First off, even if Netflix were entirely correct that they have strong incentive to maximize hours watched under no-ads plans, the incentive is way, way higher under with-ads plans, and the same goes for ChatGPT under such a plan
Someone please help me with a related incentive question: why are all these platforms incentivized to have us all view the same thing? From the ad revenue model as I understand them, it appears to me that they should be incentivized to have us watch different things, but that’s not what I observe, not what the graphs on profit per content creator appears to show objectively.
As I understand the existing incentive: big creators get better payment terms than small creators. If I sign with Spotify, they aren’t giving me as much money as a percentage of ad revenue as they give Joe Rogan. Same with Twitch, Instagram, YouTube, Netflix, Amazon, Hulu, Substack, etc the bigger creator (whether a company or an individual) gets more money per advertisement than the small creators. Therefore, if 1 million people consume 1 hour of content, the platform has higher profit if those 1 million people each consume 1 million different videos/shorts/podcasts/articles. Yet, all platforms will use algorithms that drive those 1 million people towards the biggest, most expensive content provider on their channel.
It cannot plausibly be because the biggest creator is universally the best fit for every consumer. Presumably, there is over 50% likelihood that for each individual person some lesser popular content creator is a better fit for their specific taste. Yet all the providers steer people towards whatever is popular.
I assume this is reducing their profit per hour of content consumed, and providing worse experiences for customers, so where am I wrong or if I am not wrong, why do they do it?
Netflix, I get steering viewers to their original content because no ads and they want to show their original content is popular. But why do all of them do it?
I have to be missing something. I expect, if they were actually steering consumers towards perfect recommendations, I assume that the graphs of income for content creators would look markedly less extreme. Yes top creators would be better plugged into the moment than average, but the current situation seems too extreme.
People like being part of a big fandom? The user might just be more satisfied by a recommendation that sorts them into an interest group — a fandom, a following, a subculture — than by the maximally individualized recommendation.
The effects are too big for that to be the answer. Look at any graph, the hockey stick is extreme. The top tiny percent get vastly too much traffic for it to be fandom. And it is financially against the best interest of the company involved.
Someone please help me with a related incentive question: why are all these platforms incentivized to have us all view the same thing? From the ad revenue model as I understand them, it appears to me that they should be incentivized to have us watch different things, but that’s not what I observe, not what the graphs on profit per content creator appears to show objectively.
As I understand the existing incentive: big creators get better payment terms than small creators. If I sign with Spotify, they aren’t giving me as much money as a percentage of ad revenue as they give Joe Rogan. Same with Twitch, Instagram, YouTube, Netflix, Amazon, Hulu, Substack, etc the bigger creator (whether a company or an individual) gets more money per advertisement than the small creators. Therefore, if 1 million people consume 1 hour of content, the platform has higher profit if those 1 million people each consume 1 million different videos/shorts/podcasts/articles. Yet, all platforms will use algorithms that drive those 1 million people towards the biggest, most expensive content provider on their channel.
It cannot plausibly be because the biggest creator is universally the best fit for every consumer. Presumably, there is over 50% likelihood that for each individual person some lesser popular content creator is a better fit for their specific taste. Yet all the providers steer people towards whatever is popular.
I assume this is reducing their profit per hour of content consumed, and providing worse experiences for customers, so where am I wrong or if I am not wrong, why do they do it?
Netflix, I get steering viewers to their original content because no ads and they want to show their original content is popular. But why do all of them do it?
I have to be missing something. I expect, if they were actually steering consumers towards perfect recommendations, I assume that the graphs of income for content creators would look markedly less extreme. Yes top creators would be better plugged into the moment than average, but the current situation seems too extreme.
Thanks for any insight!
People like being part of a big fandom? The user might just be more satisfied by a recommendation that sorts them into an interest group — a fandom, a following, a subculture — than by the maximally individualized recommendation.
The effects are too big for that to be the answer. Look at any graph, the hockey stick is extreme. The top tiny percent get vastly too much traffic for it to be fandom. And it is financially against the best interest of the company involved.