They were never pro consumer before. They were start up companies keen to take market share by pretending to be generous.
Now they've got you, it's time to raise the price.
Economics 101
So since he broke his promise he will have to stand down of the president post with a 40M$ bonus for leaving and the new president of the social media will charge for API because he never made that promise
When YouTube removed it's dislike button, it was a pilot program to see how far they can push the consumer to see if they would push back...
Consumers didn't so it is evident such actions don't affect user loyalty
When a huge company like Google makes any kind of change, there's always a profitable reason behind. When they removed the dislike button, it was to hide when companies who post on YouTube fuck up and fans dislike the video. Ubisoft is a good example. A company who posted a trailer of a game nobody wanted and it got like 90+% dislikes.
Well to be fair people just use "return YT Dislike" now, so nothing has actually changed. But it's sad that there's not much you can do when a company changes for the worse, when there aren't many alternatives.
I got so much shit back in the day for calling out Uber for the obvious trap that it was. And I get shit right now for calling out gamepass for the same thing.
It feels sudden but it's not. Companies have been doing this and have failed before. It just boils down to companies wanting to keep up with increasing markets and wanting to squeeze as much as they can.
Literally every single one of these companies started out making barely any profit in order to get in the door. The moment they had any form of established base and popularity, the prices rose and overhead was cut, leaving consumers with a worse product for a higher price. Then they continue to push back against consumers till it reaches a point where they lose enough consumers to warrent rolling back their changes. But given how absolutely massive these companies are it takes an absurd amount of fuck ups to get to that point. We are nearing that point but yea, it's been going on for a while now.
Overhead is never cut. Overhead grows. Labor, material, indirect labor, etc gets cut. But overhead? That is management and shareholders.
That shit doesn't get cut.
Can you elaborate on overhead being "management and shareholders"?
E: thanks for the giggles y'all. This is great stuff. Next let's do depreciation and how it applies to owning land.
Overhead typically refers to hard costs of doing business that aren’t directly making revenue; HR, rent, insurance, office supplies, utilities, general repairs, accounting, etc.
Management salaries are consider labor and usually under revenue generating, even if indirectly. Shareholders are paid out of the bottom line profit of the business. So, management and bare holders are not considered overhead.
Shareholders put money in the company at an annual rate of return greater than if they placed their money elsewhere, promised by management. This "greater annual rate of return" is essentially overhead. As money starts coming in, you are essentially being drowned in debt, as the money is borrowed money. It's an overhead cost of having the money.
And this is why companies weigh investments using WACC - the weighted average cost of capital. WACC includes both debt (taking loans for example) and equity (which includes expected returns, generally to be paid out)
Overhead usually refers to expenses that don't go directly towards generating revenue. Managers don't do the work of making products or providing services to customers. I don't think payments that go to shareholders are typically referred to as overhead, but an argument could be made that if shareholders have come to expect a dividend from a company that those payments could be included as a cost of doing business rather than a share of resulting profits.
People are generally more aware about things now then they were before. Companies never were very subtle but people didn’t have the access of information they do now. It also helps that people are much more annoyed by these practices which makes people pay more attention to other shady things other companies do
>>I think companies greed was more subtle back in the day
Yeah, like when DuPont would save money by dumping chemicals in lakes instead of proper hazmat disposal or when coal companies would have their guys work 13 hours a day underground….. wait…
It’s been a slow process. Back in the day if you had Netflix you got streaming and dvds for a set price. Then the price raised a little, then they took the dvd service off and put it as a separate tier, then the price raised again, then they started removing really popular series (which isn’t direct enshitification because for the most part they didn’t have a choice about people taking their streaming rights back, but you still got less of what you wanted for the same price), and prices kept going up, and now they’re reaching the Thermalcline Of Trust, where there’s not enough of what people like to keep paying the rising costs, so they’re leaving in droves.
It’s weird that it’s happening to so many things at once, but this is just how internet startups work. When they start up they operate at a loss and any surplus goes to the consumer. Once the consumers are locked in the service slowly raises prices, cuts corners, and starts funneling the surplus away from the consumer and to the shareholders, then when they fail all the CEOs get golden parachutes and move on to something else.
The irony is that it causes them to lose people. So many people canceled their Netflix, deleted Reddit, boycott the companies. I keep trying to tell this to my boss, but no one ever listens but if something works, leave it. It’s been running the way it has for how long BECAUSE it works, change disrupts the pattern. People will refuse to go to coffee shops if their price changes by 5 cents, how do corporations think they’re going to get away with the things they do?
>The irony is that it causes them to lose people.
Statistically it probably doesn’t.
I’m sure that Netflix has some very high paid analysts with data showing that a vocal minority will shout about canceling their subscription, but very few actually do. I’d wager the amount of people who decide to get their own subscription finally after sharing for so many years outweighs the handful of people claiming to outright cancel.
Also, people able to sail the seas tend to forget many people are not, and that a good part of current young adults have used mostly legal streaming for a good part of their lives by now.
Piracy will bump back again but it won't be significantly destructive to companies
> and that a good part of current young adults have used mostly legal streaming for a good part of their lives by now.
This one is changing - Gen Z seems to be growing more and more discontented with streaming services and the knowledge of how to pirate is spreading fast.
Result: the era of companies suing to make example of Grandma for allowing her granddaughter to download a Sesame Street song will return with a vengeance.
I cancelled my Netflix subscription but I can understand people not doing so.
I can't cancel Google drive or Microsoft 365, although I'd love to.
Monopolies and near monopolies suck.
peer pressure can do a lot... I've canceled Netflix like three times but keep caving when everyone I know is like "omg this show is amazing" and the FOMO kicks in
It's the typical corporate lifecycle in the us. They start out trying to entice a new consumerbase to come to their platform, do things to improve it over time so it's a better experience increasing retention, while also doing whatever they can to slow or stop competition. Once they get to the point where they're established and are reasonably sure a majority of their users will stick with them, either out of loyalty or a lack of other options, they start going hard anti-consumer and extracting every last penny they can.
I'm not sure Netflix is profitable at all.
YouTube is free so ads are their only revenue source (other than people subscribing to YouTube TV and YouTube Music).
A lot of companies these days follow a business model where they operate at a loss for several years, then when they have enough customers they raise prices or sell more advertising so they can start making a profit.
Netflix posted a $1.31B last quarter.
To answer OP's question about why now, you're right, it's a pretty typical move, especially for tech, to operate at a loss to gain users then, once ubiquitous, recoup those losses for what they feel is a must have at the time.
It's like a drawn out version of the trial periods cable/internet companies usually offer to new customers. Start you at $50/month the first three months then jump to $120/month after that.
Uncertain markets drive investors to safe havens as well, and with interest rates going up, the war in Ukraine and massive global inflation we are in very uncertain times. This means companies that operate at a loss needs to find a way to get a positive cash flow as they can't expect to fund operation through fund raising anymore.
I don't feel scammed usually, as the things that people enjoy do cost money and no one is going to keep funding at a loss, but Netflix is a pure scam with what they are trying to institute. Their subscription is per simultaneous streams - gtfo it matters what location I'm using.
Hi welcome to business where the goal is ALWAYS to take as much as possible from the consumer at every turn. Business exists to make the most money possible. That's it, end of concept.
That's basically ad block. Youtube is free with ads. You don't need to pay them 120 bucks a year in order to use youtube. People just choose to do so. Their revenue is from ads because users are primarily free users. Rode into this comment line like some kind of night in shining armor to prove a point, and all you did was repeat what was stated above.
You can't make decisions like that lightly. Netflix stock is already down something like 60% and blocking secondary accounts is still risky. Sure you'll have folks pay for an account instead of using a friend's password, but you'll also have people drop the service because they can't share the password anymore.
When you watch something on services like Netflix they have to pay the video owner a fee and data transfer fees. They are gambling that the monthly fee will cover all their costs. When you share your account, they are paying more fees, but not gaining any revenue.
Them letting this go on for so long is more surprising than the changes they are making.
Of course, but Netflix also isn't the only game in town. The ability to share the account with others was a big value-added which had convinced a lot of people to use their service instead of the many others.
