Cautionary tales

I’ve been online for nearly 34 years, and I’m thinking of becoming a child. Or at least, a child to big user-to-user social media services, which next week will start asking for proof of adulthood. On July 25, the new age verification requirements under the Online Safety Act come into effect in the UK. The regulator, Ofcom, has published a guide.

Plenty of companies aim to join this new market. Some are familiar: credit scorers Experian and Transunion. Others are new: Yoti, which we saw demonstrated back in 2016, and Sam Altman and Andreessen Horowitz-backed six-year-old startup World, which recently did a promotional tour for the UK launch of its Orb identification system. Summary: many happy privacy words, but still dubious.

Reddit picked Persona; Dearbail Jordan at the BBC says Redditors will need to upload either a selfie for age estimation or a government-issued ID. Reddit says it will not see this data, only storing each user’s verification status along with the birth date they’ve (optionally) provided.

Bluesky has chosen Kids’ Web Services from Epic Games. The announcement says KWS accepts multiple options: payment cards, ID scans, and face scans. Users who decline to supply this information will be denied access to adult content and direct messaging. How much do I care about either? Would I rather just be a child to two-year-old Bluesky?

On older sites my adulthood ought to be obvious: I joined Twitter/X in 2008 and Reddit in 2015. Do the math, guys! I suppose there is a chance I could have created the account, forgotten it, and then revived it for a child (the “older brother problem”), but I’m not sure these third-party verifiers solve that either.

Everyone wants to protect children. But it doesn’t make sense to do it by creating a system that exposes everyone, including children, to new privacy risks. In its report on how to fix the OSA, the Open Rights Group argues that interoperability and portability should be first principles, and that users should be able to choose providers and methods. Today, the social media companies don’t see age verification data; in five years will they be buying up those providers? These first steps matter, as they are setting the template for what is to come.

This is the opening of a floodgate. On June 27 the US Supreme Court ruled in Free Speech Coalition v. Paxton to uphold a law requiring pornographic websites to verify users’ ages through government-issued ID. At TechDirt, Mike Masnick called the ruling taking a chainsaw to the First Amendment.

It’s easy to predict that here will be scandals surrounding the data age verifiers collect, and others where technological failures let children access the wrong sort of content. We’ll hear less about the frustrations of people who are blocked by age verification from essential information. Meanwhile, child safety folks will continue pushing for new levels of control.

The big question is this: how will we know if it’s working? What does “success” look like?

***

At Platformer, Casey Newton covers Substack’s announcement that it has closed series C funding round of $100 million, valuing the company at $1.1 billion. The eight-year-old company gets to say it’s a unicorn.

Newton tries to understand how Substack is worth that. He predicts – logically – that its only choice to justify its venture capitalists’ investment will be rampant enshittification. These guys don’t put in that kind of money without expecting a full-bore return, which is why Newton is dubious about the founders’ promise to invest most of that newly-raised capital in creators. Recall the stages Cory Doctorow laid out: first they amass as many users as possible; then they abuse those users to amass as many business customers (advertisers) as possible; then they squeeze everyone.

Substack, which announced four months ago that it – or, more correctly, its creators – has more than 5 million paid subscriptions, is different in that its multi-sided market structure is more like Uber or Amazon Marketplace than like a social media site or traditional publisher. It has users (readers and listeners), creators (like Uber’s drivers or Amazon’s sellers), and customers (advertisers). Viewed that way, it’s easy to see Substack’s most likely path: raise prices (users and advertisers), raise thresholds and commissions (creators), and, like Amazon, force sellers (creators) into using fee-based additional services in order to stay afloat. Plus, it must crush the competition. See similar math from Anil Dash.

Less ponderable is the headwind of Substack’s controversial hospitality to extremists, noted in 2023 by Jonathan Katz at The Atlantic. Some creators – like Newton – have opted to leave for competitor Ghost, which is both open source and cheaper. Many friends refuse to pay Substack even when they want to support creators whose work they admire. At the time, Stephen Bush responded at the Financial Times that Substack should admit that it’s not a publisher but a “handy bit of infrastructure for sending newsletters”. Is that worth $1.1 billion?

Like earlier Silicon Valley companies, Substack is planning to reverse its previous disdain for advertising, as Benjamin Mullin and Jessica Testa report at the New York Times. The company is apparently also looking forward to embracing social networking.

So, no really new ideas, then?

Illustrations: Unicorn (by Pearson Scott Foresman via Wikimedia.

Wendy M. Grossman is an award-winning journalist. Her Web site has an extensive archive of her books, articles, and music, and an archive of earlier columns in this series. She is a contributing editor for the Plutopia News Network podcast. Follow on Mastodon or Bluesky.

