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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?

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[-] designated_fridge@lemmy.world 99 points 1 year ago

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.

[-] Raildrake@vlemmy.net 20 points 1 year ago

Gain a monopoly, get users addicted and reliant, then change the rules of the game and hope they stick with you. It's happening now because of the economy for sure, but it's not like it's surprising.

[-] ultrahamster64@lemmy.world 10 points 1 year ago

This was always the plan, to put a world in your hand...

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[-] Rinox@feddit.it 81 points 1 year ago

I think it's a consequence of higher interest rates drying up VC money, meaning that tech companies now have to actually be profitable, rather than just grow.

If the plan was grow now, profit later, then later has come

[-] InverseParallax@lemmy.world 21 points 1 year ago

Nailed it, investors are demanding profit increases, it's not just interest rates (though they're the main reason) but also the corporate tax cuts in 2018 basically dumped a ton of profit onto corporations because they repatriated all their offshore cash they'd been hoarding.

That bump lasted 2 years, but the expectation of higher revenue is still there, it doesn't matter if you got lucky at slots last month, if you make your normal salary this month investors will be absolutely pissed.

[-] insomniac@sh.itjust.works 23 points 1 year ago

This sounds too stupid to be real but I was working for one of the largest corporations in the world during this period and we were congratulated on 20% growth even though we did nothing. Of course we didn’t get an extra bonus or anything but they acted like we had an incredible year when we really just had an average year with a massive tax cut.

Then the next year, our goal was to grow at 20% again and when we missed it by 17%, no one got a bonus or raise.

This timeline is the stupid one.

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[-] AgentOrange@lemmy.world 11 points 1 year ago

This is also a great example of why higher interest rates aren't automatically a terrible thing. In general, it's probably a good sign for the economy that companies are expected to be profitable. Means resources are being used well. The limitless VC money kinda meant any dumb idea regardless of merit got funding.

[-] MsPenguinette@lemmy.world 10 points 1 year ago

I wish we lived in a society where not everything needed to be profitable. People deserve treats and sucks to have things that made our lives better go awake because shareholders demand money

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[-] zos_kia@lemmy.fmhy.ml 9 points 1 year ago

No. I don't mean to be rude but most of that message is wrong.

VC Money is very much not drying up. 2023 has seen record rounds in most markets. What is drying up is "VC Money for early stage startups with no revenue, no traction, and barely a functional idea", but even that is not new it has been going on since at least 2018. Remember that guy who raised 1.5M$ with an app that just let you say "Yo" to your contacts ? That was 10 years ago. Those times are dead and buried.

Then the link between VC markets health and interest rates is... contentious to say the least. VCs don't borrow money - they raise funds from family offices and individual investors, every 2 or 3 years. So every change to the financial landscape will have a progressive effect over 3 years, not a brutal one after a few months. Also you have to bear in mind that the people who bankroll VCs are looking for performance of at least 2X over 10 years. Interests would have to go up to 7% to even be in competition with VC investment. Of course there's a psychological aspect to investment so the effet is not ZERO but it's not as automatic as saying "interest go up => vc dry up".

Finally, the companies we are talking about are in vastly different situations and not necessarily looking for VC money. There is no explaining their behaviour with a single cause, what we're seeing is probably a cluster effect, because executives are like fish they always follow the movement of the other fish in their field.

  • Youtube has been profitable for years and is part of Google which is massively profitable. VC Money has no bearing on their decisions - they are in a quasi-monopoly with no credible competition and want to squeeze their users out of greed
  • Reddit has a long and complicated cap table including some very powerful institutional investors so they are aiming at an IPO rather than more VC money. They're in a pretty good place actually with 1.5 billion MAU, and in the process of shaking off the 10% of hardcore users who are super hostile to monetization. Their monetization is so low (<2$/month/user, when the competition is 10 to 20 times higher) that they could bear to lose 50% of their userbase and still make bank with the remaining ones. They don't need VC money right now.
  • Twitter is... uh... well there's no telling what Elon is up to but he is absolutely not raising any VC money especially after the shit he's pulled off since the buy-off. I think it's just a bunch of bad moves because he's inept at the social media game.
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[-] RIotingPacifist@lemmy.world 74 points 1 year ago

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.

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[-] lycanrising@lemmy.world 50 points 1 year ago

free money has dried up, now they need to monetise your habits.

[-] cantstopthesignal@sh.itjust.works 48 points 1 year ago* (last edited 1 year ago)

Interest rates go up > VCs can't barrow free money and demand a return on investment > companies try to demonstrate profitability > enshitification

[-] SulaymanF@lemmy.world 46 points 1 year ago

It's a process known as Enshittification.

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.

The rest of the read is quite good.

[-] kromem@lemmy.world 43 points 1 year ago

No tech burst.

It's just a cold recession. No one is admitting it, including consumers who keep spending away savings.

But companies are aware of it enough they are tightening purses preparing for harder times ahead.

Of course, it's a self-fulfilling prophecy.

If everyone makes their products worse chasing this quarter's dollar, and people leave, those companies are going to have a harder time.

