Digital Platform Policy Highlights - Digest 23
Q4 2023 and Q1 2024: This post outlines how certain platform policy changes benefit/hurt subgroups of users who derive high utility from certain premium features.
This post is part three of a series documenting policy changes and feature improvements introduced by platforms in Q4 2023 and Q1 2024.
TL;DR → Policy Changes to extract surplus from a subgroup of users who value some specific features include:
Unreal Engine changing the pricing model for non-game developers in 2024.
X charging new users in New Zealand and the Philippines $1 per year
Fortnite Tweaking Creator Payouts, Linking Earnings to Player Spending
Spotify Expands Into Audiobooks, Challenging Audible
Spotify, the music and podcast streaming service, is launching a new audiobook offering for its premium subscribers in 6 countries including the US. It has struck deals with major publishers and will pay them based on the users' listening time. Spotify hopes to disrupt the audiobook market, dominated by Amazon’s Audible. Publishers and authors could benefit from reaching a wider audience, but they could lose out if people who would have otherwise bought an audiobook streamed it instead. Spotify’s move into audiobooks is part of its strategy to become the everything store for audio, following its success in music and podcasts. (link)
Unreal Engine to change pricing model for non-game developers in 2024
Epic Games, the company behind Unreal Engine, has announced that it will change its pricing model for non-game developers starting next year. The new pricing model charges developers for each person using the product, similar to Maya and Photoshop, and will affect industries such as automotive and film. The approach is unlikely to be as controversial as competitor Unity’s proposed pricing changes, leading developers to revolt against the company and force it to scale back. (link)
X Launches Verified-Only Reply Feature
X has introduced a feature allowing users to restrict replies to their posts to only verified accounts. The change aims to make paid verification more attractive, but it could hurt public discourse, especially since it would be more challenging for non-paying users to counter misinformation. Since many verified accounts are bots, the feature is unlikely to improve the quality of discourse. (link)
X charges new users in New Zealand and the Philippines $1 annually.
X is introducing a $1 per year mandatory subscription for new users in New Zealand and the Philippines as part of a “Not A Bot” program. The subscription is ostensibly designed to reduce spam and bot activity (a long-standing issue for X) but could also be a way for the company to get some extra cash. From my assessment, the $1 per year is not to throttle bots: many accounts that pay for X Premium are also bots. It is probably to minimize the “count” of bots by restricting the number of accounts a single credit card is linked to. (link)
Fortnite Tweaks Creator Payouts, Linking Earnings to Player Spending
Starting November 1 2023, Fortnite changed how it pays its game creators. Now, if players spend the game's virtual currency, V-bucks, around the time they play a creator's game, that creator gets a cut. This is part of Epic Games' plan to motivate creators to make more engaging games that encourage players to spend. While Epic and game creators should benefit from the new payout structure, players might suffer if creators focus on too many paid features to their games, compromising the quality of the game play. (link)
Apple's "Contingent Pricing" Pilot for Subscriptions
Apple is testing "contingent pricing for subscriptions" in the App Store, allowing developers to offer discounts for customers with multiple active subscriptions. This new model could foster partnerships between developers and enhance the attractiveness of subscription bundles. While Apple benefits from receiving a cut, it is interesting to note that Apple (and potentially Google) is leveraging its dominant position to re-bundle services that, in its unbundled state, shaped the app economy's dominance. (link)
YouTube's Enhanced Product Tagging Feature
YouTube is rolling out new tools for creators to showcase product ads in their videos strategically. Creators can now add timestamps to tagged products, allowing a shopping button to appear at specific moments during a video. This update, aimed at simplifying collaborations between creators and companies, includes bulk tagging of affiliate products and insights on revenue-generating items in YouTube Studio. These features offer creators more control over product placements and the potential to earn from older, high-traffic content. It could also make it more difficult for users with ad-blockers to avoid ads. (link)
Research help from Anna Li, John Mai, Anantesh Mohapatra, Marshall Singer, Angelina Wang and Jennifer Xie (Thanks a ton, folks!)
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