The vast majority of users are far more ok with being shown ads than paying the equivalent of the cost of the ad to have it go away.
What if the ad were not in the picture at all, and you had low friction micropayments? There are YouTube channels which eschew advertisements and get most of their money from Patreon instead. There are other channels that have been demonetized against their will and have gone this route as well. It's workable, and yet, Patreon is far from the lowest friction it could achieve.
If there was some party able to make micropayments work, and able to make them not ever work, it would be Google.
> What if the ad were not in the picture at all, and you had low friction micropayments?
Again, people don't want to pay for content. Between one website asking you to pay $0.10 to view an article, and another offering it for free but showing ads, people will pick the free one.
> I could absolutely image people being willing to pay 1 one thousandth of a cent to read an article.
Oh, no, way more than that. Take a look at CPMs and ad costs. If your claim was true, and an article had 5 ads, every impression would cost 1/20,000 of a cent, and the CPM would be 5 cents.
Actual CPMs are a few dollars per thousand impressions, up to 10+ in developed markets. Which means that in the US, and article with, say, 5 ads would probably require you to pay 5 cents to view that article.
Take a look at the articles of ad-paid publications: you're more likely to see 10+ ads per page.
I don't think this analysis is valid. There are far more viewer entities than there are advertisers. In the current market, one party is trying to sell eyeballs to advertisers through a middleman. In a micropayment content market, it would be creators selling directly to audience. I think you're making the same kind of mistake when early computer pioneers thought there would be no more than hundreds of computers and no one would ever want one in their home. I both cases, the conceit is that both markets are the same, when in reality, the two markets are entirely different.
I'm sure you could have used the same conceit with cable TV to prove that something like YouTube would never work.
> In a micropayment content market, it would be creators selling directly to audience.
It doesn't matter, you'd still need to generate the same level of revenue than the ad-supported business, or even more, to justify the switch.
If you didn't, content creators would just stay in the ad-supported business.
> I'm sure you could have used the same conceit with cable TV to prove that something like YouTube would never work.
That doesn't apply here. We're talking about providing the same content with a different monetization strategy. YT wasn't about the monetization strategy, but about a different type of content.
Which I always found insane... something like 90% of revenue comes in 1-2 ads. Throwing more up on a page decreases the experience far more imho than eaking out a few more cents.
Not quite the same thing. It's one thing to be extorted by ads in order to pay. There's a lot of content for which advertisement doesn't work, so there's no extortion to shut off ads. Google doesn't want to facilitate that content for some reason. It wants to squash it.
You're not getting to the real problem: if a user can see an article with ads for free, or pay 10 cents, that user will most likely opt for the free version.
if a user can see an article with ads for free, or pay 10 cents, that user will most likely opt for the free version.
There is quite a bit of content for which ads don't work, for which people are only too happy to pay. Reduce the friction for that, and the market would increase.
YouTube just slaughtered a bunch of WeedTube channels. Then, there's also GunTube. That content definitely has an audience. That audience definitely is willing to pay! Why isn't someone making something with less friction than Patreon?
Sure, 1 user. Maybe even a million users. Well, the solution for that exists: subscriptions.
But nobody will build a system for such a small number of users.
> That content definitely has an audience. That audience definitely is willing to pay!
Sure, niche markets always exist. HBO makes money out of subscriptions, The NYT too. If you can find a niche audience that's willing to pay for your content, that makes it a viable business model for you.
But that doesn't scale across the billions of users on the internet. Particularly when you include the 1.5 billion who are not in rich countries.
Well, the solution for that exists: subscriptions.
I think it's still a bit too high in friction. I think there's yet another model possible.
Sure, niche markets always exist. HBO makes money out of subscriptions, The NYT too. If you can find a niche audience that's willing to pay for your content, that makes it a viable business model for you.
A lot of those niches aren't advertiser friendly. Subscription kind of works already. There must be something with lower friction yet.
But that doesn't scale across the billions of users on the internet. Particularly when you include the 1.5 billion who are not in rich countries.
I don't see why micropayments couldn't work on adjusted scales. We already have different prices for things depending on the market. Also, it's a problem that somewhat fixes itself, automatically. A website relevant to low-income rural people outside the 1st world won't be able to charge as much as a 1st world website, but it might well be able to charge enough to greatly benefit the operator anyways.
It's hard to charge money for entertainment, because there's so much of it for free. The exception is content that is expensive, unique, and hard - something like a great book or a TV series, or a bundle of those.
But for content with deep value for the user - helping him advance his life(improving skills,health,finance ), and that is hard to copy, users do pay - for example for books, courses, bundles of articles, access to some communities.
But why aren't we seeing micro-payments for deep value content, at the article level ? Because legally "copying" a single article offers no barrier to competition.
But maybe articles of deep value with a lot of valuable graphical content, will both raise the barrier to competition high-enough, and bring enough value to the user, that he will be willing to pay enough.
What if the ad were not in the picture at all, and you had low friction micropayments? There are YouTube channels which eschew advertisements and get most of their money from Patreon instead. There are other channels that have been demonetized against their will and have gone this route as well. It's workable, and yet, Patreon is far from the lowest friction it could achieve.
If there was some party able to make micropayments work, and able to make them not ever work, it would be Google.