All change

One of the reasons Silicon Valley technology company leaders sometimes display such indifference to the desires of their users is that they keep getting away with it. At Facebook, now Meta, after each new privacy invasion, the user base just kept getting bigger. At Twitter, despite much outrage at its new owner’s policies, although it feels definitely emptier the exodus toward other sites appears to have dropped off. At Reddit, where CEO Steve Huffman has used the term “landed gentry” to denigrate moderators leading protests against a new company policy…well, we’ll see.

In April, Reddit announced it would begin charging third parties for access to its API, the interface that gives computers outside its system access to the site’s data. Charges will apply to everyone except developers building apps and bots that help people use Reddit and academic/non-commercial researchers studying Reddit.

In May, the company announced pricing: $12,000 per 50 million requests. This compares to Twitter’s recently announced $42,000 per 50 million tweets and photo site Imgur‘s $166 per 50 million API calls. Apollo, maker of the popular iOS Reddit app, estimates that it would now cost $20 million a year to keep its app running.

The reasoning behind this could be summed up as, “They cost us real money; why should we help them?” Apollo’s app is popular, it appears, because it offers a cleaner interface. But it also eliminates Reddit’s ads, depriving the site of revenue. Reddit is preparing for an IPO later this year against stiff headwinds.

A key factor in this timing is the new gold rush around large language models, which are being built by scraping huge amounts of text anywhere they can find it. Taking “our content”, Huffman calls it, suggesting Reddit deserves to share in the profits while eliding the fact that said content is all user-created.

This week, thousands of moderators shuttered their forums (subreddits) in protest. At The Verge, Jay Peters reports that more than 8,000 (out of 138,000) subreddits went dark for 48 hours from Monday to Wednesday. Given Huffman’s the-blackout-will-pass refusal to budge, some popular forums have vowed to continue the protest indefinitely.

Some redditors have popped up on other social media to ask about viable alternatives (they’re also discussing this question on Reddit itself). But moving communities is hard, which is why these companies understand their users’ anger is rarely an existential threat.

The most likely outcome is that redditors are about to confront the fate that eventually befalls almost every online community: the people they *thought* cared about them are going to sell them to people who *don’t* care about them. Reddit as they knew it is entering a phase of precarity that history says will likely end with the system’s shutdown or abandonment. Shareholders’ and owners’ desire to cash out and indifference to Twitter’s actual users is how Elon Musk ended up in charge. It’s how NBC Universal shut down Television without Pity, how Yahoo killed GeoCities, and how AOL spitefully dismantled CompuServe.

The lesson from all of these is: shareholders and corporate owners don’t have to care about users.

The bigger issue, however, is that Reddit, like Twitter, is not currently a sustainable business. Founded in 2005, it was a year old when Conde Nast bought it, only to spin it out again into an independent subsidiary in 2011. Since then it has held repeated funding rounds, most recently in 2021, when it raised $700 million. Since its IPO filing in December 2021, its value has dropped by a third. It will not survive in any form without new sources of revenue; it’s also cutting costs with layoffs.

Every Internet service or site, from Flickr to bitcoin, begins with founders and users sharing the same goal: for the service to grow and prosper. Once the service has grown past a certain point, however, their interests diverge. Users generally seek community, entertainment, and information; investors only seek profits. The need to produce revenues led Google’s chiefs, who had previously held that ads would inevitably corrupt search results, hired Sheryl Sandberg to build the company’s ad business. Seven years later, facomg the same problem, Facebook did the same thing – and hired the same person to do it. Reddit has taken much longer than most Internet companies to reach this inevitable fork.

Yet the volunteer human moderators Huffman derided are the key to Reddit’s success; they set the tone in each subreddit community. Reddit’s topic-centered design means much more interaction with strangers than the person-centered design of blogs and 2010-era social media, but it also allows people with niche interests to find both experts and each other. That fact plus human curation means that lately many add “reddit” to search terms in order to get better results. Reddit users’ loss is therefore also our loss as we try to cope with t1he enshittification of the most monopolistic Internet services.

Its board still doesn’t have to care.

None of this is hopeful. Even if redditors win this round and find some compromise to save their favorite apps, once the IPO is past, any power they have will be gone.

“On the Internet your home will always leave you,” someone observed on Twitter a couple of years ago. I fear that moment is now coming for Reddit. Next time, build your community in a home you can own.

Illustration: Reddit CEO and co-founder Steve Huffman speaking at the Oxford Union in 2019.

Wendy M. Grossman is the 2013 winner of the Enigma Award. Her Web site has an extensive archive of her books, articles, and music, and an archive of earlier columns in this series. Follow on Mastodon or Twitter.