I mean there’s Reddit ofc, as well as Twitter in its entirety, Discord is implementing some dumb updates, there are issues with Tumblr as well as everything to do with Meta, and I’m sure there are plenty more (and I haven’t even touched other digital media, for example the Sims). Why is it all happening in the span of about a couple months?
Late stage capitalism You make a business and it goes well, you make some money everyone is happy.
But with time your profits will plateau or even decline. It’s natural, but businesses don’t understand that it is insane to expect a company to always turn crazy profits when the product does not evolve.
Companies like apple and Microsoft don’t worry as much because they are constantly evolving with new product.
Companies like Twitter, Facebook, reddit, Netflix have hit a wall where there really isn’t anywhere else to go so they start making shareholder centered decisions made by people who aren’t even in touch with the user base of their product.
It’s the money.
US Fed has raised interest rates, destroying money for the first time in decades in an effort to stop our inflation problem
The knock on effects is that banks literally have less money to lend to companies. Some companies are affected more than others by this environment. Tech was hit hard, extremely hard.
With hundreds of thousands of layoffs, tech industry is contracting. Silicon Valley bank literally evaporated in the span of 3 days. Twitter was losing money and had to sell out. StackOverflow is losing money and is currently selling out.
In this environment, Reddit is about to launch it’s long awaited IPO, the time when the public is allowed to directly buy Reddit stock and invest into the company. That’s what Initial Public Offering means. If Reddit does well, Reddit will pull in lots of money this year through this IPO.
The CEO of Reddit needs to prove Reddit is profitable, or if not profitable… Will eventually be profitable. Stockholders don’t care about Reddit drama for the most part, but most are smart enough to read financial sheets. Reddit needs to show growing revenue, growing profits and cutting costs to attract money.
As such, all of what Reddit’s CEO has done makes sense in the context of the IPO. He is betting that shareholders won’t notice the drop of high quality content creators from Reddit, since that’s not a financial number that’s reported. He can IPO, raising millions, maybe even billions for himself. The golden parachute outta here when everything gets screwed up in a year or two and collapses.
I think today’s investors are smarter though, and the bearish economy and high interest rates means more investors will pay attention to underlying issues.
Yeah, investors are going to be even more inclined to identify exactly why the platform might be successful in the future. They’re not going to blindly throw money at new IPOs (as much) because debt isn’t free anymore.
Lets take the example of Reddit. Reddit could have kept its costs to the minimum and could have run the site with the ad revenue that came in. In fact they could have talked transparently about their opex and asked for a simple donation drive every now and then like Wikipedia. If need be, they could have removed silly GIF replies and other stuff and focused on text alone. However this would not let them become the next Facebook. That’s what they wanted to be. At some point in their story was a choice to be forums 2.0 or get into a race to become a cash grab. Sadly they went for the latter.
n fact they could have talked transparently about their opex and asked for a simple donation drive every now and then like Wikipedia.
Let’s remember this about Kbin and the Fediverse.
I would donate to help counterbalance the wave of migration that brought me here.
What were the bad decisions discord is making? Im out of the loop
A lot of these companies have never been profitable and have been running on VC money on speculation alone until they reach critical mass and can turn on the monetization streams.
Because of capitalism, no seriously these decisions are based on money and growth. But both of these things are relatively finite. You can’t keep have exponential growth year after year. Eventually you will plateau but there isnt a mechanism in capitalism to accept that. So companies start forcing monetary gain.
Growth for the sake of growth is the ideology of cancer.
And like cancer, it will eventually kill its host once things are beyond saving.
Because easy money from a decade of low interest rates is disappearing.
I think the free money train in leaving the station and everyone is scrambling to be profitable. But that’s just an assumption based on twitch and Reddit right now.
Cory Doctorow has some very interesting blogposts on the topic. He call it enshittification. It’s more or less the business model of plattform Capitalism.
Start making alternatives, open source alternatives.
Over-centralisation.
This kind of slow degredation of services is quite normal, however, this time around the wider use of these degrading platforms is hitting harder. Even 5 years ago, most communities had an IRC rather than a discord, and most ran a forum, or a community forum, with other info being on a wiki.
These days a lot of content that used to sit on a forum now sits on twitter, or on reddit. Discord is the new IRC, and so on. These separate services were a lot less convenient, but more resilient.
Odds are, we might see similar smaller communities pop up again as things get worse in the larger ones. Folks are pinched for cash at the moment, and so free services like neocities might see a boom as fandoms abandon larger sites (again).
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Oh no…
I don’t know honestly, greed probably. But it’s such a shame. It seems like the internet as a whole is heading in a horrible direction, and not enough people care about it for there to be something done about it.
The climate is heading in a horrible direction, and not enough people care. Politics are heading in a horrible direction, and you know what? Not enough people care!
Sorry, the last 4 years has made me very cynical. And I’m in a particularly blue mood today.
dude i feel that. its just lame and hard to grip with
its like i wish almost that i didnt care
Because capitalism, that’s why.
I don’t think there was ever any illusion that reddit or Twitter were operating as charitable organizations, or even as non-profits.
OPs question suggests there was at least some illusion !
Because most services we are using aren’t sustainable. They all bleed money.
That’s by design, isn’t it? Dominate the market while operating at a loss then monetize once you have attained monopoly. Like Uber’s strategy. This is an awful way of conducting a business IMHO, it falsifies the economy. I honestly believe they should put severe regulations on this.
Ish.
It is a strategy that works when interest rates are 0%, and the 2008 recession was so bad that the IS Fed kept interest rates low until 2021.
Redo the math at 5% interest rates today and 13 years of $1 Billion investment needs to make $1.8 billion just to break even. Money losing strategies are nerfed in this new meta.
