
In Defense Of Free - yottoy
http://www.avc.com/a_vc/2012/07/in-defense-of-free.html
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bretpiatt
I don't understand the outrage over internet advertising if done properly.
People are very happy in general paying cable TV a monthly fee and then
receiving comnercials in addition, if not we wouldn't have nearly universal
first world subscription rates yet when Hulu or Youtube add commercials people
are up in arms... this is just noe example.

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malandrew
To decide whether advertising is being done properly, I think we need to have
an honest, most likely philosophical, discussion about the purpose of
advertising. I'd say that advertising is at the very core adversarial in most
but not all instances.

Advertising (and other "distribution hacks") are essentially externalities
(visual and audible pollution and user-friendly utility trade-offs). They have
nothing to do with the product being sold and utility of a product and the
only way advertising helps consumers is to help a product reach enough scale
that prices drop. Besides that benefit, advertising is mainly for the benefit
of the company selling the good at the cost of the consumer. There are a lot
of products in the market that meet many needs. In the absence of all
advertising, i.e. in a consumer-driven, not producer-driven model, the
opportunity would lie with consumers paying money for people to tell them what
products provide the most value and an honest assessment of one product versus
others. It's the Consumer Reports model.

The Consumer Reports model, absent "payola", provides the greatest utility
because it most benefits those that offer the best products and services and
not those who are just better at making those product and services known.
IMHO, in an ideal world every single producer would compete _strictly_ on
value, which lies at the intersection of price and quality (i.e. "fitness for
use").

Advertising at it's core is often about adding the perception of value instead
of actual value.

