My guess is it's more that advertisers want paying customers the most, so they pay extra or otherwise pressure services to include ads into paid services.
I appreciate the option to pay more to go ad free. Though I also understand offering with ads to widen the audience at a free or lower price.
This is simply not true in my experience. Most prominent example is Youtube, where there is an option for an ad-free experience which is decently priced. And yet, the adoption is very low and you still see people complaining about ads on Youtube all the time.
I guess a vast majority of people simply don't want to pay if there is a somewhat acceptable free alternative.
I worry that this is one of those market sectors where the price customers are willing to pay to use a service is dwarfed by the price advertisers are willing to pay for access to the users --- and so the ad-supported version is (a) free, (b) more attractive to users, and (c) more lucrative.
In a network-effect dominated business, this doesn't seem like a recipe for success.
We don't, but a model where a user pays for a service rather than being free and ad supported is significantly less likely to enact user unfriendly changes.
If the way you make money is by convincing people to pay, you are highly incentivised to make the product good, especially where there are many other free competitors who are ad supported.
Worse, free ad-supported tiers seem like they may be more profitable for them, so there's incentive to raise prices more to see if that can push more people to their free tiers.
OK, my experience is much different. I would far far rather provide a free ad supported service than charge.
If you give it away free as ad supported, users tend to be extremely grateful. Once they start paying, even a tiny amount, they start to be more resentful and demand far more.
Some people have more time than money, other people have more money than time. If they make it take more time to have a free ad free experience it tips the scales towards subscription.
Probably because it's easier to quickly grow a free product/platform and then add monetization on top, than have users pay for access or endure a worse ad-cramped experience.
A willingness to pay signals that you A. have money and B. care about quality, which makes you a ripe target for price discrimination, which is why "ad-free" premiums often exceed the ad revenue by an enormous factor.
I disagree. The reasons are more straightforward. If there's a choice between a paid website, and a free website, the free one will win out. And advertising means you can offer users something for 'free'.
So lets say google switched to charging users for access to their search engine, a competitor would just popup that was 'free', and everyone would use that instead.
Users who don’t want ads aren’t exactly the same as users who are willing to pay. Prime example — myself. What I’m getting at, companies have calculated that in most of scenarios having paid model isn’t worth it. There will always be exceptions for services that people use a lot — Spotify, Netflix, Youtube and etc. For websites where you go on for a few minutes, people aren’t willing to pay up.
Generally, these services are free because they have a low market value. Most users would not be willing to pay for them. So, they have to finance themselves by other means like ad income.
They will always add advertising to paid services. Not doing so is leaving money on the table. Eventually some executive is gonna realize that and do it. Actually paying for stuff just makes us even more valuable to them.
I agree advertising certainly has a place and tradeoffs. It's seems more like a cost shifting, less direct, obfuscated payment terms model than 'free'. Certainly people being advertised to are paying for it because the ads are successful, just not a direct exchange of money for content/service but instead a payment of time/attention for psychological manipulation/impression which will result in a direct payment sometime in the future(if the advertising party is successful)
I mean that was how it worked at the beginning and what the big companies all lavished. "It's all FREE!" They spent a couple decades hammering that home. And then they said "sike, pay us and we won't serve you ads but also we'll keep increasing the price and serve ads anyway lol", but the end user has a "misplaced guise". Hmmmkay then.
I appreciate the option to pay more to go ad free. Though I also understand offering with ads to widen the audience at a free or lower price.
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