As we’ve noted for a very long time, sometimes “dumb” tech is often the smarter option. In the rush to connect every conceivable technology and device to the internet (while seeing ever-improving revenues), “smart technology” companies routinely cut corners. And the first sacrifice usually made (behind customer service) tends to be consumer privacy and device security.
A new investigation by Consumer Reports found that major retailers like Amazon, Sears, Temu, and Walmart are selling thousands of different types of video doorbells that all have the flimsiest security imaginable. As a result, many of the devices can be hacked — sometimes from thousands of miles away — providing intruders access to your home video feeds.
Simply knowing a device’s serial number in some instances provided easy access to user video. Many doorbells failed to even encrypt the public IP addresses and Wi-Fi SSIDs sent over the internet. And in some instances, all it took was an attacker walking up to the physical device and putting it into pairing mode to gain access to live and recorded video streams.
The thousands of cheap, usually Chinese-made, video doorbells are sold under different brand names (like Eken and Tuck), but are otherwise virtually identical — down to the painful lack of security:
“The two devices stood out not just because of the security problems but also because they appeared to be identical, right down to the plain white box they came in, despite having different brand names. Online searches quickly revealed at least 10 more seemingly identical video doorbells being sold under a range of brand names, all controlled through the same mobile app, called Aiwit, which is owned by Eken.”
But as Consumer Reports notes, retailers also have some responsibility to not sell absolute garbage that not only doesn’t work, but puts potentially vulnerable people (like victims of stalkers) at additional risk. And by selling so many terrible products under so many different brand names even tracking the scope of the problem becomes an uphill climb for researchers.
Last week Amazon began charging Amazon Prime Video customers (who already pay $140 per year) an extra $3 extra per month to avoid ads that didn’t previously exist. One added wrinkle: apparently Amazon also pulled Dolby Vision and Atmos audio support from Prime Video unless users pay the additional toll to avoid ads, a change the company couldn’t be bothered to inform users of.
The move this week resulted in a class action lawsuit by annoyed subscribers, whose lawyers insist that Amazon violated subscriber agreements by suddenly charging for something that subscribers understood they were already paying for:
“Reasonable consumers expect that, if you purchase a subscription with ad-free streaming of movies and tv shows, that the ad-free streaming for movies and tv shows is available for the duration of the purchased subscription.”
We’ll see if this class action results in anything more than lawyers getting a new boat and Prime Video subscribers getting a $3 check sometime by 2027.
Prime Video’s efforts to nickel-and-dime customers is the latest example of the steady enshittification of a streaming video industry that appears to have learned nothing from the scale-chasing issues that plagued cable TV. Now that the market has saturated, streaming companies are looking for creative ways to provide Wall Street the unrealistic endlessly improved quarterly returns bean counters demand.
That inevitably results in a brand quality cannibalization, as once disruptive and innovative upstarts shift toward “creative” efforts to goose profits and lower costs. That generally means price hikes, layoffs, pointless mergers, and less money spent on quality content, as well as crackdowns on things that used to be consumer benefits, like the lax treatment of things like password sharing.
This kind of behavior, in turn, opens the doors to more affordable and convenient alternatives to streaming video subscriptions, whether that’s piracy or free services like Twitch or TikTok. At which point, executives at places like Netflix and Amazon blame everyone but themselves for the subscriber exodus. It’s simply how this never-ending cycle works.
Over the last few days there have been a few stories making the rounds on right wing media sites, claiming that Rep. Jim Jordan had exposed the White House pressuring Amazon to remove books related to COVID disinformation. This is based on a thread Jordan posted to ExTwitter.
If it’s true that the White House did coerce Amazon to remove books, that would be a clear First Amendment violation and a real problem. The White House should not be in the business of telling anyone what speech they can and cannot host. Ever.
Unfortunately, Rep. Jim Jordan has cried wolf so many times on misleading to outright false claims of the White House demanding censorship that it’s tough to take him seriously (which might also why no one outside of the Fox News/NY Post bubble has picked up on this story). Jordan has a track record of taking a complete nothingburger and misrepresenting it into “OMG CeNSorSHiP.”
