YouTube disallowing adblockers, Reddit charging for API usage, Twitter blocking non-registered users. These events happen almost at the same time. Is this one of the effects of the tech bubble burst?
Ads pay basically nothing now and VC funding has dried up. Most of these tech companies operated at a loss and are now being pressured into becoming profitable since investors don’t want to throw money at them anymore.
Data privacy laws have also gotten better, cutting off another revenue stream that was typically used.
Interest rates def have a factor in this also
But when did VC money get flushed in? I doubt that it just somehow stops out of nowhere. I mean all these companies weren’t exactly founded at the same time.
During the pandemic VC slowed to a crawl and the stock market went to shit. While the market eventually rebounded VC is doing so MUCH more slowly. VC scum doesn’t care about innovation, it cares about making money. If there’s some level of risk it shrinks like balls in a January pool and it takes forever to coax the little guys out.
Tech companies were only favorable to their users during the corporate Web 2.0 genesis when these companies had to lure educated users in with extremely convenient free services, but they always did and continue to do so under terms of service that are intentionally made as hard to read walls of legalese bullshit, so they always click accept and hand them power by moving there.
These companies usually are either publicly traded or aspire to be publicly traded, and are backed by venture capital loaned to them by banks and investors.
Then during the late 2000s and early 2010s these corporations gobbled up web traffic by having all the valuable information and communities behind their walls. This drove their operating costs up a lot but it was no problem, since the zero interest rate policy was in effect so these now-megacorps had basically interest-free loans to get infinite money to finance the platform. However they realized around the mid 2010s that they controlled the vast majority of the web so they realized they could be as greedy as they wanted since no one is going to ever step up to them (YouTube is a shining example of this) and ever since the mid-late 2010s they started nerfing and crippling the user experience in order to please their investors and ad networks. This process was extremely slow initially to minimize the backlash. They applied the boiling frog strategy and it worked.
By the early 2020s this was in full effect: websites do not respect your privacy and try to shove trackers and ads whenever and wherever they legally can, search engines are manipulated to put sponsored and SEO spam links first rather than useful answers, sites are implementing login walls to make sure the valuable content they hold hostage can only be accessed once they have the data of users, discourse is being controlled and micromanaged by corporations with automated censorship, mystery echo chamber algorithms, shadowbans and wordlists, news sites have article limits and paywalls now. It got so bad that it’s already harming society as a whole because it’s causing polarization and these platforms now have enough power to theoretically manipulate elections in some really bad cases.
This is a process known as enshittification: start great then become shit and die. Now that the zero interest rate policy is over, and interest rates started climbing up it means silicon valley free money is over so they can no longer afford to be boiling frogs, they are turning up the heat to 11 and just roasting the frog alive. In other words, the enshittification cycle is becoming exponentially faster and it’s only going to get worse for the corporate web and its users. The only solution is returning to decentralized technologies like Web 1.0 used to be, but it’s extremely hard since free as in you pay with your data services are addictive like crack cocaine.
I am starting to miss the echo chamber of YouTube. I am a fairly leftwing atheist in a solid blue state that ranks near last in religious observance. And yet roughly a quarter of the suggested videos/ads I get are for things like Epoch Times, Prager U, HeGetsUs, PJ Media.
Alright so the only way I am clicking on that stuff is by accident. From the advertisement point of view this is worse than selling iceboxes to Inuit, this is like trying to sell ribeye steaks to vegans with no money.
Which makes you wonder what the future holds. Say you are Epoch Times and you find out the YouTube is pushing your product on people who actively don’t want to buy it how much longer are you going to pay Alphabet for a failed advertising campaign?
There’s also a political agenda at play. The Wall Street madman caste finds left wing popular movements to be obnoxious, as they undermine their business model and cost them money.
Note how Reddit’s admins would turn a blind eye to Nazi subreddits and shit like r/The_Donald for years, until the entire planet screamed at Reddit to exercise some basic asshole control.
But when people started talking about punching Nazis, the banhammer came out immediately. Gotta love Reddit’s totally unbiased policies…
When left wing groups get big enough to get things done, Wall Street pulls strings and then you see bans, shadowbans, biased policies & enforcement against activist groups and marginalized groups (LGBT groups getting NSFW’d out of existence), trolling & astroturfing campaigns, mass propaganda, abuse of user data (Cambridge Analytica), ratting activists out to authoritarian governments, nerfing community moderation and letting Nazis go to town while yawning when users complain, while at the same time, anyone left-wing gets instabanned for jaywalking…
Capitalism.