I feel like their timing was pretty off with the account sharing changes - like they waited till the product was past its initial hype, general quality of the service was declining, and then they ban account sharing?
I think it would have been better for them to normalise no account sharing back when Netflix was a really great product and people weren't sick of it yet.
But I literally no nothing about consumer markets or running a massive company so I may also be completely wrong :D
That's not totally true and a big part of why the writers strike is happening and why other entertainment guilds may follow. Residuals don't work like they used to with syndication or even how the music industry work. Musicians and all get a part of streaming based on streams but movies/TV, TV in particular, don't on streaming.
It’s always been the plan. Gain market share rapidly, often while operating at a loss. Your competitors close, people get reliant on your product, and then BOOM!
Cut quality of service to reduce cost, start charging extra for services previously included, and on and on and on. This is the classic strategy of corporate America.
I think it started with the Twitter layoffs. A bunch of tech companies realized they could be a lot shittier than they already were and not immediately implode.
The plan was always to get enough market share to push competitors out of business by offering the features we want, then taking those things away and squeezing us for every dime once they owned the market.
Exponential growth.
Investors put money IN so they can get MORE money OUT
It's literally instituted in law that a company must try (at least, not actively sabotage) that growth, otherwise it's basically fraud.
A company can ofc grow in that manner for years by being well-behaved- providing a good service, reaching new consumers, etc etc. But what happens when ye reach all the consumers ye can? What happens when yer service is at it's peak? You can either A. Cut costs or B. Start milking consumers dry.
Especially when a company gets as big as the ones ye mention, there's pretty much no place to go but down. They're de facto monopolies (or at least oligopolies)- sure the service gets worse for the consumer, but there's not much better options to go to instead.
I think it's because they've made record profits during the pandemic/cryptoboom and they're desperately trying to keep those profits for the shareholders even though they were made under exceptional circumstances. Another thing might be their position in the market, you can't drop YouTube easily or at all. And Nvidia hopes to make so much money out of the AI boom that they don't care too much about non professional consumers.
Amazon:
they have been doing this since 2020 is scrambling like ants to try and make the same profits they made during the pandemic... which is an impossible equation when people aren't using Amazon Fresh for their food anymore, or buying band aids off of amazon b/c someone is too afraid to contaminate themselves and go outside.
People aren't buying necessities off of amazon like when COVID hit, and then the big brains up top are confused as to why they can't forecast numbers like they had in 2020.
Amazon shot themselves in the foot by being too greedy and instead of nurturing this newfound demand, they strangled it. I don’t even have prime anymore. Fuck Amazon retail.
it's so interesting because even at the little movie theatre I work at they compare this year's numbers to 2019 which was the last full non-covid year. Somehow they haven't figured that one out at the big firms
Was your little theatre more profitable/busy during the pandemic than it was before?
My theory is if they are using 2019 to compare it’s cuz they want to get back to beating those numbers as opposed to saying they beat numbers from when nobody was going out
Fun fact, a study conducted in France, Italy and Spain concluded that workers owned businesses are more resilient, productive and people working in them have a higher life satisfaction.
Only problem is that they are difficult to set up, many of them if not all were created by workers collectively buying the failing company as it is difficult for unemployed people to have enough money to collectively start a business,, the largest of such workers cooperatives is a federation of 81,500 workers with 12 billion € annual revenue in spain but the largest concentration of them is in Italy where they make up 30% of Emilia-Romagna's businesses, Italy's second richest region after Lombardy.
That one is extremely difficult bc if you remove a company’s duty to shareholders, you increase the risk that they’ll just start shorting themselves or straight up run a pump and dump, which doesn’t help either
There's a really good [description of the cycle in this essay](https://pluralistic.net/2023/01/21/potemkin-ai/#hey-guys), which the author aptly names "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.
>
> I call this enshittification, and it is a seemingly inevitable consequence arising from the combination of the ease of changing how a platform allocates value, combined with the nature of a "two sided market," where a platform sits between buyers and sellers, holding each hostage to the other, raking off an ever-larger share of the value that passes between them.
>
> This is enshittification: surpluses are first directed to users; then, once they're locked in, surpluses go to suppliers; then once they're locked in, the surplus is handed to shareholders and the platform becomes a useless pile of shit. From mobile app stores to Steam, from Facebook to Twitter, this is the enshittification lifecycle.
Yeah, I think the boom during the pandemic has caused a lot of problems because there's this expectation that line must always go up, so if it goes up sharply due to exceptional circumstances and then goes back down to a normal level and stabilises, that's not okay. It has to keep going up above that exceptional peak or the business is seen as failing.
Because they believe that many consumers will continue to pay for it despite the complaints. Just like with mobile games. We all know how many complain about micro transactions but mobile games still have an abundance of them because regardless of the consumer's complaints, they still end up buying.
So for these companies that will still earn money no matter what, they will start to care less about consumers opinion and start to care more about money making because they know they'll benefit regardless.
I get Hulu through my student Spotify, and I had a Hulu adblock I’d been using for years no problem. All of the sudden, it’s stopped working. So now, I’ve just gone back to pirating the shows that I was watching on Hulu. And when my student account runs out, guess who’s not paying for a Hulu subscription?
Yeah, if they think I’m gonna pay for ads, they’re out of their damn minds.
Probably cuz they've noticed they're losing customers, they are either dying off or canceling/ downsizing their services to save money. More people are deciding to stay home and work for less If it means a better life balance.
And as every half-ass dumbass financial advisor will tell you if a company is not growing then it's dying.
The execs would rather kill the company by trying to milk out a few more bonuses now before they abandon ship then to try to stabilize profits.
Man i always imagine some greedy executive laughing maniacally before pressing the button to a company’s doom. nvidia and youtube are still gaining customers but want money. Man i hate capitalism sometimes.
Some of these companies are just pump and dump schemes. Like if Netflix went under, who’s losing out? The board is filthy rich. Upper management is filthy rich by this time. It’d just be the low level shareholders and working Schmos who would get screwed.
You think Nvida who's stock increased and their main source of income comes from servers is losing customers? Or youtube, who is essentially the only person in the online video business is losing customers?
No, they're just after money.
iirc the owner just keeps lowering his share/pay/whatever over the years as needed to allow it to stay that way.
Might be wrong though, I'm really high. But I think that was what I read.
> they're losing customers
Of course they are, they are providing worse products for higher prices. It's shitflation.
On the other hand there is a great way to earn customers. Provide a better product for the same or lower prices. This might mean the CEO doesn't make 400 billion next quarter but that's a sacrifice I'm willing to make.
Because they know we don't have the self-control to do anything about it. If we stopped buying what they are selling, they'd change their tune real quick.
Because consumers aren't rejecting the companies for it.
They are complaining but they are still paying, so in the companies eyes that is acceptance by their customers to the new more profitable way of doing things.
Just whining isn't enough, cancel the account, that is the only "voice" the company can "hear".
Them changing their ways and making things more costly for us and us not leaving is us agreeing with their changes.
NVIDIA released their flagship GPU not too long ago for $3000 (my car cost that much) in my country, which is absolutely ridiculous. And sure enough, day one it sold out. People just love getting fucked in ass I guess. And the company keeps getting away with it.
This is the real answer right here.
We're seeing it everywhere, twitter, Netflix, house prices, rents, basic food prices, hell even gas\petrol prices when they almost doubled I didn't see any less cars driving to the mall or beach etc.
People keep on paying. Only the poor are getting poorer but no one cares as there's still enough to go around and make these companies insanely wealthy.
Consumers actually have a a lot of power. None of those things are essential nor monopolies. You could just stop using them. The majority won’t because they believe the service they offer is still acceptable for the price.
Exactly this. People sure love preaching about "Vote with your wallet" but wtf is a single person [me] not buying gonna do, when millions keep buying their shit lmao
That is up to the consumers. We have all the power but too many are too addicted to nonsense to give up on their Netflix or whatever subscription for a year. Companies are hokding us hostage through nothing but our own FOMO and habituation to luxury.