And, because Jordan only released a few selected screenshots, and not the full details of the docs, it’s (again) difficult to know what actually happened here, and whether or not the White House actually overstepped its bounds. From what’s disclosed I think it’s possible that it did go too far, but what Jordan released doesn’t actually show that, and you would think if he’d actually found the smoking gun, he’d put it front and center. Instead, what he put front and center… is something that doesn’t say what Jordan claims it says.
To be clear, what books Amazon sells is none of the White House’s business, and the First Amendment forbids them from trying to coerce the company on this. There’s literally a famous Supreme Court case detailing why the government can’t pressure book sellers to remove books.
But, again, (and this is what the Supreme Court will be considering shortly in the Murthy case) the White House is still allowed to try to persuade private companies to change their policies. It just can’t coerce or threaten them into doing so. What’s unclear here (in part because Jordan is only releasing snippets, and not the full record) is which side of the line things fell on here.
What does seem clear is that Andy Slavitt, who at the time was the “Senior Pandemic Advisor” to the White House, wanted to talk to someone at Amazon about books promoting COVID misinformation:
If it’s just talking, that’s fine. If it’s pushing them to remove the content that’s a problem. And there’s at least some indication that people inside Amazon felt it might be the latter. This is the email that Jordan has been waving around the most:
Though, note that this is a “pre-brief” discussion, meaning Amazon folks trying to figure out what the White House might be asking. If it were after the meeting, that would obviously be even more concerning. But it’s not. It’s Amazon employees internally expressing concern that the White House might be trying to pressure them (which would be a problem) and telling other employees that they need to find out directly if that’s the case.
Jordan presents some of the screenshots out of order to make the narrative flow better (which again, raises questions about what’s really here). For example, he highlights Amazon declining to make certain changes that would get picked up by Fox News as being “too visible,” but (1) this email is from a week before talking to the White House so isn’t about pressure from them, and (2) doesn’t even appear to be about removing books, but about “customer behavior associations” and (3) the concern was in response to a wholly separate incident when Amazon chose to remove a book for violating its hate speech policies.
That suggests that the discussion was more about book recommendations rather than removing books (even as Jordan implies otherwise).
Also reading the actual screenshots that Jordan released, it looks like the White House was questioning if some of the books violated Amazon’s publicly stated policies on false or misleading information. That is, rather than demanding the books be removed, the White House was asking if they violated existing policy (which is very different than asking them to take them down). And, internally, Amazon was pointing out that the White House appeared to be misreading Amazon’s policy, which was actually about false or misleading metadata about the books, not about the content of the books (not that Jordan acknowledges this important nuance, because that would wreck his narrative):
Later on, Jordan claims that Amazon made decisions because they were “feeling pressure from the White House.” Though, again, reading the underlying document shows that they were much, much more concerned with bad press from Buzzfeed, and the “pressure from the White House” line is both partially redacted and a little unclear as to what exactly it refers to.
And, later on, when Amazon did change its policy, it was in response to a coming negative Buzzfeed article, not… the White House.
So, in the end… this again doesn’t seem to be the smoking gun the Fox News-o-sphere is running with.
I still think the White House probably shouldn’t be talking to Amazon about what books it offers anyway, but it’s difficult to see this being particularly damning, especially given the details. Combined with Jordan’s history of crying wolf on things like this, and his selective and misleading quoting here, this is just another non-story.
And, of course, that also means that even if Jordan ever did turn up a serious First Amendment issue, he’s already trained anyone serious not to pay attention to him. But, when looked at in context, this looks like the White House was asking Amazon if certain books violated existing policies, and Amazon telling them “no, you’ve misread our policies.” And then, later, following Buzzfeed reporters working on an article highlighting the promotion of nonsense peddling medical misinfo, they adjusted their policy not to remove books, but maybe not recommend them as highly. And, again, that appeared to be in response to bad press, and not the White House.
