First all the bs with Twitter and Elon, then Reddit having an exodus to Lemmy (not complaining lol), then Twitch. Are we like, in an alternate self healing dimension or something?
The timeline split after harambe. This is known
From Cory Doctorow:
Here is how platforms die: First, they are good to their users; then they abuse their users to make things better for their business customers; finally, they abuse those business customers to claw back all the value for themselves. Then, they die.
https://www.wired.com/story/tiktok-platforms-cory-doctorow/
Some of it is because we had a decade of cheap borrowing which has come to an end and many of these platforms were never profitable.
I have a sinking feeling that these moves are not about money, but more about power and manipulation. If you squeeze these user bases such that the savviest users are forced out, those more likely to ask “Why?” about damn near anything, you will own access to a group of people that can be influenced to think/do/buy whatever the top management and/or majority shareholders want. If you lose a few million users, what does it matter if they were dissidents to your goals?
This is where my mind goes. Kinda convenient that Twitter and Reddit, both likely particularly dangerous to those seeking power happen to be destroyed seemingly intentionally in the same year ahead of a sure to be insane U.S. election season.
Hmm, kinda interesting. A lot of Trump shit was spread on Reddit during the 2016 election, makes sense they would try to get rid of anyone who would oppose that content
Not money per se, but the oil of the 21st century: data.
I guarantee it’s primarily about improving their ability to harvest and sell user data.
Exactly. The native apps can gather so much more info than a website and they have to kill third party apps to force people to use the official client.
100% power There’s parallels to the writer strikes Netflix ceo got like 2x the money that all the writers are asking for in bonus so it’s not about money It’s something else
From everything I have observed, businesses are hunkering down for a recession in the next fiscal year. It explains the lay offs, the penny pinching, and puzzling decisions that look like business suicide.
For services that are free for users, advertising revenue and investment fund raisers are the only thing keeping them afloat. With banks like SVB getting seized by the FDIC, it’s starting to scare investors. Advertisers are seeing the writing on the wall that people will stop spending as much as they used to. We are also probably seeing jacked up pricing across the board because businesses are taking what they can before it’s gone.
So what’s left? Squeeze users for money. Additionally, shed users that actually cost them money and these tend to be power users. The question, which everyone seems to be assuming is a foregone conclusion, is if this shedding strategy will end up killing the service. In reality, we don’t know but the idealists would sure feel good if someone else ate their market share.
I’m just glad that federation is picking up steam in the social media space.
Also what hasn’t been touched on very much in this thread is the increase in interest rates from the Federal Reserve. The money hose has shut off and expansionary business policy won’t work for the foreseeable future even without a recession. All these internet companies have developed and grown in an essentially 0% interest rate environment that rewarded growth beyond all else. With rates increasing, investment in risky companies that may or may not grow is becoming a less attractive option and so I bet a lot of these non-profitable, growth-focused web companies are seeing liquidity dry up and are having to reach profitability to avoid bankruptcy since servicing new debt in this current interest environment is basically impossible without solid cashflow and a clear corporate vision.
This is leading to all these companies suddenly raising prices, cutting staff, choking competition, and cheaping out to try and break even instead of grow. It’s a paradigm shift.
I agree with most of what you said. I would say classifying SVB as a seizure is probably not accurate. The FDIC only came in when it was clear SVB was going to fold and in fact insured far more than the 250k per account guaranteed. Mainly to try and stem a run on midsize banks because
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Many companies had large holdings, undiversified in these banks
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The banks were borderline negligent with how they handled those deposits, sticking them all in “safe” government bonds that ruins liquidity.
Once the interest rate on the bonds was lower than the base borrowing rate, no one would buy the bonds instead of just buying new bonds with a much higher guaranteed return.
So, given that, I would say the FDIC instead bailed out the banks. Something they would never do for you or I, or even a business with similar valuation as any of the banks customers.
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So why do layoffs at all if they don’t actually work? “People do all kinds of stupid things all the time,” Pfeffer says. “I don’t know why you’d expect managers to be any different.” https://www.theverge.com/2023/1/26/23571659/tech-layoffs-facebook-google-amazon
There is a psychology at work in layoffs—ownership forces management to choose to hurt people to give more to ownership. Like paying a blood tribute to the king, but dumber.
I like, and suspect this to be the true reason, the argument that one company sees another doing layoffs so they do layoffs. It’s all just a race to the bottom.
twitter was overvalued. reddit has made a lot of questionable business decisions over the last decade or so but their recent API change will be their death knell. it feel like a cash grab. I personally only use Twitch to watch Bob Ross reruns :P
There’s Bob Ross reruns on twitch?
https://www.twitch.tv/bobross ;)
great to watch & fall asleep to
This Lemmy migration does feel like waaaaay more positive of a result than I ever expected from reddit getting worse.
