The problem with federated alternatives to centralized services (and also one of the main problems *with* centralized services which lead people to look for an alternative) is Discovery.
Etsy and Twitch and YouTube provide an audience, supposedly. With the right pitch (and the right advertising dollars) you can get your own slice of that audience. (For as long as the algorithm graces you, and as long as you're willing to stomach the other things your viewers will be algorithmically suggested.)
I'm reminded of this story about digg. https://mastodon.social/@danluu/110499275521277590
And a similar story which I can't currently find about etsy.
The reason people flock to centralized services is to have an easier time finding the the thing that they want.
They often don't even have the chance to bounce off of indie services, but rather never find them to begin with. When they do find them, the discovery problem creates a high bounce rate.
This is why things like peertube struggle. Creators think their audience isn't there. Audiences can't find creators. No one makes any money.
On the flip side, youtube and facebook are built to maximize engagement, which means maximizing outrage in most cases, which turns them in to machines for turning people in to reactionaries.
Independent creators on YouTube or Etsy live or die on the whims of a faceless and unaccountable algorithm.
Independent creators on Independent platforms live or die on their ability to carve off an audience from centralized platforms.
In the meantime, bigots and sweatshop dropshippers rise to the top.
I've been working on an article about this for #ImpracticalComputing ( https://impractical.computer ) and ... I can't figure out how to end it.
I don't have a suggestion. I don't have a solution. Connecting people with the things they want to find is not a problem that scales.
The solution is human curation. Word of mouth.
But then how do the people doing the curation find the things? (At digg, it meant working 18 hour days.)
I don't think there is an answer to this question. I think scale is a trap.
I think that the fediverse, a bunch of small neighborhoods through which things bubble around and eventually reach escape velocity, is the closest to a real solution we're likely to find in the real world.
(Hell, I wrote about hyperlocal BBS systems as a potential solution for content discovery 8ish years ago, and then ended up on the fediverse and updated the article to indicate that it was working.)
Here is the piece I wrote in 2016 about this problem https://ajroach42.com/how-to-fix-new-content-discovery/
I don't agree with everything I said there, but human scale networks have certainly helped the problem!
The issue at hand today is how to facilitate those connections, strengthen them, and make sure that everyone in the chain is being treated fairly.
Human curration is what makes bookstores and record stores work.
Staff picks move books, even at a big chain. Reviews move books on Amazon, and get people to theaters.
But what incentive is there for people to undertake the act of intentional curration?
Film reviewers get paid to publish in magazines, but most magazines aren't turning a profit anymore.
No one gets paid for Amazon reviews. Rarely does anyone make money on their zine or their blog.
How can we support the people who help us find things?