But, I guess, when you’re Jim Jordan and you’ve built up a huge profile making these exaggerated claims, you have to take what little breadcrumbs you’ve found and pretend they’re something much bigger.
A half-decade ago, Amazon was an emerging player on the facial recognition scene. Its proprietary blend was called “Rekognition.” At the outset, Amazon was definitely interested in getting it in the hands of as many cops as possible. Documents obtained by the ACLU showed the company was courting law enforcement agencies, seeking to sell them a high-powered facial recognition variant capable of doing things its competition couldn’t.
Rekognition can identify, track, and analyze people in real time and recognize up to 100 people in a single image. It can quickly scan information it collects against databases featuring tens of millions of faces, according to Amazon.
Like other providers of technology to law enforcement, Amazon kept this under wraps by tying up public agencies with restrictive non-disclosure agreements, agreements law enforcement agencies cited while rejecting public records requests.
Rekognition, as powerful as it was, still suffered from the major flaws inherent in its competitors. It performed much worse when applied to minorities and women, resulting in 28 members of Congress (most of them people of color) being misidentified as wanted criminals during a test run of the product by the ACLU.
This very public failure was soon followed by a string of very public failures (i.e., the killing of Americans, most of them minorities) by law enforcement agents, culminating in the murder of George Floyd by Minneapolis police officer Derek Chauvin, an event that prompted demonstrations across the United States.
Amazon reconsidered its cop-forward position and decided it wasn’t going to be part of the problem. In June 2020, it announced it would no longer be giving law enforcement agencies access to its facial recognition tech.
The FBI plans to use Amazon’s controversial Rekognition cloud service “to extract information and insights from lawfully acquired images and videos,” according to US Justice Department documents.
In its Agency Inventory of AI Use Cases, the DOJ lists the project, code-named Tyr, as being in the “initiation” phase for the FBI, which intends to customize and use the technology “to review and identify items containing nudity, weapons, explosives, and other identifying information.”
That information comes from the DOJ’s roundup of its in-progress AI projects [PDF]. And, at first glance, this would appear to violate Amazon’s promise to keep this tech out of cop’s hands.
But there are several caveats. As Amazon pointed out to The Register (and to Fedscoop) in response to a request for comment, it didn’t actually say cops couldn’t use the tech ever. They just couldn’t use it to do the thing they were most likely to use it for had Amazon not restricted that aspect of it.
“Amazon has implemented a moratorium on use of Amazon Rekognition’s face comparison feature by police departments in connection with criminal investigations. This moratorium does not apply to use of Amazon Rekognition’s face comparison feature to help identify or locate missing persons.”
So, there’s the loophole that law enforcement can use. And Amazon’s overall restriction does not apply to government agencies that aren’t in the business of law enforcement. However, the FBI is clearly a law enforcement agency and definitely would be interested in deploying another facial recognition option.
But, according to the DOJ document, Amazon’s tech is going to be used to “recognize” things that aren’t human faces.
Amazon Rekognition offers pretrained and customizable computer vision (CV) capabilities to extract information and insights from lawfully acquired images and videos. Currently in initiation phase to customize to review and identify items containing nudity, weapons, explosives, and other identifying information.
Content moderation, but it’s the FBI. The document doesn’t explain the end goal of this use of the tech. And another project listed in the document suggests Amazon’s tech is only part of the process. The other project also involves search content for certain things.
Computer vision algorithms trained using AI techniques are used to classify and identify content in lawfully acquired images and videos to enable a user to quickly find “content” of interest in multimedia data. All results are reviewed by a human and no action is taken automatically based on the sole result of the algorithms.
Adding these together and it sure looks like the FBI is trolling the open web looking for evidence of criminal activity. That’s a bit worrying if that’s what’s actually happening. It could be this tech would only be applied to content retrieved from seized devices or whatever, but the potential to convert the internet into an FBI fishing hole remains.