I’ve always appreciated the idea of the fediverse, but mastodon and the twitter-style of social media has never appealed to me, and Lemmy used to be so tiny and niche, so I didn’t invest much time in it until now. But this sure is nice, comparatively. I’m probably on here too much though!
Same. Never cared about Twitter, but I like new internet stuff, so I got on Mastodon. Never used it and forgot about it for years. Came back to it with all the Elon stuff and realized the instance was dead, so I created a new account on another instance to never use. The point is, like you said, Lemmy is something I will actually use if the community continues to grow and sticks around.
Mastodon has a place, just isn’t for some people. I found the same problem you had with it. Just like how conversations work better in a Reddit-like style of communicating.
All these websites have almost always been net cash flow negative. They bleed venture capital to provide a service below cost in order to build a user base.
The problem now is interest rates have spiked. Rates have been basically zilch for much of the internet’s history over the past 20+ years, so sites could actually operate for quite some time on super cheap debt that they almost never had to repay. And venture capital firms would just keep pouring money into the “next best thing”.
Now that debt is rapidly becoming much more expensive to maintain, and those VC investors want their chunk of the pie back in their pockets. And they are going to extract it from every single one of these centralized services by whatever force is necessary. It’s only just getting started, you watch.
Well, while it is surprising it’s all happening within a year or so, it’s not unexpected at all.
They’re ultimately for-profit companies. They have openly demonstrated the obvious truth that when push comes to shove, users don’t matter to them, at least not as much as money. Our attention was the product.
These companies have proven time and time again that a quick moneygrab will win over retaining the people who make the site work. capitalism 101 baby.
Yep, think of the math like this:
1000 users that we can get $1 of profit from totalling $1000 profit
Or 500 users we can get $3 of profit from totalling $1500 profit.
$1500 > $1000 Therefore it’s a good decision.
Welcome to the mind of corporate executives
Source: I work with these dumbasses
Doctorow’s Enshittification describes it pretty much dead-on. It’s basically the cancerous form of late-stage capitalism that we’re living under now.
Let them self destruct.
I’m just glad to have found this place. 😂
They saw Lemmy becoming successful, corporate mistook Lemmy with Lemmings, and decided to go out Lemmings style.
…jokes aside, Cory Doctorow has a great text about that, called “Tiktok’s enshittification”. It’s a four-steps process:
- The platform is good for its users.
- The platform abuses the users, to be good for its business customers.
- The platform abuses the business customers, to claw back all value for itself.
- The platform dies.
In my opinion it’s also the result of management being disconnected from the platform that it manages, and not knowing fully the implications of their own decisions.
I think this is “normal” and the previous status was a glitch due to the low interest rates. Investors threw money at tech companies and didn’t care whether they made any money. Not any more. It’s now “make money or go bust”. I am not sayiny these new trends will make them money, but IMHO it’s what’s driving them
That is a great point. I never considered this to be an effect of interest rates increasing. But I think Reddit was already profitable.
But it recently went public and I think the board is like, “Make more money now!”
They really just want to get everyone on the Reddit app so they can collect user data to sell and to show advertisements.
Reddit hasn’t gone public yet (it’s planned for this year) and very likely isn’t profitable — we don’t know for sure because it hasn’t published its financials.
I HATE PUBLICLY OWNED COMPANIES I HATE PUBLICLY OWNED COMPANIES I HATE PUBLICLY OWNED COMPANIES
Hell, any such company is going to pursue infinite growth and always aim to squeeze as much money as possible from it’s costumer base in the short term.
My guess is that because there is currently a big possibility of economic turmoil and these companies are appealing to investors, advertisers,etc. and trying to gain as much capital in order to look stable.
As soon as you go public, your stock is your main product. Sucks every time it happens.
Couldn’t have said it better myself
Higher interest rates means less investment, resulting in these companies racing to make a profit. The reality is that Reddit is bleeding money and has been for years, and Twitter is barely profitable.
Where do you see this information on their profits?
There isn’t much public information because all those companies are private. But, various journalists have looked into things and declared it isn’t profitable, for example:
That has left Reddit, known as a bastion of free speech, walking a delicate tightrope between its outspoken audience of 330mn monthly active users and new advertisers that can propel it into profitability.
https://www.ft.com/content/c4c01d86-85f5-49c8-9966-cbf935d834a2
Awesome. Thanks for the follow up. Crazy how hard it is to find. I’m sure their income is enough to pay them decent wages though. Not the moderators though, screw those people
I’m out of the loop on Twitch. Not a big user of it, other than watching a friend occasionally. What’s going on there?
Saw this video in another thread. Not sure if it represents the situation accurately though because I haven’t been following it either.
Thanks for sharing. My bestie is a small streamer on Twitch, so I try to keep up at least a little.
