Just look back 50 years, how many ads an average
Western person saw a day and how many today...
50 years ago the average western person had access to maybe 1/50th of the information they access to now thanks to the internet and in large part thanks to advertising. Advertising allows businesses to outsource the consideration (and associated decisions) of the value of their users. A business dependent on advertising doesn't need to consider which of their users are most dollar valuable, a business dependent on advertising can focus on creating a product that reaches the most people and that in turn will provide their growing revenues. Advertising provides a subsidy that supports the people who can't afford $20/month to use each website they care about.
Advertising is an equaliser and the experiences of those half a century ago are a meaningless comparison.
create high-quality products that consumers can
tell their friends about
My company provides a product that our users love, tens of millions of loyal users use our products every month, they tell their friends about our products, they send us emails saying how much they appreciate our products... but most of our users aren't in a position to pay $15/month for our products so we use advertising. Yes, we could cut advertising tomorrow and remain profitable if we charged $15/month for access, but we'd cut off 95% of our users access to products they care about because they can't justify $15/month to access it.
It's interesting that you bring up fairness. Your customers presumably know exactly what they're getting when they use your product. But do they know exactly who ends up with their browsing information, exactly how long those parties will have access to it, and exactly what the terms of use are for it? In other words, do they know exactly what they're paying?
Edit: fwiw, I don't mean this rhetorically or combatively. I'm genuinely curious about what someone in your position thinks about the asymmetry of the exchange.
What is not fair is how the weak and vulnerable in society subsidize everyone else. Online advertisement is riddled with malware and ads from companies that is evading advertisement law by spending money on the online versions rather than the more regulated offline versions.
Since we are talking about fairness, how is it that publisher takes no responsibility when their website is used to distributing malware? Where is the responsibility when the advertisement on the website pry on the elderly, stealing their personal information to sell to call centers that target elderly people with fraudulent subscriptions and other schemes?
My ad blocking stays on until the advertisement market start to behave online as they have to in the offline world. That never happened for email, and my spam filter is always on as a result, and I doubt it will happen for the web.
You make it sound like your users are getting a free service. They are not. They just do not pay you directly.
Why are advertisers willing to pay you $15/month per user? Because those users buy the advertisers' wares with a hefty "advertisement-tax" on top of the "real" price.
You're misunderstanding the example. Advertisers do not pay $15 per user, that's the amount we would need from 5% of our users to replace the revenue lost from no advertising. The example puts the value of each user per month at $1, which is what advertisers pay.
It would be far better for content creators to create valuable content and charge for it than to rely on the dubious ethics of most advertisers.
For a time, I paid for a SMH online subscription, but then I discovered that a. Half my comments were still not reviewed or even published, with no explanation. I was STILL tracked by up to 60 ad trackers every time I went to their website. And the content of the Herald started to degrade more and more (no, I don't care about Kim Kardashian, and I never will. And it's not acceptable to have sentences that drop whole words, often in ways that make that sentence unreadable). So I stopped reading and paying for the content.
Now if I could find a decent newspaper I could pay a reasonable subscription fee to, then I'd do so. To hell with advertising. If your business model is reliant on it to survive, then wither on the vine and die for all I care.
Not that I agree with them, but their point seemed to be that their service is accesible to all, independently of their wealth. That close, but not the same as free.
There would be nothing unfair about choosing to acknowledge and restrict your product to the actual market size for it - the paying audience of 5%. Currently, it seems the company acknowledges its current market demand is small and is using ad revenue from the non-paying 95% to supplement income.
A lot of online product falls under entertainment/content and most users will not pay for non-essential services; they'd simply find alternatives. Even those willing to pay something want to pay one fee at most and with so many content sources, competition to be the chosen paid source is exceedingly stiff.
Is $15/month a real number? That sounds high to me for what you would get from advertising.
For instance, if you have a CPM of $15/thousand-ad-views, then to get $15/month, your users would have to view 1000 ads a month, or 30 per day. Is that right?
[EDIT] Alternatively, assuming a CPC of $0.05/click (which I gather is pretty typical, though this varies a lot), each of your users would have to click on 300 ads a month.
The example $15/month figure is what we would need in the example to reach revenue parity if 5% of the users paid for the service and 95% did not use the service any more (no advertising revenue). A more accurate figure of each users monthly value would be $1 per user.
If they're not in a position to spend $15 a month for your products, then how are the ads bringing in money in the first place. One would assume that in order for the company purchasing the ad to want to pay for it, people seeing the ad have to be spending money on their product... which sort of implies dispensible income.
You say a business now doesn't have to consider who is most dollar valuable if they rely on advertising. Maybe. But advertisers sure still do - and advertisers are then your customer and so you basically choose who is most dollar callable to the advertiser. I think the distinction is so slim that it's irrelevant.
Advertising is an equaliser and the experiences of those half a century ago are a meaningless comparison.
My company provides a product that our users love, tens of millions of loyal users use our products every month, they tell their friends about our products, they send us emails saying how much they appreciate our products... but most of our users aren't in a position to pay $15/month for our products so we use advertising. Yes, we could cut advertising tomorrow and remain profitable if we charged $15/month for access, but we'd cut off 95% of our users access to products they care about because they can't justify $15/month to access it.That's not fair.