This really is not a service issue. This is not a privacy issue.
YouTube as a service is … actually a great service, it pays creators well, it’s fast, it has decades of content, and it has tons of features.
It’s monetized with ads, you either watch those ads or you pay them. Using a VPN to get a lower price on the subscription is not a service issue, that’s abuse of regional pricing, and no company would accept that.
Using a VPN to get a lower price on the subscription is not a service issue, that’s abuse of regional pricing, and no company would accept that.
The internet’s most beloved company, Steam, also bans people for abusing the store using VPNs. So as much as I hate Google, i find nothing wrong with this.
More like regional pricing is an attempt to maximise value extraction from consumers to best exploit their near monopoly. The abuse is by Google, and savvy consumers are working around the abuse, and then getting hit by more abuse from Google.
Regional pricing is done as a way to create differential pricing - all businesses dream of extracting more money from wealthy customers, while still being able to make a profit on less wealthy ones rather than driving them away with high prices. They find various ways to differentiate between wealthy and less wealthy (for example, if you come from a country with a higher average income, if you are using a User-Agent or fingerprint as coming from an expensive phone, and so on), and charge the wealthy more.
However, you can be assured that they are charging the people they’ve identified as less wealthy (e.g. in a low average income region) more than their marginal cost. Since YouTube is primarily going to be driven by marginal rather than fixed costs (it is very bandwidth and server heavy), and there is no reason to expect users in high-income locations cost YouTube more, it is a safe assumption that the gap between the regional prices is all extra profit.
High profits are a result of lack of competition - in a competitive market, they wouldn’t exist.
So all this comes full circle to Google exploiting a non-competitive market.
More like regional pricing is an attempt to maximise value extraction from consumers
And right there I’m done with your comment. Regional pricing is incredibly important, without it everyone pays the US or EU price and there is no service provided period.
However, you can be assured that they are charging the people they’ve identified as less wealthy (e.g. in a low average income region) more than their marginal cost. Since YouTube is primarily going to be driven by marginal rather than fixed costs (it is very bandwidth and server heavy), and there is no reason to expect users in high-income locations cost YouTube more, it is a safe assumption that the gap between the regional prices is all extra profit.
Even if true, that’s not what this hoopla is about. It’s about someone from say … the US using a VPN to get Kenyan pricing. As another person said “The internet’s most beloved company, Steam, also bans people for abusing the store using VPNs.”
Regional pricing is the only reason people in these countries even stand a chance at access to the service (because ultimately their costs might be a bit lower in these countries but not by much … I would not be surprised if regional pricing is pretty much just above the break even mark). People in other countries abusing those slashed prices threatens the whole system.
would not be surprised if regional pricing is pretty much just above the break even mark
And in the efficient market, that’s how much the service would cost for everyone, because otherwise I could just go to a competitor of YouTube for less, and YouTube would have to lower their pricing to get customers, and so on until no one can lose their prices without losing money.
Unfortunately, efficient markets are just a neoliberal fantasy. In real life, there are network effects - YouTube has people uploading videos to it because it has the most viewers, and it has the most viewers because it has the most videos. It’s practically impossible for anyone to compete with them effectively because of this, and this is why they can put their prices in some regions up to get more profit. The proper solution is for regulators to step in and require things like data portability (e.g. requiring monopolists to publish videos they receive over open standards like ActivityPub), but regulatory capture makes that unlikely. In a just world, this would happen and their pricing would be close to the costs of running the platform.
So the people paying higher regional prices are paying money in a just world they shouldn’t have to pay, while those using VPNs to pay less are paying an amount closer to what it should be in a just world. That makes the VPN users people mitigating Google’s abuse, not abusers.
Yes, but for companies like Google, the vast majority of systems administration and SRE work is done over the Internet from wherever staff are, not by someone locally (excluding things like physical rack installation or pulling fibre, which is a minority of total effort). And generally the costs of bandwidth and installing hardware is higher in places with a smaller tech industry. For example, when Google on-sells their compute services through GCP (which are likely proportional to costs) they charge about 20% more for an n1-highcpu-2 instance in Mumbai than in Oregon, US.
Would you say its unfair to base pricing on any attribute of your customer/customer base? I haven’t seen much discussion around how to fairly set prices for any kind of service/good. Seems most people agree they should make a profit of some kind, and I’ve heard some rough rules suggested but it almost seems like the logical conclusion is that prioritizing profit is always bad for society.
Would you say its unfair to base pricing on any attribute of your customer/customer base?
A business being in a position to be able to implement differential pricing (at least beyond how they divide up their fixed costs) is a sign that something is unfair. The unfairness is not how they implement differential pricing, but that they can do it at all and still have customers.
