumulation. Facebook, Uber, and Netflix build platforms and provide services, inserting themselves into social relationships, economic transactions, and personal consumption. They mediate the everyday activities of our lives and collect valuable data about our behaviors and interests. And, crucially, they charge for access — not for ownership, which increasingly seems outdated.
What these companies are doing is actually revitalizing of an old form of rentier capitalism that we tend to associate with landlords and feudalism.
Rather than representing some disruptive new “subscription” paradigm, however, what all these companies are doing — including Apple — is revitalizing of an old form of rentier capitalism that we long associated with landlords and feudalism.

Whether we call it platform capitalism, surveillance capitalism, or just next-gen rentier capitalism, this model for how capital operates uses mediation and enclosure to achieve extraction and control over its subjects. “Rentier” refers to a relationship where an asset owner charges others to access that asset, just as a landlord charges tenants to rent a home the landlord owns.
It’s difficult to understate the extent to which this rentier model is now being applied to the consumer world. Recent years have seen a surge of businesses that describe themselves as “Uber for X” or “X as a service,” such as WeWork offering “space as a service” or Amazon’s Mechanical Turk offering “humans as a service.” Venture capitalists and entrepreneurs are on the lookout for opportunities to capture value — dollars and data — by controlling assets and then charging users for access to those assets, whether it’s office space, music, or games.
In addition to consumer services, many governments, businesses, universities, and other organizations now rent core services, such as software and storage, from platforms. These software-as-a-service operations now take place within the ecosystem of private platforms, which supplies those platforms with a continual source of revenue, while also solidifying their critical position in the economy and society.

While examples like Uber and Airbnb are fairly obvious, through widespread application of the X-as-a-service model, platforms have also been able to expand rentier relations in ways that enclose everyday things. The key technology of enclosure is the software license, which allows the new rentiers to claim ownership over the software embedded in and data emanating from increasingly more physical things that we use in our daily lives.
Thanks to the internet of things, many mundane and formerly analog objects, like coffee makers and toothbrushes, are now equipped with software, sensors, and network connections. What used to be an upgraded “smart” version is becoming the default way that products are designed and sold. The software becomes integral to the thing’s function, the sensors collect data about how the thing is used, and the Wi-Fi connects the thing to a company’s platform so data can be downloaded and uploaded.
Whether we are streaming content or licensing software, we are paying for the privilege of slowly ceding control of private property to corporate gatekeepers.
And, critically, when you buy a smart device, you own only the physical object. The digital software is “licensed,” which is just another word for “rented,” and the constant stream of data we produce by using the thing constitutes part of the “rent” we pay to the company. By integrating what were once ordinary objects into the internet of things, companies are able to enact a form of micro-enclosure in which they retain ownership over the digital part of a physical thing — and the right to access, control, and shut off the software — even after you purchase it. Whether we are streaming content or licensing software, we are paying for the privilege of slowly ceding control of private property to corporate gatekeepers....MORE
Previously from Jathan Sadowski:
Potemkin AI: Many instances of 'artificial intelligence' are artificial displays of its power and potential

And with Professor Frank Pasquale:
"The Spectrum of Control: A Social Theory of The Smart City"
One of the more important—and surprisingly popular—pieces we linked to in the past year..
First posted April 22, 2018...