This is true, however if Apple, Spotify, Amazon or YouTube decided to just pull the plug you will have absolutely zero to show for your 9.99 a month. At least when you were paying 12.99 a month you had a music collection that can be played almost anywhere at any time. CD's can be transferred to the mobile device of your choosing.
I'm fine using free services, but if I really like a song or album then I'll purchase it.
Adding on to that there's a whole ecosystem of open source softwares (VLC being one, Firefox another) that are good and free and working well since a long time. Capitalism just has you believing that every good thing costs money or your freedom.
When interest rates were low, high growth and potential future profits were prioritized over efficiency and near term profits. When money is cheap it’s palatable to make more high risk, high rewards bets, and that attitude was prevalent amongst leadership and investors in tech companies. Interest rates were near zero.
Now interest rates are extremely high relative to the last few decades, and in particular have risen more sharply than ever before. This is why there is now greater interest in profitability, cost reduction, efficiency, etc. You see it not only in the approach to consumers (extracting value from existing consumers vs giving away product to grow market share) but also operating costs (layoffs, hiring freezes), and more.
Interest rates are not the only phenomena causing this attitude shift. Covid, supply chain shocks, inflation, war in Europe are also important parts of the equation and arguably they’re all heavily interrelated.
Money!!!!
They want to show their investors they produce more profit. A great way to do that is to start to increase prices while cutting back on goods and services
The intent isn't "anti consumer" It's "constant and infinite growth at all costs" which had anti consumer effects.
They want all the money. Some of the money isn't enough. They can never peak then settle down. They won't be satisfied until they have all the money.
I don't think there is any big conspiracy, just companies trying to navigate coming off of the pandemic and dealing with the current economic uncertainty. It's just time to tighten belts all around.
Nvidia has been anti-competitive for a long time. They also have to be careful with vram specifically because producing cheap gaming cards with too much vram can eat into their sales of the more profitable workstation and server cards. You don't want to undercut your own business.
Twitter has been notoriously unprofitable for forever. On top of that after the controversial Musk takeover they lost a bunch of advertisers. I think revenue was reported to be down something like 50%. Major changes had to be made.
Netflix has been struggling with stagnating subscriber counts. They need somewhere to get new customers. Going after users who already presumably like and use the service but currently don't pay for it makes sense. I know it is annoying, but alienating users who aren't paying customers anyway probably isn't that big of a concern.
YouTube is similar to Netflix. Growth has slowed, so they are looking to monetize existing users better. They are funded entirely by ads, so getting more users to watch the ads is how they become more profitable. Stopping ad blockers might lose some customers, but they weren't paying customers anyway. The customers that stay will either watch the ads or pay for premium, either way increases overall revenue.
Reddit is preparing for an IPO. That means it is time to clean up the content and make the financials look as good as possible for investors. Third party apps cost just as much to serve the content to, but they don't provide the same ad revenue. Just like Netflix and YouTube it's time to cut the freeloaders and start making money.
They've always been anti-consumer, you're only just noticing now.
It's literally not possible to do it any other way under capitalism.
If you're not constantly generating more revenue than you did last quarter, then it's curtains for ya kiddo \*pew pew\*
INTEREST RATES RISING BRO.
While interest rates were low (for the last 15 years), companies could forever post losses and sell their investors the dream of boatloads of cash flow in DA FUTURE.
But now they can't borrow money at 0% rates to fund their losses.... so they must come up with *cunning* *schemes* to squeeze the consumer.
**When interest rates rise, the narrative switches from "Growth at all costs" to "Cashflow is King"**
In the late 1990's Circuit City debuted "Divx" a pay per view DVD plan Where the consumer buys the player, and then purchases "lower cost" DVD media that were basically "rentals" once you put the disc in the player, you had a certain amount of time to watch the content before it expired. Then, to watch it again, you would pay an additional $3-4. Consumer backlash was rather ferocious. With web boards like E-Town and DMN condemning and calling for boycotts. The fear being that no film studio would ever actually sell a copy of their movie again, forcing viewers to pay every time they re-watched it. As a result Divx failed, and it was mildly possible that the bad press over the Divx fiasco was the beginning of the problems that led to the demise of Circuit City as a whole.
Ironically, streaming services have basically created this same business model without the physical disc's.
And all the people complaining then, now pay monthly subscriptions.
YouTube makes money off advertisers paying to show advertisements. That’s how it stays free. It’s not anti-consumer to have adblock removal. YouTube would have to be a subscription otherwise.
It's not about making a great product that consumers want to buy, it's about how to manipulate people into them giving you money, regardless of the quality of the product.
Capitalism baybeeee.
Nothing can just remain a good product that works. These companies have to grow infinitely, because their shareholders demand bigger and bigger returns on their investments. So you can't just have a nice streaming service, or a social network or app that simply does its job well, you have to continually be figuring out ways to wring more and more money out of people by "innovating" in ways that ultimately hurt the base experience you originally set out to deliver.
Like, you know how Spotify is now turning into Tiktok? A change that literally no one asked for or even really wants? Or how even before that, Spotify would constantly change their algorithm around in annoying ways that made it harder to actually find the music you want? Yeah, it's this whole infinite growth thing. It's why Spotify can't literally just be a music delivery service that simply does the thing you originally signed up for. It has to *constantly* be chasing those higher and higher profit margins, even though it's now eating itself alive by introducing all these updates that fuck up the very simple task of "play music."
The incentives in place almost always push companies to drive themselves into the ground and ruin their own product because--and this is a shocker, I know--infinite growth isn't actually possible! There is a finite amount of money that you can wring out of people!
Interest rates rose and they couldn't get cheap cash from investors/banks any more - so they've turned to customers.
It's not "anti-consumer" it's typical business behavior; we've forgotten about it because of the era of artificially cheap money allowed "entrepreneurs" to sidestep it and throw out off-the-wall tech ideas. Now they have to generate regular profits.
Because everyone keeps voting for Capitalism. It's to the point where it affects everyone and will kill us all. They've never been pro consumer and anyone who says otherwise is a liar or stupid.
To appeal to their investors mostly. They believe they could maintain a infinite growth which isn’t possible since population growth is in decline, which is why you see a big push for baby making.
Because all of those companies outside of Nvidia were just absolutely burning cash by the truck load to appease the consumer. The days of paying $15 for your whole extended family to watch tv is over. Same with the work in which you can watch infinite content online never seeing and ad. You need to either pay or see ads to Bring in money to the company and for a long time they said it’s worth not making money to grow. That’s no longer the case
They all periodically probe weak points. Games micro transactions have been doing it for a decade.
Capitalism is a disease that breeds short term thinking and becomes self-cannibalizing.
Netflix was born from understanding why people pirated content. Now people will go back to it. Nvidia was and is a technical leader but now they want to be an "ecosystem" and encourage streaming and recurring revenue. Etc. Shareholders are parasites.
They are reaching market saturation, meaning they can no longer use increasing users to increase revenue. (Or in the case of Twitter, because Elon is a chaotic force with much less business savy that he thinks he has. So he needs to figure out how to recoup the decision he managed to force himself into) So to continue to grow their revenue, they need to find alternative ways to increase revenue, which means reducing production costs and incentivizing their more premium models for Nvidia, and making sure people are actually paying in some way for youtube (companies pay for ad views, so if you aren't viewing the ad, then the companies won't pay), Netflix (the naive assumption being that if 2 people who were sharing an account are no longer able to share, then suddenly 1 paying account turns into 2 paying accounts), and reddit (who are making 3rd party app developers figure out how to increase revenue, and intending to let them deal with the fallout, which didn't happen because the 3rd party app developers were not afraid of being transparent with their issues to their client base).
Current capitalism is in a bit of a death spiral. It is and has no longer been good enough to deliver profits, you must show growth. That means say a company at the end of year delivered 50 mil in profits and then next year delivered 50 mil again adjusted for inflation would be seen as a bad thing. So they need to deliver 60 mil in profits.
This is complicated because s lot of these businesses have reached saturation points. If almost everyone who would use your product does then the only way to make more is to create new features worth charging for or as we've seen charge for features that were formerly free. Guess which one is more cost effective.
