The Word of the Week: '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..."
A few days ago, I stumbled across a link to Cory Doctorow’s Pluralistic blog post about “Tiktok’s enshittification," and I haven’t stopped thinking about it since.
It’s a great piece of writing that helps explain the bait-and-switch platforms play on users and business partners alike. I’ll excerpt a few bits from it, but I really recommend just checking out the whole thing for yourself. It begins:
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, hold each hostage to the other, raking off an ever-larger share of the value that passes between them.
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Using Amazon as an example of an increasingly “enshittified” platform, Doctorow highlights the initial user value (things cost less on Amazon than at your local shop, and shipping was cheap, too). Founded in 1994, the company didn’t record a profitable year until 2003.
When a platform starts, it needs users, so it makes itself valuable to users. Think of Amazon: for many years, it operated at a loss, using its access to the capital markets to subsidize everything you bought. It sold goods below cost and shipped them below cost. It operated a clean and useful search. If you searched for a product, Amazon tried its damndest to put it at the top of the search results.
This was a hell of a good deal for Amazon's customers. Lots of us piled in, and lots of brick-and-mortar retailers withered and died, making it hard to go elsewhere. Amazon sold us ebooks and audiobooks that were permanently locked to its platform with DRM, so that every dollar we spent on media was a dollar we'd have to give up if we deleted Amazon and its apps. And Amazon sold us Prime, getting us to pre-pay for a year's worth of shipping. Prime customers start their shopping on Amazon, and 90% of the time, they don't search anywhere else.
Once it had the attention of shoppers, the company focused on building its business relationships by offering sellers sweetheart deals of low commissions and favorable placements on the site’s search results page. And as more sellers joined this Amazon alliance, it became increasingly difficult for retail holdouts. Amazon became a place where everybody who’s anybody operated. And thanks to the company’s rules about pricing, sellers couldn’t offer the same product on their own sites for less. This was fine when Amazon’s share of each sale was low, but that changed as the company pushed to take larger shares of the sales price.
“Today, Marketplace sellers are handing 45% of the sale price to Amazon in junk fees,” writes Doctorow. “The company’s $31b ‘advertising’ program is really a payola scheme that pits sellers against each other, forcing them to bid on the chance to be at the top of your search.”
And that’s (part of) why the site’s search feature is kind of garbage these days.
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.
Anyone who used Facebook or Twitter in the companies’ first decade in business has seen this happen firsthand. Matthew Inman, aka The Oatmeal, wrote a comic about this a while back.
How it used to be: “Come on over! I’ve got some neat stuff here,” says a character, pointing to a building labeled “Matt’s Website.”
What happened: “Actually, follow me over there. It’ll be easier for us to reach each other,” the character says, pointing at a big building with a Facebook logo and a marquee with the words, “Welcome new active users!”
Where we’re at now: “Hey, I made some new stuff. Can you show it to my followers?” the character says, pointing back at the shop from the first panel. The Facebook marquee now reads, “Door locks ENGAGED.” The next panel shows the character, alone, saying, “F&ck.” The Facebook marquee now reads, “PROMOTION! Boost this post for $10,000 and reach a fraction of your followers!”
The high cost of jumping ship.
The reason platforms are able to “enshittify” themselves with so little concern for how users will react to the deliberate steps they’re taking to make their products worse tends to be the high cost of actually jumping from one platform to a competitor. This draws from another of Doctorow’s recent articles.
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