We’ll see where this leads. Or, you know, maybe we won’t. It all depends on how well the FBI can keep its secrets. And it’s not the only concerning thing utilizing unproven tech on the list. The DOJ is also hooking up the ATF to existing ShotSpotter systems run by local law enforcement agencies, adding yet another way for false positives to go horribly wrong. And another ongoing project utilizes AI to scan documents to identify privileged communications between suspects and their lawyers, hopefully to prevent DOJ prosecutors from accidentally accessing these communications.
Amazon is back in the law enforcement business, even if its facial recognition tech isn’t being used to search for faces. Then again, it never really left. It just allowed us to engage in our own assumptions about what its moratorium meant. And if we were wrong, well… that’s on us.
Updated to credit Fedscoop who reported on this prior to The Register.
Starting this week, Amazon Prime Video customers (who already pay $140 per year) will be charged $3 extra every month just to avoid ads that didn’t previously exist. Shifting toward ad-based tiers has been popular among streaming companies like Netflix, Max, Disney+, and Paramount. But whereas those services make a cheaper ad-based tier an opt-in choice for consumers, Amazon isn’t being so subtle:
“A key piece of Amazon’s ad model is that they are throwing you into its ad-filled tier as its default when you originally could watch Prime Video with no interruptions. Most competitors haven’t been so brash, and have introduced ads more subtly by offering a cheaper option.”
As new growth in streaming customers has slowed down, giant media companies have relegated to seeking new ways to give Wall Street their sweet, sweet, improved quarterly returns. That means not just price hikes, layoffs, pointless mergers, or less money spent on quality content, but crackdowns on things that used to be consumer benefits, like the lax treatment of things like password sharing.
Implementing advertising into the existing streaming model lets companies not only steadily jack up the price of subscription service, but steadily jack up the rates they charge advertisers. A big win for them, but a lower quality product for the actual user.
The problem is: once your on this particular road, there’s no end to it. Just ask Comcast. Or any company that has to shift from pesky disruptive upstart to giant turf protector.
It’s simply not good enough for publicly-traded companies to offer consumers an affordable product that people really like. They’ve got to provide steady quarter over quarter boosts to profits — at any cost. That results in a sort of self-cannibalization, recently popularized by Cory Doctorow as “enshittification.”
The streaming sector’s just getting started. It begins with price hikes, lower quality service, layoffs, pointless mergers (see: Max) and charging users more money to bypass annoyances that didn’t exist previously (Amazon is here!). But will eventually morph into things like lower quality customer service, entirely new restrictions, hidden fees, or making it hard as hell to actually cancel service.
Streaming is only at the beginning of the enshittification cycle, so I’d expect the value proposition to remain semi-respectable for another few years. But as the sector consolidates into a dwindling number of companies — all prioritizing Wall Street’s wishes over consumer satisfaction or product quality — I’d expect streaming to steadily become more and more like the shitty old cable industry it once disrupted.
At which point new entertainment business modes, free services (Twitch, YouTube, Tiktok) and piracy re-enter the frame as revitalized disruption agents, and the cycle repeats all over again.
Hey, everyone makes mistakes. Ring certainly did. Amazon’s home surveillance acquisition realized there was no one in the residential space willing to slavishly cater to cops.
Ring decided it would provide this supposed “public service.” It gave cops cheap/free cameras and urged them to hand them out to as many private citizens as possible. The intent was this: if regular people got free cameras from cops, they’d be less likely deny requests for recordings with or without a warrant.
Without a warrant was status quo. And when users resisted law enforcement advances, cops went to Ring directly with requests for footage stored in the cloud.
Things were working out well for Ring and their cop buddies. On top of portals created for law enforcement access, there was Ring’s neighborhood app. It may have seemed like a good idea to create an ultra-local portal for crime reports. But the reality was a nightmare: an app with a top-level brand name attached that served as portal for residents’ racism.
But Ring persisted. It seemed to believe the best path forward ran through the nation’s cop shops. Ring handed out free cameras and asked for nothing more in return than complete abdication by its law enforcement partners. Cops handed out cameras, but Ring handled public statements, responses to media inquiries, and specifically told law enforcement agencies this “partnership” was predicated entirely on Ring doing what was best for Ring.