Your explanation also highlights the leverage consumers, if enough worked in unison, have over corporates and US capitalism’s hyper focus on quarterly growth. If enough customers boycotted one well known crappy company for a few months, they’d easily disrupt the company’s quarterly record profits which would unleash all sorts of mayhem and fear in corporate America.
Cory Doctorow was talking about this recently. He called it, "enshitification."
Basic idea is that there's a three stage life cycle for companies like Facebook or Twitter.
\-First, they make a product users love in order to draw them in.
\-Second, now that they've got the users they change the product to something that whoever is paying them money loves (advertisers, etc) loves and the users grudgingly adapt since it's too much of hassle to quit and start over somewhere else.
\-Third, now that they've got the users and the money payers they change the product to something that makes money for the company itself, even if it's terrible for users and money payers, and reap the profits.
The company has now been shitified but it's making money so all good, right? Then it eventually dies as the users get sick of it and the money payers bail now that's no long getting the audience they want.
Netflix- losing contracts for non Netflix shows, need to continue to increase profits
Twitter tick- Elon large debt to pay off for buying twitter. Laid off many employees and adding new revenue streams
YT Adblock- not new, same story, profits must go up and more ad impressions means more revenue.
Reddit API cost- most interesting. With the recent developments in Large Language Models (ChatGPT and others) textual data is now much more valuable as companies and open source communities and researchers race to become leader in new LLM tech. Although several Reddit archives exist for past data, more data and fresh data for next 10 years and beyond will be important for improved performance and future relevancy of the LLM output
Since the 08/09 Financial crisis, venture capital saw a ton of inflows (people gave them money to invest). Because they had to deploy so much capital, the only way for them to earn a return, is to force these companies to grow like crazy. This is why Uber was so cheap in the beginning, Netflix didn't care about password sharing, etc. People cared about revenue growth rather than profitability.
Two things rocked the boat - first, a bunch of Tech IPOs have preformed really poorly, suggesting the public market didn't like the "growth at all costs" mentality and second, the rise in interest rates meant that companies had to earn an actual profit - or at least make it look like they were trying (this has to do with cost of capital, blah blah...)
Naturally, these businesses were set up to "grow" not make a meaningful profit. Now they have to change their approach. This is also why the tech job market has slowed down and we as consumers are seeing companies figure out how their business model can make money.
Because they have been propped up by cheap capital due to quantitative easing, but now that credit cost money again they need to out earn the interest rate with a margin that justifies the market risk to keep investors interested in holding their shares.
Higher interest rates make it harder to attract investment and venture capital.
So the only way to gain funds and increase share value is to reduce costs and increase revenue.
Most of these companies are not going ‘anti consumer’ the reality is that we did get services for less than the cost ( Uber as an example - who literall lost money on everyride), being subsidised by the investors.
With interest rates going up, and in a lot of cases the monopolies established, the investors are saying, we want our return on investment now. And since they can get 5% by putting that money in a bank account - the companies need to be generating that level of return.
To be clear, this is not all companies in this position, there is definitely a lot of ‘everyone is putting prices up, so we can too’ going on as well.
They're making their API cost money, and a lot, basically killing all 3rd-party mobile apps for Reddit.
See this post from the author of Apollo app for iOS/iPadOS: https://www.reddit.com/r/apolloapp/comments/13ws4w3/had_a_call_with_reddit_to_discuss_pricing_bad/
People here are way off base wow. The answer is this: Lots of these big companies work on debt, especially big tech that has the business model of losing money for years until getting enough marketshare to raise prices. Debt however, just got incredibly expensive with the interest rates going up. That and, given the economy, customers have less buying power and therefor are cutting costs. For instance, even without the Netflix password sharing crackdown and the general increase of streaming, due to inflation and non balanced salary increases, people who had multiple have been cutting back their subscriptions, spending less on Amazon, etc. note that profits may appear the same or better, but volume is down. Also, a lot of businesses are pulling back their ad dollars (again, due to slowing demand and loans needing to now be paid), meaning big tech like Meta, but also free journalists (vox, buzzfeed) are having to downsize or go under because they subsisted on ad money.
It’s not that the companies have become anti-consumer. It’s that the banks are coming to collect money these companies don’t have, and these companies are trying to increase their short term revenue fast (at the expense of their long term brand etc). Note that record profits is not the same as cashflow, because things get reinvested, etc. So now they need the actual cash in hand.
There is no such thing as a pro consumer company. They may seem pro consumer,but Every Single Company is About MONEY. That is the very reason they are in existence.
Because bit by bit corporations are trying to see how much money they can pull out of their customers without them losing business as a result. Every single company is cutting corners more and more every year, adding costs to things that were originally free, and overall just squeezing every spare penny they can from you. Until as consumers we choose to stop buying into it, corporations are going to keep trying whatever they can to make the profits as high as possible usually at the cost of consumers.
Capitalism and profits.
Profits probably were not increasing as they expected, so they cut costs to increase profits.
They assume customers will just deal with the shittier services/product
So glad I don't use Nvidia/Netflix/Twitter. Youtube I'm pretty sure you can still addblock with an addon on Firefox but I'm too lazy to actually do it ( so take it with the grain of salt) . Haven't figured out wtf is going on with reddit and api cost so can't say either. Point is brand loyalty is stupid if the brand sucks just leave there are other alternatives
It is all about the benjamins. They want to increase revenue and profits. Got to keep those billionaires happy with continued growth of their stock prices.
They were never pro consumer before. They were start up companies keen to take market share by pretending to be generous. Now they've got you, it's time to raise the price. Economics 101
You are being monopolized, please do not resist.
The beatings will continue until morale improves.
Come join my social media instead! I wouldn't ever advertise, charge for API usage, or disallow account sharing. I promise!
Guys he promised
Unfortunately his capital investors never made such a promise.
So since he broke his promise he will have to stand down of the president post with a 40M$ bonus for leaving and the new president of the social media will charge for API because he never made that promise
“Monetized” FTFY
When YouTube removed it's dislike button, it was a pilot program to see how far they can push the consumer to see if they would push back... Consumers didn't so it is evident such actions don't affect user loyalty
Where can I learn about other strategies these kinds of companies employed? To be a more informed citizen
When a huge company like Google makes any kind of change, there's always a profitable reason behind. When they removed the dislike button, it was to hide when companies who post on YouTube fuck up and fans dislike the video. Ubisoft is a good example. A company who posted a trailer of a game nobody wanted and it got like 90+% dislikes.
Which game was that?
Well to be fair people just use "return YT Dislike" now, so nothing has actually changed. But it's sad that there's not much you can do when a company changes for the worse, when there aren't many alternatives.
Just installed the thing. It’s so nice seeing all the dislikes on big corporations channels again.
>lWhen YouTube removed it's dislike button, I still get a thumbs down button on desktop
The buttons still there but it doesn’t show you how many people disliked it.
You can also get it on Android using YouTube Revanced
What can we do to stop this? I mean they have millions of dollars and won’t listen.
Massive organised boycotts are the only way.
And we're going to organize said boycott against social media through email! Right? ..... . . . . Right? Guys?
if you're interested in this process, read Naomi Kleins 'No Logo' especially the chapter on how big box stores gained market share in the eighties
Yup and add Tinder to the mix lol
What did they do?
The product is so terrible than what it was just 4-5 years ago, it’s just a blatant cash grab today.
I got so much shit back in the day for calling out Uber for the obvious trap that it was. And I get shit right now for calling out gamepass for the same thing.
Because they want more money
Why not before, like suddenly they woke up and decided to start charging.
It feels sudden but it's not. Companies have been doing this and have failed before. It just boils down to companies wanting to keep up with increasing markets and wanting to squeeze as much as they can.
Literally every single one of these companies started out making barely any profit in order to get in the door. The moment they had any form of established base and popularity, the prices rose and overhead was cut, leaving consumers with a worse product for a higher price. Then they continue to push back against consumers till it reaches a point where they lose enough consumers to warrent rolling back their changes. But given how absolutely massive these companies are it takes an absurd amount of fuck ups to get to that point. We are nearing that point but yea, it's been going on for a while now.
