Enshittification is a seemingly inevitable consequence resulting from a combination of the ease of changing the way the platform allocates value, combined with the nature of a “two-sided marketplace” in which the platform sits between buyers and sellers, holding each hostage to the other, grabbing an increasing share of the value that passes between them, Wired wrote on the subject.
This is how global platforms die: They abuse their users to make things better for their business customers; they end up abusing those business customers to get all the value back. Then they die.
When a platform launches, it needs users, so it becomes a value to users. An example of why is Amazon: for many years they operated at a loss, using their access to capital markets to subsidize everything that is bought by consumers. So the company sold goods below cost and delivered them the same way.
This attracted many business customers – sellers in the marketplace who turned Amazon into the “store for everything” it promised from the start. As the number of these sellers grew, Amazon switched to subsidizing suppliers. Kindle and Audible creators received generous packages. Marketplace sellers reached a huge audience, and Amazon took low commissions from them.
This strategy meant that it became increasingly difficult for buyers to find anything else but Amazon, which meant they only searched Amazon, which in turn meant sellers had to sell on the platform. Then the company started collecting the surplus from its business customers and sending it to its shareholders.
For many years it operated at a loss, using its access to capital markets to subsidize everything you buy. It sold goods below cost and delivered them below cost. It used pure and useful demand. If you searched for a product, Amazon did everything it could to put it first in the search results.
This attracted many business customers – sellers in the marketplace who turned Amazon into the “store for everything” it promised from the start. As the number of these sellers grew, Amazon switched to subsidizing suppliers. Kindle and Audible creators received generous packages. Marketplace sellers reached a huge audience, and Amazon took low commissions from them.
This strategy meant that it became increasingly difficult for buyers to find anything else but Amazon, which meant they only searched Amazon, which meant sellers had to sell on Amazon. Then Amazon started collecting the surplus from its business customers and sending it to Amazon shareholders.
The temptation to entitize is compounded by blocking interoperability: when Twitter bans interoperable customers, reduces APIs, and periodically terrorizes its users by removing them for including Mastodon joints in their bios, it makes it harder to leave Twitter and thus increases the amount of encitification users can forcibly obtain without risking leaving.
For many years, even TikTok’s critics grudgingly admitted that, no matter how observant and scary it was, they were really good at guessing what the platform’s users wanted to see. But TikTok couldn’t resist the temptation to show things that were trendy rather than what its countless users really wanted to see. The enchantment has begun, and now it’s unlikely to stop.
