Because companies make their best and most reliable income from subscriptions.

C A P I T A L I S M

Istg this is a bot

Adobe opened the floodgates and it’s been downhill since

Online subscriptions have actually been a thing for a long time. In some ways it’s even fallen out of favor, especially with the rise of the “freemium” model. MMOs are a great example of this as subscriptions used to be the price of entry with no other monetization, where as these days if an MMO uses subscriptions it’s a secondary “convenience” fee after entry that is almost always combined with MTX bullshit.

If you’re talking specifically about SaaS bullshit, it’s because it required a certain level of infrastructure before it became practical. We had to move away from cash and needed reliable internet connections first, amongst a host of other developments. Anything that couldn’t be a cash purchase in a physical store was losing significant market share. This didn’t stop time restricted licenses on software still being a thing, but it was generally pretty niche software.

‘recurring revenue streams’. businesses can make more money selling products as services than actual things, and more reliably.

take adobe licensing as a perfectly example of this enshitification.

Bc people get stupider over time, it seems. :-(

If you had to pick, would you rather get a large ammount of money semi regularly, or a smaller ammount of money on a consistant schedule, oh and there is no alternative for your customer than to keep paying for as long as they use your product.

It’s a lot easier and much much cheaper to run a subscription payment model today than it was 10-20 years ago.

Less people were tech literate back then, and the ones who were would likely pirate things like music, than consider buying things out of convenience.

When everyone and their grandmas got online, convenience was something more people were willing to pay for.

That’s just my theory though.

It’s a similar reason retail stores try and push their loyalty programs, it’s a more guaranteed source of income than a one time payment.

I’d like to add a little contrast to the usual “corporations bad” attitude.

First of all: anyone selling anything will tell you that recurring revenue is a much better way to make money than one-of sales. It’s better to have a thousand customers paying a dollar per month than to sell stuff for 20 bucks at a time. With recurring revenue, you don’t need to save up an arbitrary amount to make it through the rest of the year after making a sudden profit; you can expect your company’s income to rise and fall gradually and predictably. This is especially true in digital services, where customers expect constant updates, content, and maintenance for a long time after paying just once. There were a few Reddit apps that got shut down, where people paid 20 dollars years ago who wanted their money back because the app stopped working; you can no longer sell something digitally and be done with it.

Many companies that are now ruling the internet have been running a loss for years. Some have never made a profit in their existence. The way they operated was to take investor money, burn it all on providing free services to customers, and then hope go get bought by bigger companies (Apple/Google/Microsoft/Facebook) or to find new investors before money ran out.

Take Unity, for example, heavily criticised by developers a few months ago: they’re losing hundreds of millions every year, and have done so for a long time. As long as investors keep pumping money into the company that’s fine, but there’s a limit to how much you can get out of investors.

No nornal business can compete with businesses that operate at a massive loss. All paid services or ad supported businesses disappear, merge, get bought out, and soon huge companies backed by the super rich are the only alternative.

Every real alternative to Youtube has shut down. Video hosting is incredibly expensive, and ads simply aren’t enough to pay for all that storage, processing, and networking. There were companies that offered a small free plan and a paid premium plan, but they all evaporated because Youtube offered better service for free.

Now Youtube is the only alternative, and the damage has been done. You can tell, because the reaction to Youtube actually taking action against ad blockers isn’t “I’m switching to <x>” but “how could they do this to us”.

Now, the competitors are all gone. There’s nothing customers can switch to, so companies are free to do what they wish. What’s perhaps worse: covid caused an economic downturn that upset the financial system. Inflation went up, and to prevent that, governments around the world have raised interest rates. You see, for a couple of years now, the interest rates for many financial institutions were negative. Basically, borrowing money earned you money. This allowed for people with huge assets to leverage their property and borrow incredible amounts of money to invest. Now, borrowing money costs money again. Prices are up, people stop buying new stuff, so investors are less and less interested in making risky investments.

For companies running on stock prices and investor opportunities, this is awful. Suddenly, they need to cover their losses. Cue drastic price increases, monetization efforts, and enshittification. For some companies, this is just them having finally taken out their last real competitor and finally getting their money’s worth of the billions they’ve burned over the last decade, for others, these are the last ditch efforts of companies that will collapse as soon as investors discover the company has no real value and it’ll never make a profit.

Of course, there’s a bit of inflation as well: more people want more money because prices have gone up. Of course, most of the price hike money flows to the top, but execs don’t like giving up their bonuses and companies may be legally obligated to pay out huge amounts of money to their investors. Raising wages across a company will also increase product prices to a certain extent, at least in the decent companies.

Then there’s the media industry: everyone and their dog are starting a streaming company, pulling their content out of others’ catalogues, and making loads more even if fewer people consume their content. You see, the “watch unlimited shows and movies for twenty dollars” model is bullshit. It’d work if no new content was ever produced, ut every media production company is investing many millions into new shows and series so they don’t lose their customers who have watched the older catalogue. This money has got to come from somewhere, and investors aren’t going to pay for that alone, especially now that their customers are downsizing.

Then there’s general shitty decisions by companies like Twitter, like taking out a loan for a couple of billion, stuffing that debt into the company, and now being strapped for cash. Using companies to take huge loans and extract money on the short term is depressingly common during mergers and such, but that practice will often lead to shutdowns, price hikes, and other problems.

A few decades ago, this wasn’t as big as a problem, but these days, companies keep getting bigger and bigger. The entire media industry, worth hundreds of billions a year, is merging into four or five companies. There are three or four shipping companies that ship almost every single good, from raw resources to what rolls out of the factory, around the entire globe. Train companies in the USA have bought each other out and are running themselves into the ground with cost cuts and short term thinking. Companies like Unilever produce everything you need to be alive, from the moment you’re born to the day you die. There are four of five companies in the world that sell almost all chocolate in the world, all of them employing slave labour.

Power has been concentrated to a few places in almost every industry, in almost every country. Without government intervention, the only companies that are able to compete are either backed by mega investors (that’s how Uber smashed the taxi industry) or other megacorps. Losses from one branch can be eaten by the profits of another, at least for a short while, and margins can be paper thin if a threat ever shows up.

Without investor money, antitrust action, and actual competition, costs are going up across the board, while products are free to get worse, because where else are you going to go?

We, as consumers, have participated in the race to the bottom by buying ever cheaper stuff, driving competition out of business, while voting for governments that are friends with the megacorps that control supply and demand. This is a process that has been going on for decades, perhaps centuries. Back in the day, antitrust laws kept megacompanies from becoming too big (by forcing them to split up when they get too big), but enforcement has been lacking for a long time.

I know this is Lemmy, but I don’t think this is a problem with capitalism necessarily. Capitalism brought us the internet, most medicine, and nearly every other invention in existence; the drive to compete for consumers’ money works, as long as it is guided by consumer and labour protection laws. The problem is that profit for profit’s sake has been allowed to go beyond all reasonable restrictions.

The controls and balances that kept capitalism fair, kept competition up, and helped divide wealth and power somewhat, have been eroded away. Bringing back the restrictions that were once in place and actually enforcing them can bring back balance, but we’ll need to come together and convince politicians not to listen to all the lobbyists.

imo, the subscription style is the evolution of “planned obsolescence”.

people are willing to give money if the goods have an expiration. so instead of the goods expiring, the concept of validity of the goods now expire. same money, but saves on making different goods altogether.