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...
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.
We are at the end of the "free lunch" era of tech. Before, there was a lot of investment in tech because it was very easy for rich people to get loans, and sink it into tech companies or startups. With inflation at its high pace, banks failing, (esp. CV bank for our case) and the hike of interest rates, many tech companies are trying to make up the loss of revenue in anyway they can. Either by cutting staff and laying off people, or squeezing every dime out of every customer they can.
Before it was just accepted that some users would not monetarily engage with a platform, either by just lurking, blocking ads, mooching off a friend's account, or never buying any of the monetary perks being offered. Now they are doing their best to apply pressure to these people. Either they will go away entirely, and not expend anymore of the company's resources, or they will cave and put some money into the system by making purchases and consuming ads.
This has been growing trend since late last year, but this year in particular has caught many tech companies with their pants down. The days of burning free money for tech are over, and they are trying to scrounge together cash by any means necessary.
Lemmy and Kbin: The Best Reddit Alternatives? ( www.pcmag.com )
Love Reddit but tired of what's happening to it? We check out Lemmy and Kbin, two open-source fediverse alternatives that are growing fast.
What’s with social media companies trying to destroy themselves recently? ( kbin.social )
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...