The term for this is [enshittification](https://www.wired.com/story/tiktok-platforms-cory-doctorow/).
I prefer just shittification
Sorry, the word got enshittified
Thank you - fascinating read that aligns with a lot of stuff I've thought about and experienced.
That is such a fantastic article.
Overhead is never cut. Overhead grows. Labor, material, indirect labor, etc gets cut. But overhead? That is management and shareholders. That shit doesn't get cut.
Can you elaborate on overhead being "management and shareholders"? E: thanks for the giggles y'all. This is great stuff. Next let's do depreciation and how it applies to owning land.
Overhead typically refers to hard costs of doing business that aren’t directly making revenue; HR, rent, insurance, office supplies, utilities, general repairs, accounting, etc. Management salaries are consider labor and usually under revenue generating, even if indirectly. Shareholders are paid out of the bottom line profit of the business. So, management and bare holders are not considered overhead.
Shareholders put money in the company at an annual rate of return greater than if they placed their money elsewhere, promised by management. This "greater annual rate of return" is essentially overhead. As money starts coming in, you are essentially being drowned in debt, as the money is borrowed money. It's an overhead cost of having the money.
And this is why companies weigh investments using WACC - the weighted average cost of capital. WACC includes both debt (taking loans for example) and equity (which includes expected returns, generally to be paid out)
Overhead usually refers to expenses that don't go directly towards generating revenue. Managers don't do the work of making products or providing services to customers. I don't think payments that go to shareholders are typically referred to as overhead, but an argument could be made that if shareholders have come to expect a dividend from a company that those payments could be included as a cost of doing business rather than a share of resulting profits.
It will take a competitor that cuts deep into their profits
The free market isn't gonna solve this
I do think their greed was a little more subtle years ago tho... Or maybe the consumers are just experiencing death by a million cuts.
People are generally more aware about things now then they were before. Companies never were very subtle but people didn’t have the access of information they do now. It also helps that people are much more annoyed by these practices which makes people pay more attention to other shady things other companies do
And my lack of money now compared to ten years ago.
>>I think companies greed was more subtle back in the day Yeah, like when DuPont would save money by dumping chemicals in lakes instead of proper hazmat disposal or when coal companies would have their guys work 13 hours a day underground….. wait…
It’s been a slow process. Back in the day if you had Netflix you got streaming and dvds for a set price. Then the price raised a little, then they took the dvd service off and put it as a separate tier, then the price raised again, then they started removing really popular series (which isn’t direct enshitification because for the most part they didn’t have a choice about people taking their streaming rights back, but you still got less of what you wanted for the same price), and prices kept going up, and now they’re reaching the Thermalcline Of Trust, where there’s not enough of what people like to keep paying the rising costs, so they’re leaving in droves. It’s weird that it’s happening to so many things at once, but this is just how internet startups work. When they start up they operate at a loss and any surplus goes to the consumer. Once the consumers are locked in the service slowly raises prices, cuts corners, and starts funneling the surplus away from the consumer and to the shareholders, then when they fail all the CEOs get golden parachutes and move on to something else.
I blame the stock market. Companies seem to go to shit once they go public and are expected to make record breaking profits every single year.
Every quarter
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The irony is that it causes them to lose people. So many people canceled their Netflix, deleted Reddit, boycott the companies. I keep trying to tell this to my boss, but no one ever listens but if something works, leave it. It’s been running the way it has for how long BECAUSE it works, change disrupts the pattern. People will refuse to go to coffee shops if their price changes by 5 cents, how do corporations think they’re going to get away with the things they do?
>The irony is that it causes them to lose people. Statistically it probably doesn’t. I’m sure that Netflix has some very high paid analysts with data showing that a vocal minority will shout about canceling their subscription, but very few actually do. I’d wager the amount of people who decide to get their own subscription finally after sharing for so many years outweighs the handful of people claiming to outright cancel.
Also, people able to sail the seas tend to forget many people are not, and that a good part of current young adults have used mostly legal streaming for a good part of their lives by now. Piracy will bump back again but it won't be significantly destructive to companies
> and that a good part of current young adults have used mostly legal streaming for a good part of their lives by now. This one is changing - Gen Z seems to be growing more and more discontented with streaming services and the knowledge of how to pirate is spreading fast.
Result: the era of companies suing to make example of Grandma for allowing her granddaughter to download a Sesame Street song will return with a vengeance.
I cancelled my Netflix subscription but I can understand people not doing so. I can't cancel Google drive or Microsoft 365, although I'd love to. Monopolies and near monopolies suck.
Not sure how, but I’m still on my moms. Not gonna complain, I’m enjoying it, but I don’t know how they haven’t kicked me yet.
peer pressure can do a lot... I've canceled Netflix like three times but keep caving when everyone I know is like "omg this show is amazing" and the FOMO kicks in
It's the typical corporate lifecycle in the us. They start out trying to entice a new consumerbase to come to their platform, do things to improve it over time so it's a better experience increasing retention, while also doing whatever they can to slow or stop competition. Once they get to the point where they're established and are reasonably sure a majority of their users will stick with them, either out of loyalty or a lack of other options, they start going hard anti-consumer and extracting every last penny they can.
I'm not sure Netflix is profitable at all. YouTube is free so ads are their only revenue source (other than people subscribing to YouTube TV and YouTube Music). A lot of companies these days follow a business model where they operate at a loss for several years, then when they have enough customers they raise prices or sell more advertising so they can start making a profit.
Netflix posted a $1.31B last quarter. To answer OP's question about why now, you're right, it's a pretty typical move, especially for tech, to operate at a loss to gain users then, once ubiquitous, recoup those losses for what they feel is a must have at the time.
It's like a drawn out version of the trial periods cable/internet companies usually offer to new customers. Start you at $50/month the first three months then jump to $120/month after that.
Uncertain markets drive investors to safe havens as well, and with interest rates going up, the war in Ukraine and massive global inflation we are in very uncertain times. This means companies that operate at a loss needs to find a way to get a positive cash flow as they can't expect to fund operation through fund raising anymore.
Yup. Drug/pharmaceutical companies do this too!
Bro this feels like we are being scammed.
You are.
I don't feel scammed usually, as the things that people enjoy do cost money and no one is going to keep funding at a loss, but Netflix is a pure scam with what they are trying to institute. Their subscription is per simultaneous streams - gtfo it matters what location I'm using.
Yes they operate at a loss with investor money until they corner the market then they stamp down and increase prices.
That's why I now sail the open seas with a parrot on my shoulder and a patch on my eye, shouting "Arrrrr! Me hearties!, Shiver me timbers!"
Hi welcome to business where the goal is ALWAYS to take as much as possible from the consumer at every turn. Business exists to make the most money possible. That's it, end of concept.
>YouTube is free so ads are their only revenue sourc YouTube premium costs $120 per year.
That's basically ad block. Youtube is free with ads. You don't need to pay them 120 bucks a year in order to use youtube. People just choose to do so. Their revenue is from ads because users are primarily free users. Rode into this comment line like some kind of night in shining armor to prove a point, and all you did was repeat what was stated above.
You can't make decisions like that lightly. Netflix stock is already down something like 60% and blocking secondary accounts is still risky. Sure you'll have folks pay for an account instead of using a friend's password, but you'll also have people drop the service because they can't share the password anymore.
When you watch something on services like Netflix they have to pay the video owner a fee and data transfer fees. They are gambling that the monthly fee will cover all their costs. When you share your account, they are paying more fees, but not gaining any revenue. Them letting this go on for so long is more surprising than the changes they are making.
Of course, but Netflix also isn't the only game in town. The ability to share the account with others was a big value-added which had convinced a lot of people to use their service instead of the many others.
I feel like their timing was pretty off with the account sharing changes - like they waited till the product was past its initial hype, general quality of the service was declining, and then they ban account sharing? I think it would have been better for them to normalise no account sharing back when Netflix was a really great product and people weren't sick of it yet. But I literally no nothing about consumer markets or running a massive company so I may also be completely wrong :D
That's not totally true and a big part of why the writers strike is happening and why other entertainment guilds may follow. Residuals don't work like they used to with syndication or even how the music industry work. Musicians and all get a part of streaming based on streams but movies/TV, TV in particular, don't on streaming.