There are tensions. On one hand, there’s the understandable willingness to give the paranoiacs what they want. People who think every brown-ish person is a latent threat to public safety should be given a voice on a platform that makes the most money when everyone — including cops patrolling the area — believes it’s inundated with latent threats. On the other hand, there’s the reality: crime rates have been dropping steadily for the last three decades. But if you acknowledge that fact, you can hardly justify your existence, much less your stranglehold on the market.
Ring cultivated close relationships with law enforcement agencies. It seemed like the easiest way to expand the reach of its market. But now, things are far less easily defined. Cops refuse to learn from their mistakes, which means their private partners in surveillance are implicated every time law enforcement officers fuck up on main.
The first expansion worked out well because cops were receptive. But examinations of the details of these partnerships exposed how willing Ring was to undercut common constitutional protections to keep cops happy.
Ring has finally realized its potential market included millions of non-cop Americans. If Ring wants to continue to make in-roads, it needs to shrug off its cops-first approach to retail. People do want to protect their own property, which means millions of people are interested in home surveillance cameras. What regular people aren’t as willing to do is be forced to share their recordings with cops just because (1) Ring stores recordings in its cloud, or (2) because Ring makes it easy for cops to avoid asking for consent by cutting end users out of the equation.
Ring did dial back law enforcement access after months of negative press. But its latest announcement makes everything official: if cops want access to footage, they’ll need to respect the Constitution, rather than just assume the Third Party Doctrine makes this formative text irrelevant. Here’s Matthew Guariglia, report for the EFF:
Amazon’s Ring has announced that it will no longer facilitate police’s warrantless requests for footage from Ring users. This is a victory in a long fight, not just against blanket police surveillance, but also against a culture in which private, for-profit companies build special tools to allow law enforcement to more easily access companies’ users and their data—all of which ultimately undermine their customers’ trust.
This is the next step in Ring’s slow withdrawal from its original position of ultimate law enforcement subservience. Having discovered that lying down with law dogs gets you covered in PR fleas, Ring is now seeking to salvage what’s left of its reputation.
This week, we are also sunsetting the Request for Assistance (RFA) tool. Public safety agencies like fire and police departments can still use the Neighbors app to share helpful safety tips, updates, and community events. They will no longer be able to use the RFA tool to request and receive video in the app. Public safety agency posts are still public, and will be available for users to view on the Neighbors app feed and on the agency’s profile.
This is what will matter going forward. Ring has changed its access for law enforcement. But it has kept lines open for “first responders.” Cops who have maintained good relationships with the neighborhoods they serve will be largely unaffected. They may lose always-on access, but they should be able to leverage their connections to obtain footage.
Most law enforcement agencies won’t have that luxury. They’re unwilling to build relationships with communities, which means Ring’s announcement will greatly restrict access to footage without a warrant. At any point, these agencies could have changed the calculus. But most agencies prefer to act as though they’re above working with community leaders or those living in the areas they patrol. So, this will hurt them, because they’ll no longer have the option to demand access to footage without creating a courtroom paper trail.
The change is so essential even a cop-friendly tech company like Ring can’t ignore it. Moving forward as a company millions of Americans can trust means publicly indicating law enforcement isn’t inherently trustworthy. Taking cops out of the loop will make it easier for Ring to sell cameras to the millions of Americans who believe their own property is worth protecting, but don’t necessarily believe law enforcement officers are of much use when it comes to protecting personal property.
No doubt this will result in more than a few law enforcement officials claiming the loss of easy access will lead to crime waves they’re apparently unable to anticipate, much less curtail. But they’ll have to face the uncomfortable fact that Ring’s decision to block access to recordings has been prompted by their own actions — actions that have made it clear to Ring it’s ultimately more profitable to gain the public’s trust, rather than bed down with any cop shop that will have it.
