It’s honestly really sad what’s been happening recently. Reddit with the API pricing on 3rd party apps, Discord with the new username change, Twitter with the rate limits, and Twitch with their new advertising rules (although that has been reverted because of backlash). Why does it seem like every company is collectively on a common mission of destroying themselves in the past few months?
I know the common answer is something around the lines of “because companies only care about making money”, but I still don’t get why it seems like all these social media companies have suddenly agreed to screw themselves during pretty much the period of March-June. One that sticks out to me especially is Reddit CEO, Huffman’s comment (u/spez), “We’ll continue to be profit-driven until profits arrive”. Like reading this literally pisses me off on so many levels. I wouldn’t even have to understand the context behind his comment to say, “I am DONE with you, and I am leaving your site”.
Why is it like this? Does everyone feel the same way? I’m not sure if it’s just me but everything seems to be going downhill these days. I really do hope there is a solution out of this mess.
You’re seeing a bubble burst.
The VC money is drying up and the current social media funding paradigm is breaking because of it.
It’s a bit like witnessing the Dot Com bubble burst again tbh.
It’s about time we moved on to a better way of doing things anyway, I’m pretty good with moving away from the old ad-based, exploit your community for profit model, personally.
I agree that investors requiring demonstrable returns has played a role in this cycle. Steve Huffman is desperate to show profits ahead of Reddit’s IPO, and Musk is desperate to recoup his $44B investment in the blue bird.
However, I believe that there’s also another consideration. Many of today’s platforms started out with a somewhat idealistic intent. Jack Dorsey wanted Twitter to be an open protocol, though never quite achieved his vision. Aaron Swartz contributed to the open design of early-days Reddit. Facebook was meant as a non-profit university community builder. Google had (and abandoned) a “do no evil” motto. Etc.
The original user-first approach of these platforms created organic growth and encouraged ambassadorship by motivated users who became frequent contributors, unpaid moderators, etc.
Over time, however, people moved on (Dorsey, or very sadly Swartz) or got greedy from success (Huffman, Zuckerberg). The focus shifted from user-first to advertiser-first. Platforms like Reddit still used a loss-leader approach of losing investor money on frills such as API because it helped sustain growth for a while longer.
But once critical mass was reached, there was no longer a need to coddle the most enthusiastic and long-time users. They had exhausted their usefulness. The platforms could finally embrace the advertiser-first model in which the user, not the content, becomes the product.
So here we are with the worst of both worlds. Reddit could have offered a reasonable paid API plan that would have allowed the thriving third-party ecosystem to retain the power users and contributors. Instead, it went all-in with a walled-garden approach buoyed only by advertising money, even if it means that the content quality dwindles. Twitter also went “private” in the sense that an account is now required to even view the content, and aggressively promotes its paid plan to users –who are still subject to interstitial ads and promoted content– even for basic hygiene features such as 2FA.
As for why Reddit, Twitter, and Discord shit the bed at almost the same time, part of it has to do with VC pressure (as mentioned by the parent), and part of it is they are the same generation (more or less) of social networks and are reaching an equivalent stage where buyout (Twitter) or IPO (Reddit) is the next logical step.
The writing is on the wall that a paradigm shift is in order. The pendulum has considerable momentum, though, and will allow the centralized, walled-garden web to thrive for a while longer, just like Facebook survives catering to mostly an audience of unsavvy boomers. But the swing back will gradually enable alternative models to grow that are based on open platforms and federated content. We’re just very, very early in this cycle.
Oh, and sorry for the long-ass essay, I got a bit carried away.
Maybe I’m wrong, but maintaining Reddit infrastructure seems pretty cheap to me as most of the contents are words only.
That used to be true until they made the insane move of self-hosting all of the images and videos using i.reddit and v.reddit rather than continuing the previous practice of everyone posting all of the media to imgur and youtube, etc.
They just had to own everything themselves, even if it meant giving themselves running costs that would inevitably climb to youtube-like expenses because of all of the media streaming.
Pure madness.
It’ll be interesting if any of these “owned by the people” platforms will establish themselves the same way the private social media companies have in the past. Mastodon is probably most successful when it comes to a decentralized platform but it’s not the there for me at the moment when it comes to the user base.
You can argue that it’s not supposed to be Twitter or whatever but you can’t deny the usefulness of everyone being an user under the same address or the wealth of information that comes with being giant. Decentralized platforms have an inherent handicap since there will always be moderation that’s up to the admin so every instance will differ in some way (and let’s not get to the technical problems that at least here are prevalent). It’s harder for companies, countries and other official sources to establish themselves because they subject themselves to moderation of a private third party and jumping from instance to instance, forgoing the extra work it is, is just disruptive and confusing to their audience. They could always start their own instance but that’s also a lot of work compared to just creating a Twitter account. There might be some business angle here though but it all just seems too convoluted at least for now.
Maybe internet will be just different and less-centralized in the future. At least it’s good that the profit seeking private companies have less power.
The internet used to be more decentralised. There were lots of smaller websites, blogs, forums etc, which people discovered via word of mouth, search engines, and forgotten things like webrings. It’s only recently that big monolithic social media platforms took hold.
Tech is often cyclical, we could now be swinging back to a more decentralised web, but with the benefit of newer technologies. Right now it’s almost a new “wild west” as new platforms appear and new ideas like federation are experimented with. Some will rise, some will fall, some will go off in the corner and do their own thing. While all that happens it’s going to be a bit messy, much like it was in the 90s with the initial rise of the web.
