It's Built On a Foundation of Bullshit

And it doesn't seem like there's a way back

Bear in mind, I’m not an expert in most of what I’m about to talk about. So take it for what it’s worth. But you’ve subscribed here, so you probably have at least some interest in my take on it all.

So — why is all of social media and the streaming landscape imploding at once?

There are a few reasons for this, obviously, but the big one is greed. Corporate greed in this country is absolutely wild, and it impacts our lives in a lot of ways. But two that are sticking out right now are the collapsing social media and streaming businesses. I think the two are more directly intertwined than one might imagine.

The biggest way they are connected — and this is something that’s easy enough to fact-check — is that much of the modern internet is built on hype and speculation. Netflix may have pushed video stores out of business, but not because Netflix was actually, measurably, a better business model. It took the streaming platform years to finally turn any kind of profit at all, but venture capitalists and tech bros were so obsessed with the idea of “disrupting” a multi-billion-dollar marketplace that they just dumped money into it for years.

Yeah, Netflix became profitable — but in order to do so, it had to take on an enormous amount of investor money, push the video store market to the brink of extinction, and become the Kleenex or Band-Aid of streaming. For years, Netflix was basically the only game in town…and that’s what made them attractive to customers. Like the video stores that we had become accustomed to, Netflix had an enormous library that included virtually every “essential” title a customers was likely to come looking for.

The problem is, streaming platforms are not retail stores. Just because you bought a copy of Batman Returns one time, doesn’t mean you can rent it out to someone when The Flash is about to hit theaters and everyone is getting excited about Michael Keaton again. Streaming licenses are complicated, mostly short-term, and for most of the last decade, content owners have known that they wanted to start their own version of Netflix, and that once they did, their content wasn’t going to be available anywhere else.

The problem? There is no “only game in town” now, and with interest rates and inflation rising, investors aren’t looking to dump hundreds of millions of dollars into projects that might turn a profit in five or ten years.

Twitter, famously, has pretty much the same issue. The company Musk bought was bleeding money, and had only been profitable for something like one out of the last five years. Without venture capital backing, Twitter relies on advertiser revenue to break even, and Musk’s consumer-hostile practices almost immediately started scaring away the very people those advertisers wanted to advertise to.

All of this is happening against the realization by these big companies that their business models are…well…bad.

Take Warner Bros. Discovery: Discovery was a much smaller company than Warner Bros., so in order to buy it, they had to leverage themselves to Hell and back. Facing enormous debt, a fiscally conservative management team decided that the only way forward was to make massive cuts. They haven’t worked, though; Warners’ cuts have only created a more consumer-hostile environment, angered the creatives who work for them, and racked up a long line of losses at the box office and in the court of public opinion.

That’s more or less what happened with Twitter: Musk hugely overpaid for a company that was already in distress, and then made a series of management decisions that called his judgment and business plan into question. It sent consumers scattering and scared the hell out of his advertisers and investors.

And both streamers and social media platforms have learned that it’s actually pretty expensive to run massive media servers. This has led to Twitter throttling seemingly petty things in order to try and claw back some of the money it has been bleeding, whether it’s lower-resolution thumbnails or limiting how many tweets a user can see and interact with in a day, or closing down people’s dormant accounts and locking down direct messages.

Similarly, studios have been removing content from their servers. Now, there are a number of reasons for this, both legitimate and less so. In some cases, they are hiding behind the opacity of streaming numbers to write content down for tax benefits, and in other cases they’re just taking stuff down to shop it to a new home. In both cases, there are credible claims that part of the equation is a desire to skip out on fees due the creators of the content.

One easy way of looking at this is that Hollywood and their allies in tech were so obsessed with disrupting the market and charting a new future via streaming video, that they cut off the DVD market at the knees. And, no, this isn’t just me grousing because I like physical media.

There’s a problem inherent to their philosophy: DVDs, once pressed and distributed, can sit on a shelf, unsold, for months, and when they finally sell, everyone profits. With streaming, you can leave less-popular content idling on a server…but you’re paying for that server space, and by the time people actually sit down and watch it, there’s no guarantee that you’re making enough money off it to offset the cost of hosting (plus whatever residuals and royalties are due the creators).

So — Why is all of social media and streaming imploding at once? It is, in large part, because of a combination of corporate greed and the profound incompetence of the supposed “visionaries” that American capitalism teaches us to lionize. David Zaslav, Elon Musk, and their ilk gambled massive amounts of money in volatile markets, and now that the economy is struggling, they don’t have a clear path to profitability. But that can’t be their problem. It has to be a problem that’s passed on to the end consumer, by way of consumer-hostile practices, reduced services, and a seemingly random set of fees, penalties, and other microaggressions aimed at squeezing every cent out of the customer they can.

In the case of both Hollywood and social media, the barrier for entry is extremely high, so these irresponsible executives don’t fear meaningful blowback from their customer base. Mess with the password policy, nuke shows and movies that don’t exist anywhere else for their fans…whatever. What are they going to do — leave?

These oligarchs don’t value your business. They don’t respect you. They don’t like you. They know that they have built a system where their customer base feels locked in. Twitter becomes a cesspool of hate, abuse, copyright infringement, and spam? Well, since you’re never going to leave, instead everyone and their brother will try to make “the next Twitter” — a place where they can pressure you into relocating your digital life. Because if you aren’t willing or able to stop microblogging, you might as well be mircroblogging with them.

And you can’t drop your streaming package. Sure, now that you pile them all up on top of each other, you’re paying more for them than you ever were for cable — but what are you going to do? Buy your movies and shows? A recent study showed that less than 5% of new disc releases online are coming from legitimate sources. Studios are simply choosing to leave money on the table when it comes to physical media, so they can pressure you into staying trapped in your streaming bundle.

What’s frustrating is, there doesn’t seem to be a real way back out of this mess. Activist groups, emergency services, and others have expressed their frustration with Twitter’s implosion, because they had come to view the platform as a supremely efficient way to communicate with their people. And with studios so committed to streaming as a model that they will literally turn a blind eye to millions of dollars in pirated DVDs being sold in plain sight on Etsy, it’s pretty clear there’s no way home from that debacle, either.

Now, this is all a simplification. But it’s a rant that’s good to get out of my system, and I do think that for some readers who haven’t been following the way speculative investors have been pumping up these markets for the last decade, having it laid out with specific names and examples like this will likely be a useful exercise.

I know I haven’t been writing on here a ton, but the plan is to do more soon. For example: keep an eye out in the next few days for a lengthy treatise on why I think you should give the upcoming Superman movie reboot a fair shake.