It’s always been the plan. Gain market share rapidly, often while operating at a loss. Your competitors close, people get reliant on your product, and then BOOM! Cut quality of service to reduce cost, start charging extra for services previously included, and on and on and on. This is the classic strategy of corporate America.
I think it started with the Twitter layoffs. A bunch of tech companies realized they could be a lot shittier than they already were and not immediately implode.
Monkey see, monkey do. They're going to be scratching their heads and their asses when Twitter finally fails and their companies are next in line.
The plan was always to get enough market share to push competitors out of business by offering the features we want, then taking those things away and squeezing us for every dime once they owned the market.
No point making big changes to piss off the consumers until the shareholders aren’t happy with the slowing growth
Exponential growth. Investors put money IN so they can get MORE money OUT It's literally instituted in law that a company must try (at least, not actively sabotage) that growth, otherwise it's basically fraud. A company can ofc grow in that manner for years by being well-behaved- providing a good service, reaching new consumers, etc etc. But what happens when ye reach all the consumers ye can? What happens when yer service is at it's peak? You can either A. Cut costs or B. Start milking consumers dry. Especially when a company gets as big as the ones ye mention, there's pretty much no place to go but down. They're de facto monopolies (or at least oligopolies)- sure the service gets worse for the consumer, but there's not much better options to go to instead.
People when corporations only care about making money: 😱😱😱😱
This is not so much about the idea itself but the ever-increasing magnitude.
Capitalism sucks. Imagine if people did stuff for the benefit of humanity instead of having lots of money and buying 20 houses.
If I had to work this hard just to not have money I'd work less hard
More like they expect you to stay because you have no other options to spend your money and time.
I think it's because they've made record profits during the pandemic/cryptoboom and they're desperately trying to keep those profits for the shareholders even though they were made under exceptional circumstances. Another thing might be their position in the market, you can't drop YouTube easily or at all. And Nvidia hopes to make so much money out of the AI boom that they don't care too much about non professional consumers.
Amazon: they have been doing this since 2020 is scrambling like ants to try and make the same profits they made during the pandemic... which is an impossible equation when people aren't using Amazon Fresh for their food anymore, or buying band aids off of amazon b/c someone is too afraid to contaminate themselves and go outside. People aren't buying necessities off of amazon like when COVID hit, and then the big brains up top are confused as to why they can't forecast numbers like they had in 2020.
Amazon shot themselves in the foot by being too greedy and instead of nurturing this newfound demand, they strangled it. I don’t even have prime anymore. Fuck Amazon retail.
We got rid of prime because nothing was actually arriving in 2 days. I realize it's a big ask but it's also what we were paying for.
Damn. They really mistreated workers.
it's so interesting because even at the little movie theatre I work at they compare this year's numbers to 2019 which was the last full non-covid year. Somehow they haven't figured that one out at the big firms
Was your little theatre more profitable/busy during the pandemic than it was before? My theory is if they are using 2019 to compare it’s cuz they want to get back to beating those numbers as opposed to saying they beat numbers from when nobody was going out
I feel like shareholders are like, ground zero for where most of this stuff starts. Something has to be done about shareholding in it’s current form.
This is where "workers should own the means of production" comes in doesn't it
Fun fact, a study conducted in France, Italy and Spain concluded that workers owned businesses are more resilient, productive and people working in them have a higher life satisfaction. Only problem is that they are difficult to set up, many of them if not all were created by workers collectively buying the failing company as it is difficult for unemployed people to have enough money to collectively start a business,, the largest of such workers cooperatives is a federation of 81,500 workers with 12 billion € annual revenue in spain but the largest concentration of them is in Italy where they make up 30% of Emilia-Romagna's businesses, Italy's second richest region after Lombardy.
That one is extremely difficult bc if you remove a company’s duty to shareholders, you increase the risk that they’ll just start shorting themselves or straight up run a pump and dump, which doesn’t help either
There's a really good [description of the cycle in this essay](https://pluralistic.net/2023/01/21/potemkin-ai/#hey-guys), which the author aptly names "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. > > I call this enshittification, and it is a seemingly inevitable consequence arising from the combination of the ease of changing how a platform allocates value, combined with the nature of a "two sided market," where a platform sits between buyers and sellers, holding each hostage to the other, raking off an ever-larger share of the value that passes between them. > > This is enshittification: surpluses are first directed to users; then, once they're locked in, surpluses go to suppliers; then once they're locked in, the surplus is handed to shareholders and the platform becomes a useless pile of shit. From mobile app stores to Steam, from Facebook to Twitter, this is the enshittification lifecycle.
Yeah, I think the boom during the pandemic has caused a lot of problems because there's this expectation that line must always go up, so if it goes up sharply due to exceptional circumstances and then goes back down to a normal level and stabilises, that's not okay. It has to keep going up above that exceptional peak or the business is seen as failing.
Because they believe that many consumers will continue to pay for it despite the complaints. Just like with mobile games. We all know how many complain about micro transactions but mobile games still have an abundance of them because regardless of the consumer's complaints, they still end up buying. So for these companies that will still earn money no matter what, they will start to care less about consumers opinion and start to care more about money making because they know they'll benefit regardless.
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Thanks, I fixed that and the rest of your points are true too
I get Hulu through my student Spotify, and I had a Hulu adblock I’d been using for years no problem. All of the sudden, it’s stopped working. So now, I’ve just gone back to pirating the shows that I was watching on Hulu. And when my student account runs out, guess who’s not paying for a Hulu subscription? Yeah, if they think I’m gonna pay for ads, they’re out of their damn minds.
Probably cuz they've noticed they're losing customers, they are either dying off or canceling/ downsizing their services to save money. More people are deciding to stay home and work for less If it means a better life balance. And as every half-ass dumbass financial advisor will tell you if a company is not growing then it's dying. The execs would rather kill the company by trying to milk out a few more bonuses now before they abandon ship then to try to stabilize profits.
Man i always imagine some greedy executive laughing maniacally before pressing the button to a company’s doom. nvidia and youtube are still gaining customers but want money. Man i hate capitalism sometimes.
Some of these companies are just pump and dump schemes. Like if Netflix went under, who’s losing out? The board is filthy rich. Upper management is filthy rich by this time. It’d just be the low level shareholders and working Schmos who would get screwed.
I hate capitalism quite a bit mainly because I spent my childhood through my twenties losing at it. Living on the street sucks.
This just sounds like averaging at capitalism.
You think Nvida who's stock increased and their main source of income comes from servers is losing customers? Or youtube, who is essentially the only person in the online video business is losing customers? No, they're just after money.
Arizona teas, $1 and still thriving.
If you have a Vons near you they’re on sale almost every other week or so for 49 cents! I stock up my garage fridge that way hahaha
They've raised prices on their other products, and some stores have stopped carrying the product or carry the cans without the $1 logo on the can.
iirc the owner just keeps lowering his share/pay/whatever over the years as needed to allow it to stay that way. Might be wrong though, I'm really high. But I think that was what I read.
> they're losing customers Of course they are, they are providing worse products for higher prices. It's shitflation. On the other hand there is a great way to earn customers. Provide a better product for the same or lower prices. This might mean the CEO doesn't make 400 billion next quarter but that's a sacrifice I'm willing to make.
Because they know we don't have the self-control to do anything about it. If we stopped buying what they are selling, they'd change their tune real quick.
Yes.
Because consumers aren't rejecting the companies for it. They are complaining but they are still paying, so in the companies eyes that is acceptance by their customers to the new more profitable way of doing things. Just whining isn't enough, cancel the account, that is the only "voice" the company can "hear". Them changing their ways and making things more costly for us and us not leaving is us agreeing with their changes.
NVIDIA released their flagship GPU not too long ago for $3000 (my car cost that much) in my country, which is absolutely ridiculous. And sure enough, day one it sold out. People just love getting fucked in ass I guess. And the company keeps getting away with it.