I miss the phpBB days. I was on some great forums and content was curated by people who were passionate about the topics. There were serious spaces, silly spaces, helpful spaces, and malevolent spaces. Google still did a decent job of surfacing real, user-generated content back then. You could always refine your search further to find niche information and that just doesn’t work anymore. Everything is brand names and every company is trying to make their brand a verb.
This recent rebellion between platforms and communities has been interesting to watch. Communities are not locations in cyberspace, they’re still people. Now, with the fediverse, thanks to open-source developers and the kind souls who coughed up some dough for server costs, we now have more choices of where we congregate online. I love threaded topic-based conversations so something like this place is exactly where I want to be. I think this unrest may level out in our favor, but if there’s a potential for evil, some arrogant jackass will take it, so I don’t expect it’ll be an easy journey. Enjoying the wild west feel you pointed out, very 90s!
I hope you’re right, sounds quite exciting!
Could you describe what “webrings” were? I’ve read about them in a similar thread, but couldn’t find any info on them.I’ve been online since circa 1993 and for the first decade or so, discoverability was a challenge due to the lack of efficient search engines like Altavista or (later) Google.
Webrings consisted in individual website owners (e.g., on Geocities) placing one or more banners at the bottom of their webpage linking to other like-minded sites, typically in quid-pro-quo manner (I link to you, you link back to me), or to a manually-curated directory of like-minded sites.
This was when “surfing the web” meant exactly that - you would surf from one site to another using hyperlinking within web communities. Bookmarking was then how you kept track of the most interesting sites you came across.
Now there is hardly a need for hyperlinking and bookmarking, since much of the content is centralized on a few platforms, and search engines take care of the discoverability of niche content.
Phew I feel old remembering webrings lol. Crazy to think how much the internet has changed since those early days thirty years ago.
Anyone else remember Infoseek? It was my favorite search engine because you could select to search within results to refine your search down to a single page of relevant results.
those early days thirty years ago.
I misread this ad thirteen and though, “haha silly it was 20 years ago.” Then re-read it and realized it said thirty.
Then I had to go sit down for a minute and contemplate my impending demise.
Could you describe what “webrings” were?
Oh god I feel old
Also all the people who think Usenet is just an obscure piracy mechanism.
Usenet was the greatest medium for discussion back in the early Internet days, and I’m excited that it’s finally being recreated in the form of this Fediverse thing.
The way a lot of dot-com startups work, they have high fixed costs – stuff you pay no matter how many users you have, like programmers – and low marginal costs, stuff you pay based on how many users you have.
That means that it’s good to be big, because you can spread those fixed costs over many, many users. One programmer writing software used by five hundred million users can make a lot more money than software used by five users. The resulting effect is called economy of scale.
So the typical model is to take in a lot of investor money, operate at a loss, and lose money while offering a very compelling service to grow the userbase as quickly as possible.
Once you’re big enough, you can spread your costs around many users, so it’s easier to make money. You switch from growing your userbase to making money from it. Because you aren’t trying as hard as possible to draw in new users, the service is probably gonna get worse from a user standpoint.
If money becomes tight, then it’s harder to get investor dollars to operate at a loss with to grow userbase.
My understanding is that due to elevated interest rates in the post-COVID-19 situation, it’s more-costly to get investment money. So that will tend to push companies from the “growth” phase to the “monetization” phase.
That affects a bunch of companies, including Reddit.
“That means that it’s good to be big, because you can spread those fixed costs over many, many users. One programmer writing software used by five hundred million users can make a lot more money than software used by five users. So the typical model is to take in a lot of investor money, operate at a loss, and lose money while offering a very compelling service to grow the userbase as quickly as possible.
Once you’re big enough, you can spread your costs around many users, so it’s easier to make money. You switch from growing your userbase to making money from it. Because you aren’t trying as hard as possible to draw in new users, the service is probably gonna get worse from a user standpoint.”This kind of reminds me of how Legos are made. Creating the plastic molds from a molding machine to make a single Lego is extremely expensive, but if you make millions of Legos in mass production it reduces costs to make them dramatically to a point where the Lego Group has basically no operating costs to make them anymore. That turns Legos into an investor’s dream.
if you make millions of Legos in mass production it reduces costs to make them dramatically to a point where the Lego Group has basically no operating costs to make them anymore
That’s how economies of scale work in general, across many, many industries.
On a somewhat related note, your Lego example is more gloriously intricate than you may realize. So, you’re spend a lot of money to make a machine to produce Legos at close to zero cost. What happens if someone the next city over thinks they can make a better machine and undercut you?
One way to protect yourself is with the law. You set up intellectual property protection for your Legos and sue everyone who makes “Lehos”. This works for a while.
But problems come up. Intellectual property protections have a time limit. They also have a jurisdiction limit, as some guys in a different country, say, Xhina, don’t respect your country’s laws and start making those Lehos.
What do you do? How does your company survive?
Well, you can leverage the other valuable part of your company, the brand reputation, to do things that Lehos can’t, like make deals with other intellectual property holders to make themed Lego sets. So, you strike deals with Disney to make Star Wars and MCU sets, with Warner Brothers for those Harry Potter designs, with Microsoft/Mojang for Minecraft Legos (because they’re a perfect fit). That’s something that some random plastic injection mold company in China can’t do. You’re motherfucking Legos, not dipshit Lehos. You can do that, as well as open company stores and theme parks that are tourist destinations.
So, Legos survives, and not just that, but prospers.
