FAANG & THE ITALIAN CITY STATE MODEL

Looking back to look forward

FAANG AND THE ITALIAN CITY STATE MODEL

By Perry Di Iorio

The changing media landscape has created a variety of overlapping companies that did not start as players within the media space; but have evolved into important content and media companies. We speak of FAANG – Facebook, Amazon, Apple, Netflix and Google – as these powerful entities which control much of the advertising spend, and at the same time shape, through various technologies, the direction of marketing, advertising and communication in our society.

Combined with that are questions relating to privacy, individuality, and the rendering of those to access the media platforms, as well as the attenuating fraud that comes with this.

We live in a world of converging media and it is interesting to note the point of origin of each, and to track how they evolved. If Facebook was originally created as a university party tracker it has evolved into the world’s largest social platform, a powerful influential tool which derives its revenue from advertising, and which has now created a marketplace like eBay.

Apple, which is credited with starting the computer/digital revolution, among others, has now evolved into both a hardware and software leader- I-phone, Apple TV, I-Tunes – a content provider and now involved in financial services with Apple pay.

Amazon started off as a marketplace, a giant e-store for everything and has quickly evolved into a major original content studio and voice activated media platform challenging the dominance of Netflix. The latter having pioneered streaming services and content creation, thus changing television and movies in a dramatic fashion and ushering a future of paid for content which has upended the advertising model in the process. Google, who made sense of surfing via their browser, not to be outdone, has jumped into the voice activated world, after conquering the mobile operating system industry and now are challenging Microsoft`s dominance in the enterprise computer world. Not to mention self-driving vehicles which will radically change transportation, urbanization and individual freedom, in a major way.

It becomes increasingly difficult to understand who does what; as no one sticks to their swimming lanes and everyone plays in everyone else`s sandbox. Consumers are constantly trying to keep up with all the technological changes and advertisers` attempt to stay ahead of the ever-shifting business models.

Consumers must evaluate each platform and make important choices as issues of privacy, and how one`s data is used/shared, are enacted. Do you share your data with all digital outlets, do you share ample data only with some – Amazon needs a lot of information as they will ship physical product to you. In the case of Facebook and Google not as much deterministic data is needed, therefore each requires a sliding scale of personal information.

The balance between privacy and information creates an interesting dynamic in this interactive world. As these companies migrate into a wider offering the combinations become complicated. Will Google offer a streaming service, will the driverless car they are chasing result in a Googlian mobile sphere, where navigation and infotainment are controlled by them – they have music, maps, voice activated search, home security etc.… With Apple moving into the automotive space will the services overlap or be duplicated? How long before Netflix offers to sell and ship the products that you see in their original series – Walking Dead crossbows anyone.

We can see where much of this can overlap. And throughout this process more data is shared, and more information required. Eventually consumers will have to determine the value of their data and how they chose to share it. Do I need to share everything with everyone or does being an Amazon Prime member address 80% of my needs, especially if Amazon teams up with, say, Samsung, to provide intelligent home appliances – fridge, tv, washer/dryer, phone, home security – all governed by Alexa. Perhaps at that point consumers will retract some of that information that is widely shared to focus on the privileges offered by being a complete citizen of Prime, or Apple, or Google. Will consumers choose to become citizens of the Apple universe – with all the attending benefits that that will provide and cut ties with Amazon. Eventually economic choices will need to be made. As much as we rale away at the inefficient cable model for television, where choice is limited and bundles never completely satisfy, there will come a point where not everyone will be able to afford 20 streaming services.

Quite likely consumers will alternate and align with the various stages of life – a household with young children may sign up for the Disney streaming service, keep it for a decade, and then move on when the children are older. These combinations will evolve in a marketplace dictated by multiple options and choices.

At a deeper level what is really happening is a new sort of social contract. One that says I will provide you with all the personal information and data you need in exchange for your services, with the understanding that you will respect, protect, and provide what we have agreed to for that period.

The eventual fragmentation of consumers into groups that abide to one digital powerhouse corporation creates a new kind of citizenship, a new kind of social contract. We have these to a limited extent now with our traditional providers of linear television, unlimited internet and mobile offerings, but the depth of offering that is coming from the FAANG, and others like it, is a much deeper, complex and intertwined relationship. This is reminiscent of the city states of Renaissance Italy, where citizens of Venice, Florence, Genoa or Rome obtained protection, rights, employment, and much of what was needed in their daily lives in exchange for a loyalty, a citizenship, to the city they belonged to. When Galileo was summoned to Rome to defend his heretical theories on a heliocentric universe in front of the Pope and his inquisitors, he did so under the protection of the powerful Medici family who ruled Florence. As a Florentine Galileo benefited from all that Florence, the cradle of the Renaissance, could offer its citizens. A similar case can be made for Leonardo Da Vinci, originally a citizen within the Florentine sphere, Da Vinci eventually became employed by the Duke of Milan and the powerful Sforza family where he spent many years under their employ and benefited from all that a Milanese citizenship offered. He ultimately came under the protection of the French king Louis XII who took control of Milan from the Sforza`s, where he continued to contribute his amazing talents.

All these city states competed. Venice which controlled the eastern silk and spice trade was challenged by Genoa which was trying to find a sea route to the East. The Genovese were proud to be the `dominant of the seas` and produced their most famous native son, Cristoforo Colombo, (who would go on to great fame discovering America) but was a product of a competitive society in competition with Venice. One Venice`s primary tenets was the honoring of a commercial contract, thus bound to uphold Shylock`s contract with Antonio for a pound of flesh ( until the intrepid Portia intervenes).

All of this to illustrate a parallel between the Italian Renaissance city state model, and what we are seeing developing with the FAANG model, whereby citizen-consumers become proud adherents to a city-state culture. It provides an interesting prism by which to look at, and analyze, the evolution of these pivotal companies in the new digital economy.

As issues of privacy, data exchange, and consent evolve, this Renaissance analogy can help us better understand and anticipate the evolution of the FAANG model.