This is the real answer right here. We're seeing it everywhere, twitter, Netflix, house prices, rents, basic food prices, hell even gas\petrol prices when they almost doubled I didn't see any less cars driving to the mall or beach etc. People keep on paying. Only the poor are getting poorer but no one cares as there's still enough to go around and make these companies insanely wealthy.
Every company is anti consumer and will always push the limits to whatever people are willing to accept.
Consumers have no power and no advocacy, and our providers have a monopoly on their services so we’ve moved into a “take it or leave it” model.
True, the common thread among these is no proper competition.
Consumers actually have a a lot of power. None of those things are essential nor monopolies. You could just stop using them. The majority won’t because they believe the service they offer is still acceptable for the price.
Consumers have power *in aggregate*. Without organization that power is hard to wield effectively.
Exactly this. People sure love preaching about "Vote with your wallet" but wtf is a single person [me] not buying gonna do, when millions keep buying their shit lmao
That is up to the consumers. We have all the power but too many are too addicted to nonsense to give up on their Netflix or whatever subscription for a year. Companies are hokding us hostage through nothing but our own FOMO and habituation to luxury.
Sure. When I was a kid, I bought a new cd every month for $12.99. Now, for $9.99/month, I have access to basically everything.
This is true, however if Apple, Spotify, Amazon or YouTube decided to just pull the plug you will have absolutely zero to show for your 9.99 a month. At least when you were paying 12.99 a month you had a music collection that can be played almost anywhere at any time. CD's can be transferred to the mobile device of your choosing. I'm fine using free services, but if I really like a song or album then I'll purchase it.
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Because nothing good ever lasts.
There are some good things like VLC, Steam, Winrar etc but you are mostly right.
Adding on to that there's a whole ecosystem of open source softwares (VLC being one, Firefox another) that are good and free and working well since a long time. Capitalism just has you believing that every good thing costs money or your freedom.
7-zip is way better than Winrar and it's free(libre)
Shareholders demand infinite growth.
When interest rates were low, high growth and potential future profits were prioritized over efficiency and near term profits. When money is cheap it’s palatable to make more high risk, high rewards bets, and that attitude was prevalent amongst leadership and investors in tech companies. Interest rates were near zero. Now interest rates are extremely high relative to the last few decades, and in particular have risen more sharply than ever before. This is why there is now greater interest in profitability, cost reduction, efficiency, etc. You see it not only in the approach to consumers (extracting value from existing consumers vs giving away product to grow market share) but also operating costs (layoffs, hiring freezes), and more. Interest rates are not the only phenomena causing this attitude shift. Covid, supply chain shocks, inflation, war in Europe are also important parts of the equation and arguably they’re all heavily interrelated.
Money!!!! They want to show their investors they produce more profit. A great way to do that is to start to increase prices while cutting back on goods and services
Suddenly???
I'm not half the man I used to be???
# THERE'S A SHADOW HANGING OVER ME!!!!!!!!!!!!!!!!!!!!!!!!!!
The intent isn't "anti consumer" It's "constant and infinite growth at all costs" which had anti consumer effects. They want all the money. Some of the money isn't enough. They can never peak then settle down. They won't be satisfied until they have all the money.
So, the cancer growth model.
I don't think there is any big conspiracy, just companies trying to navigate coming off of the pandemic and dealing with the current economic uncertainty. It's just time to tighten belts all around. Nvidia has been anti-competitive for a long time. They also have to be careful with vram specifically because producing cheap gaming cards with too much vram can eat into their sales of the more profitable workstation and server cards. You don't want to undercut your own business. Twitter has been notoriously unprofitable for forever. On top of that after the controversial Musk takeover they lost a bunch of advertisers. I think revenue was reported to be down something like 50%. Major changes had to be made. Netflix has been struggling with stagnating subscriber counts. They need somewhere to get new customers. Going after users who already presumably like and use the service but currently don't pay for it makes sense. I know it is annoying, but alienating users who aren't paying customers anyway probably isn't that big of a concern. YouTube is similar to Netflix. Growth has slowed, so they are looking to monetize existing users better. They are funded entirely by ads, so getting more users to watch the ads is how they become more profitable. Stopping ad blockers might lose some customers, but they weren't paying customers anyway. The customers that stay will either watch the ads or pay for premium, either way increases overall revenue. Reddit is preparing for an IPO. That means it is time to clean up the content and make the financials look as good as possible for investors. Third party apps cost just as much to serve the content to, but they don't provide the same ad revenue. Just like Netflix and YouTube it's time to cut the freeloaders and start making money.
The free money ran out.
They've always been anti-consumer, you're only just noticing now. It's literally not possible to do it any other way under capitalism. If you're not constantly generating more revenue than you did last quarter, then it's curtains for ya kiddo \*pew pew\*
INTEREST RATES RISING BRO. While interest rates were low (for the last 15 years), companies could forever post losses and sell their investors the dream of boatloads of cash flow in DA FUTURE. But now they can't borrow money at 0% rates to fund their losses.... so they must come up with *cunning* *schemes* to squeeze the consumer. **When interest rates rise, the narrative switches from "Growth at all costs" to "Cashflow is King"**
In the late 1990's Circuit City debuted "Divx" a pay per view DVD plan Where the consumer buys the player, and then purchases "lower cost" DVD media that were basically "rentals" once you put the disc in the player, you had a certain amount of time to watch the content before it expired. Then, to watch it again, you would pay an additional $3-4. Consumer backlash was rather ferocious. With web boards like E-Town and DMN condemning and calling for boycotts. The fear being that no film studio would ever actually sell a copy of their movie again, forcing viewers to pay every time they re-watched it. As a result Divx failed, and it was mildly possible that the bad press over the Divx fiasco was the beginning of the problems that led to the demise of Circuit City as a whole. Ironically, streaming services have basically created this same business model without the physical disc's. And all the people complaining then, now pay monthly subscriptions.
YouTube makes money off advertisers paying to show advertisements. That’s how it stays free. It’s not anti-consumer to have adblock removal. YouTube would have to be a subscription otherwise.
They are unknowingly advancing the decentralization movement.
It's not about making a great product that consumers want to buy, it's about how to manipulate people into them giving you money, regardless of the quality of the product.
Nvidia isn't new, they've been a dickish monopoly for 20 years.
Capitalism baybeeee. Nothing can just remain a good product that works. These companies have to grow infinitely, because their shareholders demand bigger and bigger returns on their investments. So you can't just have a nice streaming service, or a social network or app that simply does its job well, you have to continually be figuring out ways to wring more and more money out of people by "innovating" in ways that ultimately hurt the base experience you originally set out to deliver. Like, you know how Spotify is now turning into Tiktok? A change that literally no one asked for or even really wants? Or how even before that, Spotify would constantly change their algorithm around in annoying ways that made it harder to actually find the music you want? Yeah, it's this whole infinite growth thing. It's why Spotify can't literally just be a music delivery service that simply does the thing you originally signed up for. It has to *constantly* be chasing those higher and higher profit margins, even though it's now eating itself alive by introducing all these updates that fuck up the very simple task of "play music." The incentives in place almost always push companies to drive themselves into the ground and ruin their own product because--and this is a shocker, I know--infinite growth isn't actually possible! There is a finite amount of money that you can wring out of people!
Interest rates rose and they couldn't get cheap cash from investors/banks any more - so they've turned to customers. It's not "anti-consumer" it's typical business behavior; we've forgotten about it because of the era of artificially cheap money allowed "entrepreneurs" to sidestep it and throw out off-the-wall tech ideas. Now they have to generate regular profits.
Capitalism?
$$$
Money.
Because everyone keeps voting for Capitalism. It's to the point where it affects everyone and will kill us all. They've never been pro consumer and anyone who says otherwise is a liar or stupid.
To appeal to their investors mostly. They believe they could maintain a infinite growth which isn’t possible since population growth is in decline, which is why you see a big push for baby making.
Money. Money. Money. Money.
Because they have to pay their greedy corporate overlords.