YouTube can implement differential pricing because there is a power imbalance between them and consumers - if the consumers want access to a lot of content provided by people other than YouTube through YouTube, YouTube is in a position to say ‘take it or leave it’ about their prices, and consumers do not have another reasonable choice.
The reason they have this imbalance of market power and can implement differential pricing is because there are significant barriers to entry to compete with YouTube, preventing the emergence of a field of competitors. If anyone on the Internet could easily spin up a clone of YouTube, and charge lower prices for the equivalent service, competitors would pop up and undercut YouTube on pricing.
The biggest barrier is network effects - YouTube has the most users because they have the most content. They have the most content because people only upload it to them because they have the most users. So this becomes a cycle that helps YouTube and hinders competitors.
This is a classic case where regulators should step in. Imagine if large video providers were required to federated uploaded content on ActivityPub, and anyone could set up their own YouTube competitor with all the content. The price of the cheapest YouTube clones (which would have all the same content as YouTube) would quickly drop, and no one would have a reason to use YouTube.
You can pay to have less ad, but you’re still also paying with your data. Bet pretty soon it will be pay and have ads, or pay more again. They have a captive market. They can extract and extract.
I feel like the amount of ads and/or length is a little excess these days, though.
I do agree but their costs have also skyrocketed because the resolution and frame rate of videos has skyrocketed.
Linus Tech Tips did a video about this … which agree with his conclusions or not, he paints a clear picture about how YouTube is more expensive to run than it used to be https://youtu.be/MDsJJRNXjYI
Google also isn’t in the business of “running things at a loss in hopes of future profit” anymore … so they need YouTube to be profitable. Maybe it’s “too profitable”, maybe they could cut down on the amount of advertising they use … but you’re absolutely right that they do test this stuff and find the threshold between “annoying but profitable” and “annoying but we’re losing users.”
More competition is always good … but Google isn’t stopping competition from showing up, just like Valve isn’t stopping competition from showing up, they’re just providing a better service that creators keep coming back to (because it’s ultimately good for those same creators to get their content out there and monetize it).
My main concern is that they sometimes serve ads that redirect to porn, even if you aren’t signed in, and that’s not the type of ad I want to see, especially if I’m watching a video about cooking. By this alone I wouldn’t want to use YouTube, but as they practically have a monopoly on video streaming it’s not really viable to boycott them without giving up on user generated videos
This really is not a service issue. This is not a privacy issue.
YouTube as a service is … actually a great service, it pays creators well, it’s fast, it has decades of content, and it has tons of features.
It’s monetized with ads, you either watch those ads or you pay them. Using a VPN to get a lower price on the subscription is not a service issue, that’s abuse of regional pricing, and no company would accept that.
The internet’s most beloved company, Steam, also bans people for abusing the store using VPNs. So as much as I hate Google, i find nothing wrong with this.
More like regional pricing is an attempt to maximise value extraction from consumers to best exploit their near monopoly. The abuse is by Google, and savvy consumers are working around the abuse, and then getting hit by more abuse from Google.
Regional pricing is done as a way to create differential pricing - all businesses dream of extracting more money from wealthy customers, while still being able to make a profit on less wealthy ones rather than driving them away with high prices. They find various ways to differentiate between wealthy and less wealthy (for example, if you come from a country with a higher average income, if you are using a User-Agent or fingerprint as coming from an expensive phone, and so on), and charge the wealthy more.
However, you can be assured that they are charging the people they’ve identified as less wealthy (e.g. in a low average income region) more than their marginal cost. Since YouTube is primarily going to be driven by marginal rather than fixed costs (it is very bandwidth and server heavy), and there is no reason to expect users in high-income locations cost YouTube more, it is a safe assumption that the gap between the regional prices is all extra profit.
High profits are a result of lack of competition - in a competitive market, they wouldn’t exist.
So all this comes full circle to Google exploiting a non-competitive market.
And right there I’m done with your comment. Regional pricing is incredibly important, without it everyone pays the US or EU price and there is no service provided period.
Even if true, that’s not what this hoopla is about. It’s about someone from say … the US using a VPN to get Kenyan pricing. As another person said “The internet’s most beloved company, Steam, also bans people for abusing the store using VPNs.”
Regional pricing is the only reason people in these countries even stand a chance at access to the service (because ultimately their costs might be a bit lower in these countries but not by much … I would not be surprised if regional pricing is pretty much just above the break even mark). People in other countries abusing those slashed prices threatens the whole system.
This is people in “first world” countries trying to rig the system: https://www.reddit.com/r/youtube/comments/15hz5ys/found_country_that_works_to_get_youtube_premium/
Someone in Uzbekistan for instance would feel as the average US consumer would if a year of YouTube premium was $829.
deleted by creator
And in the efficient market, that’s how much the service would cost for everyone, because otherwise I could just go to a competitor of YouTube for less, and YouTube would have to lower their pricing to get customers, and so on until no one can lose their prices without losing money.