If you buy products on Amazon, you’re well aware of the Amazon brand spammers. These tend to be drop shippers or small (often Chinese) operations trying to sell knockoffs of whatever products might sell. But the products need brand names. In early 2020, the NY Times did an article about the phenomenon, “All Your Favorite Brands, From BSTOEM to ZGGCD.”
Brands that are neither translated nor Romanized nor transliterated from another language, and which may contain words, or names, that do not seem to refer to the products they sell. Brands like Pvendor, RIVMOUNT, FRETREE and MAJCF. Gloves emblazoned with names like Nertpow, SHSTFD, Joyoldelf, VBIGER and Bizzliz. Gloves with hundreds or even thousands of apparently positive reviews, available for very low prices, shipped quickly, for free, with Amazon Prime.
Gloves are just one example — there are at least hundreds of popular searches that will return similar results. White socks: JourNow, Formeu, COOVAN. iPhone cables: HOVAMP, Binecsies, BSTOEM. Sleep masks: MZOO, ZGGCD, PeNeede.
I’ll admit that I’ve definitely purchased products from these kinds of brands (and many of them are… fine?). But the names are so obviously not serious brands, it’s such a weird thing.
There have been a bunch of other articles over the years covering this phenomenon as well. Just last week, long-term friend of the site Chris O’Donnell posted about his search for a paper towel holder, and noted the naming oddities.
So I went to Amazon. This is a list of the first page companies selling the same 3 or 4 paper towel holders of questionable quality.
DEKAVA
ASTOFLI
YIGII
Fvviia
ZUNTO
Swaitee
PEDORUBY
WZKALY
FORIOUS
Kamenstein
MGahyi
theaoo
DAZILLO
Prodyne
Honmein
Mbillion
Aheucndg
ORLESS
JDGOU
CUXIXA
But, of course, in this age, if you need to come up with a fake brand, you no longer need to come up with a combination of letters that vaguely could stand in for a brand. Nope, we live in the “Generative Era.” You can just have ChatGPT create your name!
I’m sure it wouldn’t surprise anyone to find out that this was already happening, but it appears that some of these sellers are so lazy that they’ve either automated the entire process, or at the very least, they’re not even checking what ChatGPT is generating in slapping on a new brand.
The folks at Futurism noticed a bunch of new brands and product names for sale on Amazon using ChatGPT’s rejection notice as the name. Some of the results are… pretty revealing. This one basically admits that it was tasked with coming up a brand name connected to a trademarked brand name:
And I’m wondering if they have the “”I’m sorry but I cannot fulfill this request it goes against OpenAI use policy. My purpose is to provide helpful and respectful information to users” furniture in colors other than brown. Someone should ask… FOPEAS?
And who doesn’t want a chair that warns you of your unethical behavior in its very name?
Amazon has since removed all of these listings, but.. there are more. I found this lovely “Sorry but I can’t provide the analysis you’re looking for” beige table from “forwillsky” for only $1,146.09. A bargain. Note how it’s… um… “name” concludes each bullet point on “About this item.”
That same company also has this “Multi-Purpose Product” that has a strikingly similar name. Simplify your life!
Over at Ars Technica, they found a few more as well. Look, a purple… “sorry but I can’t provide the information you’re looking for.” Just what I was looking for.
I’m guessing these all disappear pretty quickly, but it does seem like yet another form of trust & safety/content moderation challenge for a company like Amazon that seeks to be a marketplace for all kinds of sellers.
While Comcast’s streaming service Peacock has now reached 30 million subscribers, Comcast has been taking an absolute bath on the proposition. Comcast CEO Mike Cavanagh says the company lost nearly $3 billion dollars on the effort last year alone.
The other streaming giants haven’t fared a whole lot better. Warner Bros Discovery, Disney, and Paramount all struggled to nab a profit as they collectively (and in many cases successfully) spent a ton of money (not always particularly wisely) to compete with Netflix.
Grabbing any kind of meaningful profits here came at a cost; streaming companies that eked out a profit often did so by nickel-and-diming their subscribers in new and annoying ways (see: Amazon’s decision to charge Prime Video customers an extra $3 just to avoid new ads, or Netflix’s and Disney’s decision to harass customers for sharing passwords), risking future defections.
