undefined | Better HN

0 pointslearc834y ago0 comments

The problem is that once you segment your customers into paying and non paying. The non paying customers become much less valuable to advertisers and the paying customers become much more valuable.

So the service needs to charge even more, which makes paying customers even more valuable in a feedback loop. The usual result is that eventually the service can’t help themselves and starts showing paying customers “a few” ads. Then the definition of a few gets larger and larger.

0 comments

asxd4y ago

> The non paying customers become much less valuable to advertisers

I can see this being true, but I'm curious why. Is this because the advertisers know the paying customers have the cash to pay for the service?

Nextgrid4y ago

Outside of a very few markets that prey on desperate people's last dollars (payday loans, etc), most advertising's objective is to get people to buy something - advertising to those who can't afford it is useless.

matheusmoreira4y ago

Advertisers want the attention of people with disposable income. If someone's paying for something as superfluous as a streaming service, then they must have more than enough money to spend on whatever they want to sell.

The more you pay in general, the more they want you to pay them specifically.

j / k navigate · click thread line to collapse