Landlord 2.0: Tech’s New Rentier Capitalism

By selling us hardware but retaining ownership of software and data, tech companies are treating users like digital tenants

Credit: Michael Short / Stringer/Getty Images

WWhen 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 And, crucially, they charge for access — not for ownership, which increasingly seems outdated.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.

It’s one thing for digital controls to restrict how you can use a smart cat litter box, but it seems another thing to spend $30,000 buying a car, or even $100,000 on a tractor, if all you own is a big hunk of metal and rubber while only renting the software needed to actually operate the vehicle. While contracts like terms of services grew out of software and websites, they are now used as a way to smuggle ownership claims into parts of things that are otherwise owned by somebody else.

The Twitter account Internet of Shit is filled with examples of fridges, doorbells, and lawn mowers that require internet connections and regular software updates just to function, always tethered to a corporate overlord and awaiting further instructions. As Kashmir Hill of Gizmodo reported, all the devices in her fully connected smart home were in daily contact with their manufacturers, constantly sending them data and pinging for updates. “When you buy a smart device,” Hill concluded, “it doesn’t just belong to you; you share custody with the company that made it.”

As a technology of enclosure, the software license has been successful at, widely and secretly, enacting a mass transfer of rights from “users” to “owners.” It’s as if you bought a home, but unbeknownst to you, the previous landlord continued to own the kitchen, and you didn’t find out until they repossessed your kitchen for trying to do repairs or remodel without their permission. Oh, and they have also been spying on how you’ve been using the kitchen this whole time. Consider the rise of smart homes and this analogy doesn’t look so far-fetched.

Platform companies think of themselves as service providers, not as digital landlords extracting rent from their plot of cyberspace or their software enclave. But they are, nonetheless, creating rentier relations by another name.

We should situate these new developments in a long history of practices used to claim property, control rights, capture value, and compound inequality. Geographer Alistair Fraser coined the phrase “data grab” to show how these contemporary dynamics of enclosure follow in the footsteps of more violent processes like “land grabs,” where a people’s land is physically taken from them. The version of rentier capitalism we see emerging now is adapting in response to the digital age, but it still maintains the same essential features of extraction and control. Instead of building fences and demanding rent for access to landed property, these rentiers install software and capture value from the use of digital platforms and physical things.

The companies accumulating vast wealth through platform businesses are also telling us that ownership is an old-fashioned idea, while deploying the seductive language of “sharing” and “convenience.” But they don’t mention the contingent access and lack of rights — or the death by a thousand subscriptions and charges — that come along with renting the things you use every day. Nobody would look at the dynamic between landlords and tenants and say, “Yep, I’m happy to apply that to my entire life.” Yet that is what’s happening when we accept, or don’t resist, the expansion of extraction-as-a-service.

If this movement of Landlords 2.0 had a motto, it would be this: Why limit rent collection to real estate when there is a whole world out there waiting to capture rent from, online and off?

author — TOO SMART: How Digital Capitalism is Extracting Data, Controlling Our Lives, and Taking Over the World —

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