The idea is that these social media sites always become monopolies. That occurs because no one can communicate with each other across platforms, which eventually leads to a majority of users migrating to a single platform over time. Once that happens, the social media group no longer has to try and the media site enshittifies slowly over time. On top of this, the insane amount of users also cripples the centralized system’s ability to self-moderate properly, leading to user-based enshittification as well.

With federated social media, that barrier doesn’t exist, and, in theory, the subsequent conglomeration of users doesn’t happen. Additionally, federated instances can be self-hosted and sport much smaller userbases which can make self-moderation much simpler.

The joke in the video is that rather than switching to federated social media like mastodon and lemmy, twitter users chose to go to yet another centralized social media site (which while having a federation protocol, is unlikely to have users utilizing that defederation). Essentially, Billy is abandoning twitter to go to another site which will potentially have the same downward trend as twitter did before.