While the losses are usually framed in the business press as just the cost of trying to compete in streaming, there was no shortage of dumb, wasteful spending. They paid their executives exorbitant compensation well out of proportion with their competence (see: Warner Bros Discovery CEO David Zaslav). They pursued pointless mergers that saddled them with mountains of debt. Netflix even launched a restaurant.
And as usually the case, it wasn’t the executives that paid for their wild spending and bad decisions fueled by Wall Street’s demand for improved quarterly returns at any cost. In most instances, like Disney, it was either consumers or the employees that paid the price:
“Disney, the largest traditional media company, is in the midst of a gutting restructuring that has featured 7,000 job cuts and attacks from activist investors. It lost more than $1.6 billion from its streaming businesses in the first nine months of 2023, during which its Disney+ service gained 8 million subscribers. The company says it will turn a profit in streaming in late 2024.”
“Analysts,” many of which are simply looking to goose client stock valuations, are already busy insisting that more mergers are the solution. Despite the absolute madness, bloodshed, debt, and chaos that resulted from the AT&T–>Time Warner–>Warner Bros Discovery merger. Have a huge ton of debt from the last two pointless mergers? Clearly the solution is more mergers:
“Analysts said the two companies’ high debt levels were an immediate concern for investors. “We suspect investors will focus on pro forma leverage above all else,” Citi analysts wrote in a note last week. They estimated that an all-stock combination of Warner and Paramount could yield at least $1 billion of synergies.”
Warner Bros and Paramount are the first to propose merging, but they won’t be the last. But they’re pursuing consolidation not because it’s good for the brand, company, or their longer-term visions. They’re pursuing it in order to nab mammoth tax breaks and to make stock prices temporarily jump.
In reality, these mergers don’t fix the actual problem, and in many instances make things worse. Bigger debt loads get recouped in the form of higher prices and even more layoffs. Less competition also means higher prices and lower quality product. We’ve noted how over-compensated, fail-upward executives in streaming are dead set in turning streaming video into old cable TV, having learned little from experience.
As these executives pursue mindless consolidation the underlying products will get worse. In turn, customers will either migrate back to piracy or more affordable (or free) alternatives like YouTube and TikTok. At which point, as we saw in the late 90s and early aughts, over-compensated executives will inevitably blame everyone and everything but themselves.
Thanks to industry consolidation and saturated market growth, the streaming industry has started behaving much like the traditional cable giants they once disrupted.
As with most industries suffering from “enshittification,” that generally means imposing obnoxious new restrictions (see: Netflix password sharing), endless price hikes, and obnoxious and dubious new fees geared toward pleasing Wall Street’s utterly insatiable demand for improved quarterly returns at any cost.
Case in point: Amazon customers already pay $15 per month, or $139 annually for Amazon Prime, which includes a subscription to Amazon’s streaming TV service. In a bid to make Wall Street happy, Amazon recently announced it would start hitting those users with entirely new streaming TV ads, something you can only avoid if you’re willing to shell out an additional $3 a month.
There was ample backlash to Amazon’s plan, but it apparently accomplished nothing. Amazon says it’s moving full steam ahead with the plan, which will begin on January 29th:
“We aim to have meaningfully fewer ads than linear TV and other streaming TV providers. No action is required from you, and there is no change to the current price of your Prime membership,” the company wrote. Customers have the option of paying an additional $2.99 per month to keep avoiding advertisements.”
If you recall, it took the cable TV, film, music, and broadcast sectors the better part of two decades before they were willing to give users affordable, online access to their content as part of a broader bid to combat piracy. There was just an endless amount of teeth gnashing by industry executives as they were pulled kicking and screaming into the future.