Capitalism is like cutting off your wings because you believe the reduced weight will make you fly higher.
It’s shocking how accurate at how the oblivious and infuriating it is.
Most of the aspects have already been covered but I would want to add one:
This was always the plan, it just wasn’t as highly prioritised as growth.
I work as a developer at a big tech company. We (the company) had our roadmap and it was mostly about getting more users. The more users you have the day the economy turns - the better off you are (… If you manage to turn an profit).
So when the economy went to shit and we (and other tech companies) no longer can loan money for free to cover our running expenses - the priorities shift. Working towards attracting more users is only going to increase your costs at the point and you don’t want to run out of money. So all roadmaps changed and cost saving efforts became the highest prio all of the sudden.
This was always the plan, to put a world in your hand…
And then squeeeeze it until the last drop of blood dripps out of it.
Part of it is the standard crisis of capitalism, the profit you get from doing the same thing always declines, so over time you have to push up revenue (increasing prices, forcing people to pay, showing more ads, gathering more data, etc) & push down costs (fire engineers, run on less hardware, etc)
Part of it is capitalisms natural tendency to create monopolies, and the lack of competition in a given field causing the company to then lose sight of what it’s good at to compete in a bigger field.
Part is that interest rates mean loans are no longer cheap, so taking on debt to get customer, to at some point down the line make money, is a less viable plan. Twitter is a special case where the bad loans are because that was the original deal not interested rate related, and Musk is trying to pull all of the enshitification levers at the same time.
Part is that CEOs generally don’t have a fucking clue about their products or what they are doing (it’s a circuit job about who you know/blow, not what you know), so once one CEO starts firing/enshitifying, the rest just copy them so as to not be left out.
I wouldn’t blame them being pure greed on capitalism honestly.
It’s not pure greed though, if companies do not push down costs & push up revenues enough, they get replaced by those that do.
It is capitalism doing what it does “best”, here’s a clip from I’m A Virgo that explains it better than me: https://youtu.be/lpagmvYZKRc?t=84
There are niches where companies can hide out for a while, especially if they provide a service that needs local implementation, but social media isn’t one of those niches, if you get outcompeted, your toast, no matter how big you peak, MySpace, Tumbler, Digg, Slashdot, etc, this is the monopolization effect of markets.
It’s simple, despite what big tech companies are telling themselves, current algorithm for personalized online ads doesn’t actually work, because you can’t force people to be interested something just by shoving media in front of them.
Instead of realizing that people want genuine human engagement to tell them HOW your product can help solve their problems, we are at the phase where tech companies double down on their incorrect assumption and thinks to make people want things, they just need to shove more things people don’t want to see in front of them.
I’d say synchronous targeted ads work very well. I.e. showing me ads when I am searching for something explicitly on Google or Amazon. Asynchronous targeted ads - yeah, less so.
It’s so common there’s even a term for it now, “enshittification”
To quote the article that describes it:
“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.”
Source: https://www.wired.com/story/tiktok-platforms-cory-doctorow/ The source is about TikTok but the author has gone on to describe how this applies to basically every modern tech company in various interviews.
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This is the only response required. I’m quickly becoming exhausted of reading everyone’s epiphany on “enshittification” as if it’s some natural eventuality. Yes the money must eventually come, but not always at the expense of platform quality. If anything the results we see from “enshittification” are due to the fact that most businesses fail eventually due to poor leadership.
Just to echo what you have already said, money today is simply more expensive than it used to be. We even see the impacts of macro monetary decisions on households.
Buying a house or a car on loan is far more expensive than it would have been a year and half ago. A $500,000 house in 2021 would cost $2,000 a month at 2.75% interest and 20% down. Today same that payment is $2,800 or 40% more expensive at 7.75% interest.
Modern companies live on revolving debt, so if their suddenly gets 40% more expensive and that same amount of money is also less valuable at the same time (inflation), then they need to make up the difference somehow.
Corporations are trying to find the balance between squeezing more revenue to pay their ever increasing debt bills while also not destroying the environment that attracted the users (their products) in the first place. Twitter and Reddit are just going about it horrifically because of poor business leadership and decision making. Netflix’s approach appears to be sustainable, and there is no doubt that YouTube will be fine in the long run.
This is not meant to be apologetic to the decisions made by Twitter and Reddit. They’ve made their bed through their own horrible decisions, and now they’ve got to sleep in it.
