Headline of the Day

Streaming’s Slow Enshittification Continues As Netflix Kicks Users Off Cheapest Ad-Free Tiers

—Techdirt

Yeah,this pretty much nails it.

This raises a linguistic issue, before Cory Doctorow coined the term, there was very little discussion, much less any awareness, of how companies, particularly tech firms, were going out of their way to screw their clientele over time.

Now that we have a word, we all know.

Eric Arthur Blair (aka George Orwell) described this phenomenon in his description of Newspeak.

We’ve illustrated repeatedly how as streaming subscriber growth has slowed, streaming giants have had to pivot to some bad industry habits to ensure Wall Street gets those sweet improved quarterly returns. That’s included everything from utterly pointless layoff-creating mergers and price hikes, to annoying new restrictions and a steady increase in ads (that you have to pay more to avoid).

Streaming giants want to drive users to advertising because there’s greater profit potential in charging more for ad placement and collecting user behavioral ad data than there is in subscriptions. So that’s the direction the industry is headed, whether consumers like it or not. Some people don’t mind the ads; personally they just remind me that I’m living in a shallow dystopia.

Last year, Netflix stopped selling its cheapest $11.99 ad-free tier in the U.S. and UK. Last week, it started warning customers still on that plan in the UK and Canada (and soon the U.S.) that the plan will soon be shut down. There is a $7 per month ad-based plan, but you’ll need to pay extra if you want to do anything with it (multiple concurrent streams, 4K, share your password).

………

But the price of that introductory ad-based will also rise endlessly, disproportionate to product quality, feature restrictions, and shrinking device support. The need for improved quarterly returns (at any costs) creates a consumer “pricing funnel” that forces consumers to pay more and more money for a product that’s often getting worse (the traditional cable and broadband industries perfected this thanks to monopolization) with a steady uptick in monetizable restrictions.

………

To be clear, consumers still find value in streaming services like Netflix, and it remains an improvement over traditional cable because of cost and the ease of cancellation. But with “subscriber churn,” becoming an issue as cost-conscious users binge watch a service catalog then cancel, I can absolutely guarantee that these companies will find creative new ways to make cancelling annoying and difficult.

………

You’re also going to see a growing number of harmful sector mergers as executives (who have run completely out of ideas) try to boost stock valuations and grab tax cuts via purposeless consolidation. Consolidation whose only result historically has been more debt, higher prices, worse quality products, and layoffs.

And as more and more subscribers get annoyed and head to the exits (and alternatives like piracy), executives will blame absolutely everything (VPNs! China! Regulation! the wokes!) for their inevitable downfall, having learned absolutely nothing in the process.

Of course they will have learned nothing.  To quote Upton Sinclair, "It is difficult to get a man to understand something, when his salary depends on his not understanding it."