> The users paying $20 or $200/month for premium tiers of ChatGPT are precisely the ones you don't want to exclude from generating ad revenue.
but they're already paying you. While I appreciate the greed can be there, surely they'd be shooting themselves in the foot. There's many people who would pay who find advertising toxic and they have such huge volumes at free level that they'd be able to make a lot off a low impression cost.
Even in the days of print publications, the publisher would seek revenues from advertisers, subscribers, and they would sell their subscriber data. (On top of that, many would have contests and special offers which probed for deeper data about the readership.) In some sense, the subscriber data was more shallow. In other senses, it was more valuable.
I get what you're saying about shooting themselves in the foot, and I'm sure there will be options for corporate clients that will treat the data collected confidentially while not displaying advertising. I also doubt that option will be available (in any official sense) to individuals much as it isn't available (in any official sense) to users of Windows. For the most part, people won't care. Those who would care are those who are sensitive enough about their privacy that they wouldn't use these services in the first place, or are wealthy enough to be sensitive about their privacy that they would could pay for services that would make real guarantees.
The stats I see for Facebook are $70 per US/Canadian user in ad revenue. I'm not sure how much people would be willing to pay for an ad free Facebook, but it must be below $70 on average. And as the parent comment said, the users who would pay that are likely worth much more than the average user to the advertisers.
For the users who refuse to see ads, they'd either use a different platform or run an ad blocker (especially using the website vs the app).
Good point, I'm not sure. I'd be interested if anyone knew a good estimate for how much of their operating expenses the ad-tech side took.
Presumably Facebook would abandon ads if there was more money to be made in paid subscription, so I'll use corporate greed as evidence that the math doesn't work out. But I don't personally know.
Most Zoomers around me that pirate use some application that obfuscates the torrenting part away, they just have to know how to use a search box and hit play.
The moat is the leverage to get licensing deals using the size of the existing user base.
You could bootstrap a movie rental business by buying DVDs from a DVD store (then eventually from a DVD distributor, etc.). You cannot bootstrap a movie streaming business by buying streaming rights because nobody will sell them to you. They hardly even sell them to Netflix anymore.
The Internet Archive tried to get around the same issue for ebooks by scanning physical books and renting the scans (and not being a business), and it nearly cost them everything.
basic people sure, but the early internet showed an extremely strong demand for a better service than cable TV. When that demand is there then people will start seeking other options and building bridges of convenience to help the basic people also port over.
that's extreme motivation for someone to build a new competitor. Deepseek demonstrated that there's innovation out there to be had at a fraction of the effort.
Paying users aren't necessarily profitable users though. It's harder to pin down with OpenAI, but I see no end of Claude users talking about how they're consistently burning the equivalent of >$1000 in API credits every month on the $200 subscription.
(not that ads alone would make up an $800 deficit, they'll probably have to enshittify on multiple fronts)
wouldn't you charge those people more before you start serving ads? Also wont a lot of those sorts of users be running ad block anyway? I'm mildly sus that this is the right way to go.
I’m not sure where you’re getting this notion that a paid service introducing ads is a bad business model. It’s been proven time and time again that it’s not. Spotify, Netflix, Prime Video, Hulu, the list goes on, all introduced ads and none of them saw any real backlash. Netflix cracked down on password-sharing and introduced ads in the same year and lived to tell the tale. Unfortunately people just really don’t realize how harmful ads are.
but they're already paying you. While I appreciate the greed can be there, surely they'd be shooting themselves in the foot. There's many people who would pay who find advertising toxic and they have such huge volumes at free level that they'd be able to make a lot off a low impression cost.