I remember a video, I think from ColdFusion, explaining how the economy has been working on debt on top of debt since the 2008 crisis. The whole idea of “grow first, profit
neverlater” is only possible thanks to endlessly rolling debts. A bubble begging to burstAnd the irony is that the same motherfuckers responsible for that problem will be responsible for this next one AND they’ll still stay rich, while we slave away having to deal with “economists” complaining that we want to own houses.
Buying a house or a car on loan is far more expensive than it would have been a year and half ago. A $500,000 house in 2021 would cost $2,000 a month at 2.75% interest and 20% down. Today same that payment is $2,800 or 40% more expensive at 7.75% interest.
Note that mortgages are not what companies pay for loans.
https://fred.stlouisfed.org/series/BAMLH0A3HYCEY
CCC bonds yield is the “low-quality” bond market, and is closer to what you might expect a no-profit internet company to be borrowing money at. 2021 was 6%ish interest rates, but today is ~12%+.
But 2016 was ~18%+ rates, its much more volatile than the mortgage market.
You are absolutely correct! I just couldn’t think of a way to further dive into that nuance, but I also wanted the example to be relatable and tangible. Thank you!
Couple this with the idea that Elon is proving you can do something drastically unpopular to increase profit, and most users still won’t abandon the platform. Tech companies, traditionally, move quickly off of FOMO to make a profit. Elon has brazenly validated many choices that other companies have generally considered risky up until his point.
I would expect this to get even worse now that spez has doubled down. Many people talk about how Elon and spez are ruining their platforms, but at least for now, they have seemingly gotten away with it. Some users have migrated to other platforms, but many have stuck around.
Short answer : Enshittification.
Long and brilliant explanation here : https://www.wired.com/story/tiktok-platforms-cory-doctorow/
This concept is also why I’m so hopeful for federated software. The federated model means that there’s no single instance that holds all the power. Many of these instances are run by admins of their own kindness and initiative. And at worst, if any instance were to start being “enshittified,” people could easily move to another instance and continue participating in the greater network.
Between all of what we’ve seen unfold in the last few months, and even weeks, on Twitter and Reddit, it’s safe to say that “enshittification” could be reaching critical mass. That’s why I came here, after all, and I’m looking forward to seeing this community simply persist here on the web.
Original on Cory Doctorow’s own site here
That is one of the best summaries of the Internet I’ve ever read. Maybe the best. That is quite the article, thanks for sharing.
Jesus. It’s articles like this that make me both be thankful for Doctorow and his ability to put tech shit in terms is non-techies can understand.
Seeing boing boing articles in my Twitter feed was one of the reasons I started using it years ago. When junk started filtering in, that’s when I stopped using it. When musk started messing with politics and using Twitter to push his views, that’s when I nuked it.
That was an excellent article. Thanks for sharing!
free money has dried up, now they need to monetise your habits.
Interest rates go up > VCs can’t barrow free money and demand a return on investment > companies try to demonstrate profitability > enshitification
i hope that the internet becomes sort of how it used to be, made by the people for the people and ran by the people instead of made by a few huge corporations that sell our data and constantly try and squeeze profit out of their platforms. i love the sense of community in decentralised social media and there seems to be next to no arguments most places. im really enjoying everything so far after joining
Me too. I feel much calmer scrolling through Lemmy as opposed to Reddit or Twitter. I have way less of an urge to troll over here.
Same. Well I didn’t necessarily troll reddit, but I also had no problem telling bigots where to go or what to suck. Less people to yell at on this platform lol
Not really “all of a sudden”, this has been a long process. The often repeated enshittification thing is fully valid. The short version is:
- start out
- grow and expand as much as possible
- bring in advertisers
- make everyone depend on your service
- abuse your powers, since everyone “needs” your service
Google, Amazon, Facebook, Twitter are the more obvious culprits, but every big tech company does something similar, one way or another, even hardware companies like Intel or Nvidia
Great article thanks for the link.
nVidia was very popular as the scrappy upstart during the Riva128 and TNT/TNT2 Ultra days. Their popularity with users was very high at the time. Enshittification really got started with them during the early Geforce days and just spiraled around Geforce 3. When they got their asses spanked by ATI with the R300 series they had to de-shittify for a brief time.
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A lot of the 2010’s tech was fueled by venture capitalists looking for the next big thing. They saw things that were extremely popular, like Facebook, Reddit, YouTube, etc, and figured “well we’ve got a ton of users, surely we can find a way to make money off of this.”
Some investors are starting to realize they aren’t actually making much money or costs are blowing up without revenue following. People are starting to back out of this bubble without clear goals towards profitability.