Unfortunately, efficient markets are just a neoliberal fantasy. In real life, there are network effects - YouTube has people uploading videos to it because it has the most viewers, and it has the most viewers because it has the most videos. It’s practically impossible for anyone to compete with them effectively because of this, and this is why they can put their prices in some regions up to get more profit. The proper solution is for regulators to step in and require things like data portability (e.g. requiring monopolists to publish videos they receive over open standards like ActivityPub), but regulatory capture makes that unlikely. In a just world, this would happen and their pricing would be close to the costs of running the platform.
So the people paying higher regional prices are paying money in a just world they shouldn’t have to pay, while those using VPNs to pay less are paying an amount closer to what it should be in a just world. That makes the VPN users people mitigating Google’s abuse, not abusers.
Why wouldn’t high income areas be more expensive to serve?
Don’t they have to have local servers all around the world to even allow this instant-like transfer of videos for anyone to watch at anytime?
I actually don’t know the back end stuff so you might be able to explain this part.
Yes, but for companies like Google, the vast majority of systems administration and SRE work is done over the Internet from wherever staff are, not by someone locally (excluding things like physical rack installation or pulling fibre, which is a minority of total effort). And generally the costs of bandwidth and installing hardware is higher in places with a smaller tech industry. For example, when Google on-sells their compute services through GCP (which are likely proportional to costs) they charge about 20% more for an n1-highcpu-2 instance in Mumbai than in Oregon, US.
Would you say its unfair to base pricing on any attribute of your customer/customer base? I haven’t seen much discussion around how to fairly set prices for any kind of service/good. Seems most people agree they should make a profit of some kind, and I’ve heard some rough rules suggested but it almost seems like the logical conclusion is that prioritizing profit is always bad for society.
A business being in a position to be able to implement differential pricing (at least beyond how they divide up their fixed costs) is a sign that something is unfair. The unfairness is not how they implement differential pricing, but that they can do it at all and still have customers.
YouTube can implement differential pricing because there is a power imbalance between them and consumers - if the consumers want access to a lot of content provided by people other than YouTube through YouTube, YouTube is in a position to say ‘take it or leave it’ about their prices, and consumers do not have another reasonable choice.
The reason they have this imbalance of market power and can implement differential pricing is because there are significant barriers to entry to compete with YouTube, preventing the emergence of a field of competitors. If anyone on the Internet could easily spin up a clone of YouTube, and charge lower prices for the equivalent service, competitors would pop up and undercut YouTube on pricing.
The biggest barrier is network effects - YouTube has the most users because they have the most content. They have the most content because people only upload it to them because they have the most users. So this becomes a cycle that helps YouTube and hinders competitors.
This is a classic case where regulators should step in. Imagine if large video providers were required to federated uploaded content on ActivityPub, and anyone could set up their own YouTube competitor with all the content. The price of the cheapest YouTube clones (which would have all the same content as YouTube) would quickly drop, and no one would have a reason to use YouTube.
You’re getting down voted, but you are mostly correct.
I feel like the amount of ads and/or length is a little excess these days, though.
The thing is, Google isn’t dumb. They’ve user tested this strategy and they know it results in higher revenue.
And the enshitification continues…for those that don’t pay
You can pay to have less ad, but you’re still also paying with your data. Bet pretty soon it will be pay and have ads, or pay more again. They have a captive market. They can extract and extract.
I do agree but their costs have also skyrocketed because the resolution and frame rate of videos has skyrocketed.
Linus Tech Tips did a video about this … which agree with his conclusions or not, he paints a clear picture about how YouTube is more expensive to run than it used to be https://youtu.be/MDsJJRNXjYI
Google also isn’t in the business of “running things at a loss in hopes of future profit” anymore … so they need YouTube to be profitable. Maybe it’s “too profitable”, maybe they could cut down on the amount of advertising they use … but you’re absolutely right that they do test this stuff and find the threshold between “annoying but profitable” and “annoying but we’re losing users.”
More competition is always good … but Google isn’t stopping competition from showing up, just like Valve isn’t stopping competition from showing up, they’re just providing a better service that creators keep coming back to (because it’s ultimately good for those same creators to get their content out there and monetize it).
Except for a company that understands going after these people won’t benefit them?
Literally read about regional pricing and how important it is. It’s incredibly ignorant to be against regional pricing.
The alternative to regional pricing is people just don’t have access at all.
My main concern is that they sometimes serve ads that redirect to porn, even if you aren’t signed in, and that’s not the type of ad I want to see, especially if I’m watching a video about cooking. By this alone I wouldn’t want to use YouTube, but as they practically have a monopoly on video streaming it’s not really viable to boycott them without giving up on user generated videos