Despite having just gone through that experience, streaming executives refuse to learn anything from it, and are dead set on nickel and diming their users. This will inevitably drive a non-insignificant amount of those users back to piracy, at which point executives will blame the shift on absolutely everything and anything other than themselves. And the cycle continues in perpetuity…
Twitch has announced that the company is shutting down in Korea after regulators there imposed a ridiculous new regulatory framework that drove the company’s operational costs through the roof.
Basically: Korean telecoms convinced gullible regulators to pass a new regulatory framework wherein edge providers and content companies are forced to pay telecoms additional fees just to have their traffic successfully reach its destination (consumers). It’s in addition to bandwidth costs, and, as we’ve pointed out for a while, it’s a dumb cash grab and the latest extension of the longstanding net neutrality wars.
In a blog post, Twitch CEO Dan Clancy explains that with the addition of these new mandated network fees, the company has found it impossible to turn a profit in Korea and has been forced to close up shop:
“Ultimately, the cost to operate Twitch in Korea is prohibitively expensive and we have spent significant effort working to reduce these costs so that we could find a way for the Twitch business to remain in Korea. First, we experimented with a peer-to-peer model for source quality. Then, we adjusted source quality to a maximum of 720p. While we have lowered costs from these efforts, our network fees in Korea are still 10 times more expensive than in most other countries. Twitch has been operating in Korea at a significant loss, and unfortunately there is no pathway forward for our business to run more sustainably in that country.”
For the better part of the last few decades, global telecom giants have been trying to “double dip.” As in, not only do they charge businesses and consumers an arm and a leg for (often terrible) broadband, but they’ve been trying very hard to institute new regulatory frameworks where consumer and content companies alike pay telecoms huge sums of additional money for no coherent reason.
This idea that big ISPs are inherently owed a cut of the revenues of services traveling over their networks is what launched the net neutrality wars around the world several decades ago, when AT&T insisted Google “wouldn’t ride our pipes for free.” It’s evolved in dumber and dumber ways ever since.
Under Korea’s model, edge providers (like Netflix) are forced to pay “network service fees” to ISPs. Basically, ISPs there have claimed that they’re inherently owed more money if a TV show on Netflix is super popular, claiming they should be compensated for extra bandwidth costs.
Of course, bandwidth provisioning doesn’t really work like that. ISPs are supposed to build networks that can handle any peak capacity spikes caused by normal consumer demand. The origins of those demands are irrelevant. Consumers and edge providers have already paid an arm and a leg for bandwidth, particularly if regional monopolization has driven down any incentive to compete on price.
All they’re really doing here is trying to offload network operations and maintenance costs to someone else. In this case: Korean game streamers or Netflix users.
Demanding that popular companies pay more to telecoms just for being popular is an inherently stupid idea, but it’s been dressed up by telecom lobbyists as serious adult policy under terms such as “sender pays” or sometimes “Sending Party Network Pays” (SPNP). I’ve been dumbfounded by how these proposals have been treated as serious policy.
The efforts always begin with false claims that companies like Google and Netflix are somehow “getting a free ride” on the internet, despite spending billions in bandwidth, CDNs, undersea cables, and cloud infrastructure. From there, they usually involve some flavor of false claim that this model will help expand broadband availability to those in need. But its only real function is to fatten telecoms’ purses.
Now, regulatory capture is driving edge companies out of business, and driving up both bandwidth and content costs for consumers. It’s all predatory nonsense created by regulatory capture and corruption, and the telecom policy marionettes pushing the idea aren’t operating in good faith. They’ve hijacked regulators to implement systems that deliver telecoms billions of additional dollars for doing nothing.
And if you think this is only happening in Korea, it’s not. It’s been an ongoing debate in the EU, where telecoms have floated a direct tax on any company that accounts for more than 5 percent of a telco’s average peak traffic. Here in the States, FCC Commissioner Brendan Carr (R, AT&T) has been a big proponent of the idea for several years now.
Again, it’s basically telecoms trying to get paid twice for the same (often substandard) service. That it has been dressed up as a serious policy proposal is embarrassing. California’s net neutrality rules ban such practices, and if they’re worth anything, the FCC’s soon-to-be-restored rules will as well.