Especially as it becomes easier and easier to compete against them at scale.

Just wait until new feature requests and bug reports for something like Lemmy can be handled within moments by AI at dirt cheap pricing.

A very interesting future awaits around the bend.

[-] Quill0@lemmy.digitalfall.net 39 points 1 year ago

I find it the ad bubble is bursting so companies are increasing costs for api access and divert people into using their own apps (so they can't block ads and such)

[-] GoodKingElliot@feddit.uk 35 points 1 year ago

Well, I hope the Fediverse works out. Otherwise I think were gonna have to go back to hand printing zines.

[-] Chalky_Pockets@lemmy.world 35 points 1 year ago

You joke, but Reddit did something to piss me off a few months before the current fuckery, and I decided to find an alt and there weren't really any, like I found Mastodon but that's more of a Twitter replacement, never encountered this site while searching. What I ended up doing was downloading a bunch of books and putting them on my phone, then putting the books app where my Apollo app used to be on my homescreen. Now, more often than not, when I go to scroll, I end up just opening a book. I've got a little over 40 on there, they keep my progress, even across devices, and they work when there's no signal so I no longer have to fear public toilets with shitty cell signal lol.

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[-] Sanctus@lemmy.world 28 points 1 year ago

We have reached the stage where the snakes have grown large enough that they must prey on their own tails, for there is nothing left to eat.

[-] Pup@lemmy.world 28 points 1 year ago

Because the days of just shoveling money into various silicon valley projects in the hope that maybe they'll turn a profit eventually is over. Big investment firms now want an actual return from their investment, and because of that, tech companies are desperately trying whatever they can to turn a profit from these massive services that are also very expensive to run. That usually comes in the form of changes that makes things harder for the users, but is significantly more profitable for the companies that run them.

[-] Contravariant@lemmy.world 16 points 1 year ago* (last edited 1 year ago)

For some more context, this is probably tied into at least two things. One is that the bubble was starting to be recognized for what it was. The other is that interest rates became positive again, so the bar for a good investment suddenly went from "I'll be happy if I get my money back" to "I want to be paid back double within 20 years".

[-] wizel10@lemmy.world 8 points 1 year ago

I'm just waiting for the ads bubble to explore. There is very little real ROI. As a user, my eyes and mind are well training to avoid seeing any ad that traverses the adblocker, I never clic on any PROMOTED content nor on any link of the ad-top results. Always REJECT cookies I've the option. The advertising companies pay on what they believe I'm seeing, but on what I really see (and care). Just waiting for the day they realize and stop wasting money and disturbance.

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[-] panja@lemmy.world 25 points 1 year ago

Companies expect infinite profit growth

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[-] sknob@lemmy.world 25 points 1 year ago

Short answer : Enshittification.

Long and brilliant explanation here : https://www.wired.com/story/tiktok-platforms-cory-doctorow/

[-] TheGreenGhost@lemmy.world 11 points 1 year ago

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.

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[-] Grant_M@lemmy.ca 24 points 1 year ago

When billionaire fascists start being held to account, they lash out.

[-] feedum_sneedson@lemmy.world 13 points 1 year ago

Let's stop misusing the word fascist.

[-] Hypersapien@lemmy.world 9 points 1 year ago

Elon Musk just said that people without children shouldn't be allowed to vote.

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[-] hoshikarakitaridia@lemmy.fmhy.ml 21 points 1 year ago

There are a lot of reasons for this general trend, but let me add my two cents to make a case for the sudden influx of user-opposed changes:

I don't have a source for this, but I remember that Linus spoke about this on the LTT WAN-Show. Basically, abunch of big silicon valley investors are pulling out of all of the big platforms, therefore leaving them with a huge hole in their profitability. This means, that right now a lot of them are scrambling to scrape together more money over time, so all of those platforms are sustainable.

Obviously this has to observed in conjunction with all of those are trends that are already mentioned by other comments, but this gives more basis as to why now, and why to this extent.

If someone else knows what I'm talking about please add quotes and sources because I don't like the good old 'dude trust me' guarantee one bit.

[-] kubijoe@programming.dev 8 points 1 year ago* (last edited 1 year ago)
  1. Reddit API charges: Reddit announced it would begin charging for use of its API, specifically for companies that crawl Reddit for data without providing any value back to the users. This change does not apply to developers building apps and bots that enhance the Reddit experience, or to researchers using the API for academic or noncommercial purposes. Reddit's move is tied to its attempt to monetize the vast array of user-generated content on its platform, which includes data used to train text-generating machine learning models like OpenAI's ChatGPT. This announcement comes as Reddit is preparing for a potential IPO later this year. It is estimated that Reddit made $350 million from ads in 2021, a figure that pales in comparison to Meta's and Twitter's ad revenues 1

  2. Twitter's "Ad-pocalypse": Twitter saw a significant drop in advertising revenue in December 2022, with ad spending from top brands falling by 71% compared to the same month in the previous year. Major corporations have been pressuring Twitter over its decision to restore banned conservative accounts. There was a similar decrease of 55% in November 2022 compared to November 2021. Twitter relied on ads for 89% of its $5.08 billion revenue in 2021, so this decrease in ad revenue is likely a significant factor in Twitter's estimated value reduction. Corporate advertising boycotts have often been used in the past to pressure social media platforms into adopting stricter censorship policies 2

