If you try to build a network of paid users, you lose because you'll be run over by 'free' competitors monetizing indirectly.
HBO used this model way back when. It’s been a lasting business.
Yeah, the ad supported model has its problems, but it also makes the internet way more accessible. If we think about it, companies and people with more money are basically subsidizing these services for everyone else. They're the ones seeing the ads that keeps the lights on for users who can't afford to pay.
If everything was subscription only, a ton of people like students, low income families, people in developing countries would be shut out. "Free" services, even with their flaws, create a kind of digital subsidy. It's not perfect, but it means way more people can use these tools.
There's no reason why a subscription model could not also be used to subsidize people who can not pay, other than that companies are structured to extract as much as possible (by law, if they are public).
There are good network effect arguments about why this strategy can be effective, not simply 'altruistic.'
Ads simply make the extraction happen across the board, except that the ad model somewhat privileges technical users who know how to circumvent ads.
This is not true and it’s not what fiduciary duty means. Stop repeating it, it’s really dumb.
Companies very frequently do not monetize things that they could under the guise of “building brand recognition” or “establishing a user base”. It’s even as easy as “raising the price will alienate customers we think are important to long term revenue”.
It’s trivial to justify not extracting maximum price and public companies do it all of the time.
Look at Costco’s business model if you want an example
Or would the idea be to only subsidize students and not poor adults?
It would be one thing if we had like a national "verify I'm on SNAP or equivalent API"
Not every product category is amenable to such business models but many are.
[1] To be fair, Discord likely sells user data to advertisers to make additional money.
Imagine a utopian world where you just pay per site visit, and in return all companies selling stuff don't have an inflated advertising budget and free market effects force them to pass the savings on to you, meaning the net cost increase for you is zero. And as a side-effect, quality products float to the top, since you hear of them mostly by word-of-mouth, meaning products compete on value-per-dollar.
Sadly human psychology and economics does not work that way haha. We pay what the market will bear, and increasing sales via a torrent of ads is cheaper than increasing the value-per-dollar ratio of the product.
The problem (other than the obvious privacy and noise issues) is that it's not a neutral subsidy. It introduces a lot of biases.
Since advertisers are subsidizing the platform, they tilt the content toward things they want and away from messages they don't. Messages that criticize advertisers products (which include things like governments and political ideologies since they are advertisers) are de-emphasized and marginalized.
Since impressions / clicks / eyeballs are the goal, an inherent bias is introduced toward emotionally triggering and/or addictive or hypnotic content. The reason social media for example is so divisive and negative is that this keeps people engaged by triggering simple powerful emotions.
