house-iwth-nest

How the Internet of Things erases ownership

One of my favorite novelty Twitter accounts is called @internetofshit. The Internet of Things’ cranky, sarcastic doomsday prophet is a prolific tweeter, ranting about everything from a coffee cup that connects to the internet to a pub with facial recognition that forces patrons to remove their hats before it works.

The IoT has plenty of hurdles to clear in the near future, but most of them are cosmetic. Given enough tech advancement, AI will be able to read faces with or without hats, for instance. But one huge issue is practically inherent to the concept of an IoT, and can’t be easily overcome. Its revenue model demands that consumers never actually own the devices they pay for.

It started with DRM, which kept you from owning music or books

Software has always fallen under a more loose definition of “ownership” than hardware. If you’re working on a spreadsheet, your desk chair isn’t the thing you need to worry will bluescreen and vanish underneath you. The shift in properties from physical to virtual changes a lot: virtual data can be deleted with a keystroke, but it can just as easily be multiplied ad infinitum. Since such duplication drives down market values, digital rights management (DRM) arose to enforce authorized recreation.

I’ll leave the discussions of DRM-related ethics and concerns for another piece, but the upshot is that DRM’d eBooks and music files are heavily restricted enough that “owning” isn’t as accurate a term as “licensing.” No one ever buys an eBook used. And companies retain effective ownership, even retaining the ability to delete the products at will.

This fact has never been represented in a manner more poetic than in July of 2009, when Amazon discovered that eBook editions of George Orwell’s classics 1984 and Animal Farm were sold without the rights holder’s legal permission, they erased every copy off of the devices of those who had paid for the book. Given Orwell’s penchant for critiquing the overreaches of a totalitarian system, reporters’ witty opening statements wrote themselves.

Despite appearing to be owned, the eBooks were on lease from Amazon, a fact that surprised many consumers: “It illustrates how few rights you have when you buy an eBook from Amazon,” said Bruce Schneier, an expert on computer security quoted by the New York Times. “As a Kindle owner, I’m frustrated. I can’t lend people books and I can’t sell books that I’ve already read, and now it turns out that I can’t even count on still having my books tomorrow.”

The point was driven home on a large scale in March of this year, when Barnes and Nobles’ Nook stopped selling eBooks in the UK. But the corporate nicety of Nook’s statement couldn’t cover up a hitch in the eBooks’ transition from Nook to their new UK provider, Sainsbury's Entertainment on Demand: Nook was working “to ensure that you have continued access to the vast majority of your purchased NOOK Books at no new cost to you” [emphasis added].

This exact phenomenon is nothing new for electronic media. Amazon has long advised subscribers to download the video they purchase in order to ensure continued access, and any freelance writer without a few dead links in their CV hasn’t been writing long enough. But now the phenomenon is leaping from digital to real-world products.

Nest’s device-bricking apocalypse is the proof that the IoT erases ownership

Nest, owned by Google’s parent company Alphabet and one of the largest companies dedicated to stocking IoT-focused smart homes, will decommission a selection of its products in May 2016. To be clear, it’s not dropping tech support — which would allow the devices to continue functioning — it’s intentionally ensuring that the devices will be useless.

The smart home device, Revolv’s hub and related apps, was worth hundreds of dollars, but is reliant on online connection by nature. Since its company has decided to brick it, it’s worthless. Customers — even those with eBooks! — are right to be indignant: As Business Insider reports, the Revolv hubs were previously advertised to come with a “lifetime subscription.”

Unless contested, this incident is proof of the erasure of ownership under the Internet of Things. To be fair, Nest’s decision is clearly a PR failure for many reasons (it didn’t even alert customers, despite having emails on file). It seems unlikely that we’ll soon live in a world in which any online device will shut down immediately after its warranty is up, if only due to the mass outrage it would incur. But actual ownership is eroding rapidly. Why?

The problem driving the erasure of ownership: money

The Internet of Things has a revenue problem. The devices constantly require tech support, so they demand an on-going backend cost. If users all purchase a thermostat for a set price and continue to use it for the rest of their lives, the smart device company must sustain constant user base growth, Ponzi-scheme-style, or perish. Roughly three options are open to those hoping to profit off of the Internet of Things. They are — in order of escalating dystopian implications — to encourage constant upgrades, to sell user data, and to rely on a subscription model.

Apple’s been able to hawk a new iPhone annually or biannually to consumers hoping for the sleekest design and the fastest load times. It has been able to turn devices into status symbols. But it’ll be far harder to do the same with the Internet of Things, which hopes to expand into the untapped market of incredibly unsexy household machinery. No one’s looking for a new heating system or washing machine or rice cooker every two years. Surviving on constantly developing an upgrade may work if paired with a world-class marketing campaign, but it’s hardly a go-to revenue plan.

Selling user data to advertisers could also help a tech company keep the lights on. It’ll also ensure consumers are inundated with ads for even more technology on the very same technology that they already paid for the privilege of owning. We’re barely putting up with the clickbait-and-ads model of the free internet. We don’t need the same thing on our decidedly non-free Internet of Things.

Finally, the subscription model highlights the lack of ownership in the world of IoT. Homeowners might soon expect to pay five dollars a month for the privilege of thermostat tech support. As Nest founder Tony Fadell said in 2014: “We’ll get more and more services revenue because the hardware sits on the wall for a decade.” This works fine for the company, but ensures that the consumer continuously pays for a fancy version of something that could have done the same job far more simply.

The Internet of Things must allow devices to function without tech support

The point of the Internet of Things is to add internet to the hardware. But by binding the two together, practically all these devices become reliant on software. If the internet’s out, software suffers when hardware remains the same. An old-fashioned elevator won’t stop working if the internet’s out.

Ironically, the catastrophes that affect a highly connected online world are often extremely low-tech in nature: One university allegedly lost its internet when a farmer twenty miles away dug up a fiber line in an attempt to bury the corpse of a cow.

The only solution is for tech companies to ensure their smart devices are capable of functioning as dumb devices, although their tech support subscription service must improve the experience. If the IoT continues functioning semi-normally without internet, consumers will once again have a semblance of ownership over their own hardware.

My hopes aren’t high, but maybe I’ve just been reading my favorite twitter account too often. You haven’t heard about the company that put DRM on its kitty litter boxes, have you?

 

Further reading:

Experts say Internet of Things is edging into maturity

The IoT “time bomb” report: 49 security experts share their views

Do organisations really need a ‘Chief IoT Officer’?

Everything-As-A-Service: 5 enterprise takeaways from Smart IoT London

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Adam Rowe

Adam Rowe is a freelance science and technology writer. He splits his freelance research time between finding bizarre science facts and bizarre science fiction, documenting it all @AdamRRowe.

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