  3. VC moving to greener pastures: There has been a significant increase in VC and PE investment into climate tech, which includes technologies focused on reducing greenhouse gas emissions. In the first half of 2021 alone, climate tech attracted over $60 billion in investment, which is a 210% increase from the $28.4 billion invested in the 12 months prior. This shift has been driven by a renewed focus on ESG in private markets, emerging regulations and standards, and more companies committing to net-zero strategies. The United States leads in climate tech investing, attracting nearly 65% of VC investment, $56.6 billion from H2 2020 to H1 2021 3

Note: Sources not all quite unbiased. Take a grain of salt.

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[-] Ranessin@feddit.de 15 points 1 year ago

Money is tighter since the inflation affects VC and stupid money flowing in. Stock prices are not going up, people have no money to play with (see the death of NFTs at the same time, the definition of a stupid investment).

[-] hi117@lemmy.world 15 points 1 year ago

Because users are not the customer but the product for others. And with network effects meaning there's less competition (ie no place to go to), then they no longer have to attempt to appease the product and can focus on appeasing customers.

[-] Zithero@lemmy.world 15 points 1 year ago

They forget the users are their base, not their employees, or are bought by idiot billionaires who think they can turn the platform I to another money printer (or tax write-off)

Spez in particular saw Twitter and thought that would be a great idea.

I don't think he understands he's about to be CEO of Tumblr 2.0

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[-] yrmitz@lemmy.world 15 points 1 year ago* (last edited 1 year ago)

Because usually the greed, money and power corrupts, no matter how good you are in the beginning.

[-] xaxl@lemmy.world 14 points 1 year ago

Oh you thought the end goal was to make a good website. Hahaha.

[-] ICastFist@programming.dev 13 points 1 year ago* (last edited 1 year ago)

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

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[-] joel_feila@lemmy.world 13 points 1 year ago

https://www.wired.com/story/tiktok-platforms-cory-doctorow/

Enshitifacation. Twitter onlyy turned a profit once, YouTube is about 20% of global bandwidth and has turned a profit. companies don't just want money they want the amount of money to always increase. So they turn to ever more exploitation to try to get it.

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[-] QubaXR@lemmy.world 12 points 1 year ago

It's not anything new and nothing "all of a sudden", unfortunately. Facebook, Tumbler, Google - all done stuff like that before. Even for Reddit this is not the first protest blackout and not the first time they treat users and mods like garbage.

It simply is now happening to the apps and services you (and I) use daily, so it hits closer home.

All modern stairs are built on the same terrible foundation: Attract users, no matter how much money you lose. Once you feel strong, introduce fees, ads, hike the prices and try to regulate years of financial loss.

Happened like clockwork, and companies going public are a clear sign it's just around the corner. (Kind of like any free mobile app will ask you for a 5 star review, just before introducing monetization schemes)

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[-] angrynomad@infosec.pub 12 points 1 year ago

Just wait till you have to pay per email. You're not still using Gmail are you?

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[-] Ainiriand@lemmy.world 11 points 1 year ago

Their cash overlords want returns on their investments.

[-] Clown_Tempura@lemmy.world 11 points 1 year ago

The 'trust thermocline' occurs when an organization repeatedly takes their customers for granted, and they reach a critical point of 'no trust return' and just leave. Essentially, if you gradually provide less quality while charging more money, you erode trust- and if you lose trust, you don't actually ever get it back. See: Twitter. And possibly now Reddit. Great term, I love it even, but I hate that the lesson these people are learning isn't 'hey maybe we should stop pissing people off without good reason' and is instead is "this is acceptable risk and we should continue playing chicken with dissatisfied users to make our shareholders happy."

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[-] jordanlund@lemmy.one 10 points 1 year ago

They haven't yet realized that a platform dependent on user created content and user run moderation, is infinitely replaceable. See Fark and Digg.

Reddit and Twitter and just the latest to learn the lesson. Without your users, you may as well be MySpace.

[-] super_user_do@feddit.it 9 points 1 year ago

They've reached such an economic power that now they just want to be as profitable as possible, crushing any kind of competition of popular pro-user participation while profiting over our data and content

WE, the users, made them able to do so, giving them economic and sometime even geopolitical power. But WE still determine whether they can exist or not man, we still have the power to bring them down. It's time to take back what's ours!

[-] wildekek@feddit.nl 8 points 1 year ago

Venture capital has shifted very quickly from companies HOSTING content to companies SCRAPING content (LLM’s). This means renting compute is now very expensive and moving into the hands of ‘AI’ companies. It’s like trying to fly a plane while monkeys are tearing the wings of.

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[-] balrog@lemmy.world 8 points 1 year ago

Capitalism.

Capitalism is like cutting off your wings because you believe the reduced weight will make you fly higher.

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this post was submitted on 02 Jul 2023
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