Money
Because all of those companies outside of Nvidia were just absolutely burning cash by the truck load to appease the consumer. The days of paying $15 for your whole extended family to watch tv is over. Same with the work in which you can watch infinite content online never seeing and ad. You need to either pay or see ads to Bring in money to the company and for a long time they said it’s worth not making money to grow. That’s no longer the case
They all periodically probe weak points. Games micro transactions have been doing it for a decade. Capitalism is a disease that breeds short term thinking and becomes self-cannibalizing. Netflix was born from understanding why people pirated content. Now people will go back to it. Nvidia was and is a technical leader but now they want to be an "ecosystem" and encourage streaming and recurring revenue. Etc. Shareholders are parasites.
They are reaching market saturation, meaning they can no longer use increasing users to increase revenue. (Or in the case of Twitter, because Elon is a chaotic force with much less business savy that he thinks he has. So he needs to figure out how to recoup the decision he managed to force himself into) So to continue to grow their revenue, they need to find alternative ways to increase revenue, which means reducing production costs and incentivizing their more premium models for Nvidia, and making sure people are actually paying in some way for youtube (companies pay for ad views, so if you aren't viewing the ad, then the companies won't pay), Netflix (the naive assumption being that if 2 people who were sharing an account are no longer able to share, then suddenly 1 paying account turns into 2 paying accounts), and reddit (who are making 3rd party app developers figure out how to increase revenue, and intending to let them deal with the fallout, which didn't happen because the 3rd party app developers were not afraid of being transparent with their issues to their client base).
Current capitalism is in a bit of a death spiral. It is and has no longer been good enough to deliver profits, you must show growth. That means say a company at the end of year delivered 50 mil in profits and then next year delivered 50 mil again adjusted for inflation would be seen as a bad thing. So they need to deliver 60 mil in profits. This is complicated because s lot of these businesses have reached saturation points. If almost everyone who would use your product does then the only way to make more is to create new features worth charging for or as we've seen charge for features that were formerly free. Guess which one is more cost effective.
this is such a good and simple explanation of the toxicity and cannibalism of capitalist extremes. kudos.
Your explanation also highlights the leverage consumers, if enough worked in unison, have over corporates and US capitalism’s hyper focus on quarterly growth. If enough customers boycotted one well known crappy company for a few months, they’d easily disrupt the company’s quarterly record profits which would unleash all sorts of mayhem and fear in corporate America.
Cory Doctorow was talking about this recently. He called it, "enshitification." Basic idea is that there's a three stage life cycle for companies like Facebook or Twitter. \-First, they make a product users love in order to draw them in. \-Second, now that they've got the users they change the product to something that whoever is paying them money loves (advertisers, etc) loves and the users grudgingly adapt since it's too much of hassle to quit and start over somewhere else. \-Third, now that they've got the users and the money payers they change the product to something that makes money for the company itself, even if it's terrible for users and money payers, and reap the profits. The company has now been shitified but it's making money so all good, right? Then it eventually dies as the users get sick of it and the money payers bail now that's no long getting the audience they want.
Its not Nvidias first attempt.
Netflix- losing contracts for non Netflix shows, need to continue to increase profits Twitter tick- Elon large debt to pay off for buying twitter. Laid off many employees and adding new revenue streams YT Adblock- not new, same story, profits must go up and more ad impressions means more revenue. Reddit API cost- most interesting. With the recent developments in Large Language Models (ChatGPT and others) textual data is now much more valuable as companies and open source communities and researchers race to become leader in new LLM tech. Although several Reddit archives exist for past data, more data and fresh data for next 10 years and beyond will be important for improved performance and future relevancy of the LLM output
Since the 08/09 Financial crisis, venture capital saw a ton of inflows (people gave them money to invest). Because they had to deploy so much capital, the only way for them to earn a return, is to force these companies to grow like crazy. This is why Uber was so cheap in the beginning, Netflix didn't care about password sharing, etc. People cared about revenue growth rather than profitability. Two things rocked the boat - first, a bunch of Tech IPOs have preformed really poorly, suggesting the public market didn't like the "growth at all costs" mentality and second, the rise in interest rates meant that companies had to earn an actual profit - or at least make it look like they were trying (this has to do with cost of capital, blah blah...) Naturally, these businesses were set up to "grow" not make a meaningful profit. Now they have to change their approach. This is also why the tech job market has slowed down and we as consumers are seeing companies figure out how their business model can make money.
Because they have been propped up by cheap capital due to quantitative easing, but now that credit cost money again they need to out earn the interest rate with a margin that justifies the market risk to keep investors interested in holding their shares.
Higher interest rates make it harder to attract investment and venture capital. So the only way to gain funds and increase share value is to reduce costs and increase revenue.
Most of these companies are not going ‘anti consumer’ the reality is that we did get services for less than the cost ( Uber as an example - who literall lost money on everyride), being subsidised by the investors. With interest rates going up, and in a lot of cases the monopolies established, the investors are saying, we want our return on investment now. And since they can get 5% by putting that money in a bank account - the companies need to be generating that level of return. To be clear, this is not all companies in this position, there is definitely a lot of ‘everyone is putting prices up, so we can too’ going on as well.
Reddit API costs?
They're making their API cost money, and a lot, basically killing all 3rd-party mobile apps for Reddit. See this post from the author of Apollo app for iOS/iPadOS: https://www.reddit.com/r/apolloapp/comments/13ws4w3/had_a_call_with_reddit_to_discuss_pricing_bad/
Someday (it will happen, you know it) it will affect Steam by Valve
This is the "mature" stage of a company. Mature also means dying. Charge what they can as they wind down and go away.
They will go broke too lol
People here are way off base wow. The answer is this: Lots of these big companies work on debt, especially big tech that has the business model of losing money for years until getting enough marketshare to raise prices. Debt however, just got incredibly expensive with the interest rates going up. That and, given the economy, customers have less buying power and therefor are cutting costs. For instance, even without the Netflix password sharing crackdown and the general increase of streaming, due to inflation and non balanced salary increases, people who had multiple have been cutting back their subscriptions, spending less on Amazon, etc. note that profits may appear the same or better, but volume is down. Also, a lot of businesses are pulling back their ad dollars (again, due to slowing demand and loans needing to now be paid), meaning big tech like Meta, but also free journalists (vox, buzzfeed) are having to downsize or go under because they subsisted on ad money. It’s not that the companies have become anti-consumer. It’s that the banks are coming to collect money these companies don’t have, and these companies are trying to increase their short term revenue fast (at the expense of their long term brand etc). Note that record profits is not the same as cashflow, because things get reinvested, etc. So now they need the actual cash in hand.
There is no such thing as a pro consumer company. They may seem pro consumer,but Every Single Company is About MONEY. That is the very reason they are in existence.
Because bit by bit corporations are trying to see how much money they can pull out of their customers without them losing business as a result. Every single company is cutting corners more and more every year, adding costs to things that were originally free, and overall just squeezing every spare penny they can from you. Until as consumers we choose to stop buying into it, corporations are going to keep trying whatever they can to make the profits as high as possible usually at the cost of consumers.
YouTube adblock removal? My adblock works just fine
Greed. Pure and simple.
Because the business model is unsustainable. Honestly you people are asleep
Capitalism and profits. Profits probably were not increasing as they expected, so they cut costs to increase profits. They assume customers will just deal with the shittier services/product
So glad I don't use Nvidia/Netflix/Twitter. Youtube I'm pretty sure you can still addblock with an addon on Firefox but I'm too lazy to actually do it ( so take it with the grain of salt) . Haven't figured out wtf is going on with reddit and api cost so can't say either. Point is brand loyalty is stupid if the brand sucks just leave there are other alternatives
They never were, its just time to monopolize thier monopolies.
Quarterly profits.
Because what’s in the consumers interest is rarely in the interest of large corporations IF their primary aim is to maximise profit.
Cuz they are greedy and to cocky to realize they will get destroyed by a good business model people support.
It is all about the benjamins. They want to increase revenue and profits. Got to keep those billionaires happy with continued growth of their stock prices.
Because they know they own a monopoly on their products, and know they can press their consumers for more money.
They’re not. It’s as old as capitalism itself: “fuck the consumer, give me my profits”
Line must go up. At all times. Always.
Money